Consolidation Ahead
June 17th, 2009 by Lawrence Grasso
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8504.67 | -107.46 | -1.2% |
| NASDAQ | 1796.18 | -20.2 | -1.1% |
| S P 500 | 911.97 | -11.75 | -1.3% |
| FTSE 100 | 4328.57 | 2.56 | 0.1% |
| Nikkei 225 | 9752.88 | -286.79 | -2.9% |
| US Bond 10 Yr | 3.6578 | -0.0545 | -1.5% |
| US Bond 30 Yr | 4.4747 | -0.0859 | -1.9% |
| COMEX Gold - Aug 09 | 932.2 | 4.7 | 0.5% |
| COMEX Silver - Jul 09 | 14.13 | 0.1 | 0.7% |
| COMEX Copper - Jul 09 | 225.55 | -2.95 | -1.3% |
| WTI Spot | 70.47 | -0.08 | -0.1% |
The Dow Jones Industrial Average fell 107.46 points, or 1.25%, to 8504.67. U.S. stocks fell for the second straight session as investors tempered their hopes for an economic recovery and sold consumer stocks such as Best Buy. The world’s biggest electronics retailer plunged 7.3 percent after profit slumped 15 percent.
The Australian market will see further consolidation today on the back of falling commodity prices and overnight market uncertainty in the U.S. Look for the XJO to find support today back at around 3900.
BHP
BHP Billiton will be sold off again today and should find support around $35.50.
For those clients that have been waiting to pounce on the big miner again, we recommend to start adding BHP back into your portfolio around $34-$34.50 level over the coming week.
RIO
Today Rio Tinto has gone EX rights and looks like it will open at around the $60 mark. The rights issue was done at $28.29 and gives the stock a fair value of $57.75. With the market heading south today we could potentially see the stock fall below fair value price.
AIO
Asicano Group has upsized the underwritten component of its capital raising by $350 million to $2.35 billion in response to strong demand from institutions. In a statement, the company said a total of $1.92 billion has been committed by institutional investors. The $428 million retail component of the group's entitlement offer is also fully underwritten. Asciano may raise up to A$194 million more through the non-underwritten conditional placement to its Chief Executive Mark Rowsthorn. Mark Rowsthorn's current intention is to fully participate in the offer subject to securing the required level of funding and required security holder approval being obtained.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
Disclaimer
The material in “Market Fox” (newsletter) is of a general nature only and neither purports nor is intended to be regarded as advice. No consideration has been given or will be given to your investment objectives, financial situation or needs. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk. Not all risks can be or will be explained in the newsletter. Previous results are no indication of future results. Actual results achieved in the market can vary considerably. The Directors and Representatives of Freeman Fox Ltd and their associates may hold securities in the companies presented.
The research made available in this newsletter is for your private use only and it is protected by applicable copyright laws and other applicable intellectual property right laws. You may not reproduce, distribute, disseminate, broadcast, sell, publish, circulate or give for free, any of the materials made available to you in this newsletter without first seeking the prior written consent of Freeman Fox Ltd.
Freeman Fox Ltd is not required to update any of the content made available in this newsletter, including but not limited to any research commentary, forecasts, recommendations or other analysis in this newsletter. Therefore, for the avoidance of any doubt, material made available in this newsletter may not be accurate after the date of publication or the date on which it is displayed in the newsletter.
To the extent permitted by law, Freeman Fox Ltd and their respective directors, officers, employees, contractors and agents disclaim all responsibility to you for any loss, liability, claim, expense (including but not limited to legal costs and resultant defence or settlement costs) or damage whatsoever, whether direct, consequential, special, incidental, punitive or indirect (including but not limited to loss of profits, trading losses and damages that result from delay, loss or inconvenience) arising out of or in connection with the content of the newsletter and/or any omissions from the content whether in contract, tort (including negligence), statute or otherwise and even if Freeman Fox Ltd has been advised of the possibility of such damage or loss.
If you require assistance in relation to your personal investment situation, contact an authorised representative of Freeman Fox Ltd.