Good rally but be cautious
March 13th, 2009 by Neil Gynther
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 7170.06 | 239.66 | 3.5% |
| NASDAQ | 1426.1 | 54.46 | 4.0% |
| S P 500 | 750.74 | 29.38 | 4.1% |
| FTSE 100 | 3712.06 | 18.25 | 0.5% |
| Nikkei 225 | 7198.25 | -177.87 | -2.4% |
| SPI Futures | 3329 | 82 | 2.5% |
| All Ords | 3,190.00 | -8.7 | -0.3% |
| Oil | 46.91 | 4.45 | 10.5% |
| Gold | 924 | 13.3 | 1.5% |
| Silver | 12.958 | 0.143 | 1.1% |
| Aluminium | 1303 | 2 | 0.2% |
| Copper | 3494 | -142 | -3.9% |
| Lead | 1230.5 | -49.5 | -3.9% |
| Nickel | 9540 | -215 | -2.2% |
| Tin | 11000 | -55 | -0.5% |
| Zinc | 1187.5 | -29 | -2.4% |
The Dow Jones index jumped 239.66 points, or 3.5 per cent, to 7170.06. The index has gained 9.5 per cent in the last three sessions. Investors are embracing recent gains whilst remaining cautiously optimistic on the sustainability of any rebound. The banking sector led the rally, with Bank of America reporting it was profitable in January and February and should be able to survive the recession without additional US Government funding. Bank of America rallied up 19 per cent.
The Australian market is expected to trade above 3300 today following big gains on Wall Street. Gold and Oil both had strong gains. Gold gained $US13.30 to $US924 an ounce. Oil was up 11per cent to $US47.03 a barrel ahead of the upcoming OPEC meeting this Sunday in Vienna to discuss rising stockpile levels and the possibility of a reduction in output. Crude prices rallied following Russia’s announcement that it will participate in any co-ordinated production cuts with OPEC.
The Australian dollar has climbed to its highest level in a month fuelling speculation that investors may buy riskier assets. Rising commodity prices and higher interest rates in Australia, 3.25 per cent, compared with 0.1 per cent in Japan and zero per cent in the U.S are attracting investors to the currency. The Aussie dollar rose 1.6 per cent to 65.64 U.S cents.
Use today’s rally to do 2 things:
1. Write any March calls that haven’t already been done; and
2. Sell any stocks that you have been thinking of cutting from your portfolio.
Although we will have rallies along the way we are still in a bear market and I caution investors not to get carried away during the upswings.
Regards,
Neil Gynther
Manager Stockbroking
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.