Bear market rally?
March 17th, 2009 by Bryden Elssmann
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 7216.97 | -7.01 | -0.1% |
| NASDAQ | 1404.02 | -27.48 | -1.9% |
| S P 500 | 753.89 | -2.66 | -0.4% |
| FTSE 100 | 3863.99 | 110.31 | 2.9% |
| Nikkei 225 | 7704.15 | 134.87 | 1.8% |
| SPI Futures | 3382 | 12 | 0.4% |
| All Ords | 3,297.00 | 2.6 | 0.1% |
| Oil | 47.33 | 1.11 | 2.4% |
| Gold | 922 | -8.1 | -0.9% |
| Silver | 12.905 | -0.325 | -2.5% |
| Aluminium | 1335 | 32 | 2.5% |
| Copper | 3671 | 177 | 5.1% |
| Lead | 1266.5 | 36 | 2.9% |
| Nickel | 9535 | -5 | -0.1% |
| Tin | 10800 | -200 | -1.8% |
| Zinc | 1216.5 | 29 | 2.4% |
Wall Street finished lower on Monday, as technical selling ended the 4 session winning streak. The Dow Jones lost 7 points, or 0.1 per cent 7216.97. We are seeing optimism return in the market and a slow shift out of cash into equities. The improvement in sentiment is continuing each day the market goes up. Therefore, in the short term, the rally could continue if investors believe the economy is improving. However, plenty of uncertainty remains. Industrial production data showed US factories are at their lowest rate of usage since records began in 1967. While General Motors also warned that US sales for March may be weaker than the first two months of the year. Investors are continuing to proceed with caution, waiting to see that it’s not just a bear market rally before they commit more cash.
“A relief rally cannot continue until investors have greater faith that the problems in the economy have been worked out,” William Dwyer, MTB Investment Advisor.
The Australian Market ended a mixed session positively as gains in the financial sector offset falls in the mining sector. The ASX200 closed 0.1 per cent higher, up 3.2 points to 3348.4. In the banking sector the Big Four all finished higher with ANZ leading the rally up nearly 3 per cent. In contrast, Rio Tinto fell 2.83 per cent after concerns were raised over Chinalco’s investment in the miner. BHP also closed down 2.08 per cent.
RIO
RIO is facing strong opposition from shareholders to its proposed $US19.5 billion deal with Chinalco. Australian Foundation Investment Co (AFI) expressed concerns that the proposed deal would give Chinalco a significant influence in the running of Rio Tinto. Chinalco is backed by a sovereign government that is both a customer and competitor of Rio Tinto and any deal would require due consideration by the Australian Government. Rio Tinto is banking on the Chinalco deal to ease its $US38.7 billion debt burden.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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