Bounce on the Banks

November 19th, 2008  by Lawrence Grasso

Closing Data

	current	change	%
Dow Jones	8424.75	151.17	1.8%
NASDAQ	1483.27	1.22	0.1%
S P 500	859.12	8.37	1.0%
FTSE 100	4208.55	76.39	1.8%
Nikkei 225	8328.41	-194.17	-2.3%
SPI Futures	3568	17	0.5%
All Ords	3,513.00	-126.4	-3.5%
Oil	54.42	-0.72	-1.3%
Gold	732.7	-9.3	-1.3%
Silver	9.55	0.22	2.4%
Aluminium	1820.5	-67.5	-3.6%
Copper	3580.5	-141.5	-3.8%
Lead	1258	-91	-6.7%
Nickel	10450	-650	-5.9%
Tin	13900	-470	-3.3%
Zinc	1120.5	-78.5	-6.5%

U.S. stocks rose on Tuesday as Hewlett-Packard's upbeat results trumped growing fears of a deepening global recession in a day of volatile trade, but much of Wall Street finished lower and oil prices fell. The U.S. dollar rose against most major currencies as investors exited trades in higher-yielding assets and currencies in favour of relative safety of the greenback. Bond prices rose on both sides of the Atlantic, lifted by the latest evidence in the United States and Britain that inflation pressures are waning due to plunging energy prices. Investors expect central banks to cut interest rates further to revive economic growth. Wall Street traded much of the day lower but surged in a late rally, spurred by the forecast-beating results and outlook from HP,  the world's largest maker of personal computers.

The Dow Jones industrial average closed up 151.17 points, or 1.83 percent, at 8,424.75.

On a local front the Australian Market should open stronger today, with a focus on the financial sector. Look for a 40-50 point open.  

Oil

Crude oil fell to the lowest in almost 22 months on forecasts that a report will show U.S. oil supplies increased for an eighth week as a recession erodes global demand. Major oil companies are sitting on enormous piles of cash after posting record profits in recent quarters, while crumbling stock and crude prices have made many smaller oil and gas companies potential targets. The disparity in the energy sector comes as Exxon Mobil Corp., BP PLC and other oil giants find it increasingly difficult to secure new sources of fossil fuels the old-fashioned way -- exploring and drilling for them. Smaller producers that don't have the same massive capital reserves have been stung by a credit crisis that's severely limited or even paralysed their ability to finance new exploration and production.

Gold

Gold fell for the second straight day on speculation that the slumping global economy will reduce demand for commodities, eroding the appeal of the precious metal as a hedge against inflation

Macquarie Bank Limited (MGQ)

Australia's biggest merchant bank, posted a smaller-than-expected drop in profit and said earnings may withstand the credit crunch, sending the shares to their biggest gain in two months. Chief Executive Officer Nicholas Moore forecast second-half profit ``broadly in line with the first-half,'' reassuring investors after Macquarie's stock dropped to a six-year low yesterday.

Babcock & Brown Infrastructure Group (BBI)

BBI has put a stake in the Dalrymple Bay coal-export port in Australia up for sale to repay debt and raise funds for expansion. The company is seeking to sell 30-49 percent of the A$2.3 billion ($1.5 billion) port in Queensland. It is understood to have issued confidentiality agreements to potential bidders after a group of mining companies made an approach to buy the port.

Banks 

We have seen in the last couple of days a heavy sell off on the financial sector.  Look for a bounce in the banks today that will lead into the weekend. My picks  CBA,ANZ for a 10% bounce “AT LEAST”.

Quote of the Day: “Do not hire a man who does your work for money, but him who does it for the love of it”

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

< Return to Market Fox home