David vs. Goliath
April 14th, 2009 by Bryden Elssmann
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8057.81 | -25.57 | -0.3% |
| NASDAQ | 1653.31 | 0.77 | 0.0% |
| S P 500 | 858.73 | 2.17 | 0.3% |
| FTSE 100 | 3983.71 | 58.19 | 1.5% |
| Nikkei 225 | 8924.43 | -39.68 | -0.4% |
| SPI Futures | 3760 | 38 | 1.0% |
| All Ords | 3,618.00 | 50 | 1.4% |
| Oil | 50.22 | -2.02 | -3.9% |
| Gold | 895.8 | 12.5 | 1.4% |
| Silver | 12.768 | 0.438 | 3.6% |
| Aluminium | 1451 | 0 | 0.0% |
| Copper | 4465 | 0 | 0.0% |
| Lead | 1352.5 | 0 | 0.0% |
| Nickel | 10755 | 0 | 0.0% |
| Tin | 11055 | 0 | 0.0% |
| Zinc | 1352 | 0 | 0.0% |
The Australian market is likely to open higher this morning following a strong lead from US markets leading into the Easter Holiday. On Thursday the Dow gained 246.27 points, or 3.1 percent to 8083.38 while the S&P 500 closed up 31.40, or 3.8 percent to 856.56. As the US market opened after the long weekend profit taking dragged Wall Street lower. The Dow lost 26 points to close at 8056.62. Goldman Sachs kicked-off 1st quarter corporate earnings announcing a profit of $US1.8 billion. The company also set plans to raise $US 5 billion through the sale of stock, declaring it will become the first ‘big bank’ to repay federal TARP loans. The six largest US banks are set to report their latest quarterly figures over the next two weeks. Citigroup, JP Morgan and Bank of America have all announced that they made a profit in 2009. Financial companies which have been the hardest hit by the economic downturn and credit crisis, have helped lead a rally over the past five weeks.
Asia was broadly mixed as various markets, including mainland China and Japan, continued to trade while NZ, Australia and Hong Kong markets were closed. The Japanese stimulus package provided some lift late last week for the region, but ongoing economic concerns for the troubled nation dragged the Nikkei lower by about 40 points yesterday. In China, news over the weekend was that bank loans soared in March, almost filling the 5 trillion Yuan target of the Peoples bank for 2009. This news that lending had sky rocketed prompted some obvious speculation into bank liquidity given such steep rises. Concerns were calmed by a statement from the Government to the effect that they will insure the loans being made. The Shanghai Composite climbed 2.8% yesterday, following on from strong gains on Friday.
BrisConnections is holding a general meeting this morning to vote on a series of resolutions. Investor Nicholas Bolton has motioned for a special resolution which, if passed, would see the removal of BrisCon responsible entity and the company wound up. BrisCon investors are (currently) required to pay two further A$1.00 instalments. However, as the unit price has fallen dramatically since listing on the ASX many investors bought the units at 0.1 cent without realising they would be required to make further instalment payments. Nicholas Boltons holding company, Australian Style Investments Pty Ltd, owns 19.5% of the units in BrisCon and is calling for a series of resolutions including a deferral of all instalments. If Mr Bolton’s resolutions are passed today investors will avoid paying the $1 instalment due on 29 April 2009 and instead receive a 5.95 cent, per unit, distribution. Today’s vote should determine the ultimate victor of “David vs. Goliath”.
Oil shed 4.2 percent to settle at $US50.5 a barrel, down $US2.19 while gold was up $US12.4 an ounce to $US895.
Our recommendation on Newcrest (NCM) in Thursday’s Market Fox (9 April 2009) still stands.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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