A Great Day for Taking Profits
November 5th, 2008 by Lawrence Grasso
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 9625.28 | 305.45 | 3.3% |
| NASDAQ | 1780.12 | 53.79 | 3.1% |
| S P 500 | 1005.75 | 39.45 | 4.1% |
| FTSE 100 | 4639.5 | 196.22 | 4.4% |
| Nikkei 225 | 9114.6 | 0 | 0.0% |
| SPI Futures | 4345 | 134 | 3.2% |
| All Ords | 4,169.80 | -3.2 | -0.1% |
| Oil | 63.96 | -4.14 | -6.1% |
| Gold | 726.8 | 8.6 | 1.2% |
| Silver | 9.75 | 0.02 | 0.2% |
| Aluminium | 1966 | -4.5 | -0.2% |
| Copper | 3960 | -35 | -0.9% |
| Lead | 1455 | -14 | -1.0% |
| Nickel | 11355 | 50 | 0.4% |
| Tin | 14000 | 140 | 1.0% |
| Zinc | 1100.5 | 9.5 | 0.9% |
U.S. stocks rose in an Election Day rally on Tuesday, as investors looked forward to the end of the uncertainty surrounding the long fight for the White House. The Dow Jones industrial average rose 305.45 points, or 3.28 percent, to end the session at 9,625.28.
In the past month, traders could have shown up on Wall Street at 3 p.m. and not have missed much. The last hour, even the last minutes, of trading seemed to be the only ones that mattered in October. But the days of one-hour markets may be waning, at least for now. Traders say the intensity of these extreme late-day swings of 443 points on average in the "witching hour" for the Dow Jones industrial average in October, could let up as some of the so-called forced selling abates.
On a local front Australian shares are set to rise on Wednesday as a thaw in global credit markets continue and after Wall Street rose on relief that uncertainty over the U.S. presidential election will be over.
Rises in oil of $6.48 and gold of $30.5 should see a boost in resource stocks such as Woodside Petroleum Ltd (WPL), Oil Search (OSH), Newcrest Mining (NCM) and OZ minerals today. If you have holdings in these stocks it would be a great day to sell calls or take profits.
Banks
On the banking front, Westpac (WBC) goes ex a 72 cent dividend today. ANZ goes ex a 74 cent dividend tomorrow.
Yesterday's official interest rate cut of 0.75% by the Reserve Bank has caught economists out for the second consecutive month. Further rate cuts maybe be on the cards in the coming months and we could potentially see the official rate at 4% by end 1Q 09.
BHP & RIO
BHP Billiton and Rio Tinto Ltd will be in focus today after European regulators gave a statement of objections to BHP over its plan to buy Rio. BHP Billiton is continuing to work cooperatively with the European Commission and, in accordance with the established merger review process, will be responding in due course to the issues raised. In February BHP Billiton, the world's biggest miner, made a hostile, all-share offer for smaller rival Rio Tinto. The deal would create a global force in iron ore, metallurgical coal, aluminium, copper, uranium and other commodities. European steelmakers object to the merger, saying it would give the combined BHP-Rio a market share of almost 40% of the seaborne iron ore market. Rio Tinto and BHP are now the number two and number three iron ore producers after Brazil's Companhia Vale do Rio Doce, which has about one-third of the market for seaborne iron ore.
The government will release its mid-year economic outlook on Wednesday, with Treasurer Wayne Swan telling local radio that the global financial crisis will hit government revenue.
Trade balance and building approvals data for September will be released at 11:30 am (0030 GMT).
A GREAT DAY FOR TAKING PROFITS!
A note from Neil Gynther - Head of Broking
One of our advisers Zeyar Htut, has taken up an offer with AXA Asia Pacific in Hong Kong. We have fortunately had Lawrence Grasso (who wrote today's Market Fox) join us. Lawrence has extensive experience in the Equities and Options market and will be looking after all Zeyar’s clients, Lawrence will be calling you progressively but please do not hesitate to make contact with him (direct line (07) 3031 9912).
Cale McCulloch is on leave at the moment (back Tuesday 11th Nov). We have been calling his clients who have had calls expire as they can write new premium this month. If you are in this position and have not heard from us, please contact one of our brokers or myself.
Regards
Neil Gynther
Head of Broking
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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