Markets rebound
December 3rd, 2008 by Lawrence Grasso
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8419.09 | 270 | 3.3% |
| NASDAQ | 1449.8 | 51.73 | 3.7% |
| S P 500 | 848.81 | 32.6 | 4.0% |
| FTSE 100 | 4122.86 | 57.37 | 1.4% |
| Nikkei 225 | 7863.69 | -533.53 | -6.4% |
| SPI Futures | 3570 | -2 | -0.1% |
| All Ords | 3,473.00 | -145.6 | -4.0% |
| Oil | 47.05 | -2.29 | -4.6% |
| Gold | 783.3 | 6.5 | 0.8% |
| Silver | 9.615 | 0.235 | 2.5% |
| Aluminium | 1642.5 | -48 | -2.8% |
| Copper | 3530.5 | -65 | -1.8% |
| Lead | 1060 | -23 | -2.1% |
| Nickel | 9580 | -180 | -1.8% |
| Tin | 12105 | -745 | -5.8% |
| Zinc | 1164 | -26 | -2.2% |
In a session that showed more indecision than conviction, the stock market rebounded Tuesday from the previous day's massive decline. The Dow Jones industrials rose 270 points after fluctuating sharply, and all the major indexes rose more than 3 percent. The market remains uncertain about what might lie ahead, from how long the recession in US might last to more troubles in the struggling financial sector. Wall Street this week is uneasy about a number of reports due to be released, primarily Friday's jobs report that is widely considered the most important economic reading of the month.
On the Local front the Australian market should have a positive open tracking a late surge on Wall Street. Look for the XJO to open up around 80 – 100 points.
QAN
Qantas Airways limited has confirmed that it is exploring a potential merger with British Airways via a dual listed structure. A merger with British Airways makes sense for Qantas as it would help Qantas compete with airlines such as Singapore Airlines and Emirates, which have different ownership structures and different operating cost structures. Qantas has been saying publicly for some time that it would likely merge with another airline in next couple of years, the only question was which one.
BNB
Babcock and Brown Ltd lenders demanded the company halt dividends to shareholders and interest payments on subordinated debt as conditions for granting a A$200 million loan. The loan would keep Babcock & Brown operating until the end of the year and one member of a 25-strong banking group has yet to agree to the new credit, the newspaper reported, citing unidentified people close to the company.
RECOMMENDATION
SUN - BUY
On a daily chart, look for the stock to close a gap at 8.46. It previously had a run at this level but didn’t fill the gap, so look for the stock to have a big move today and potential fill the gap tomorrow.
Food for thought
Don’t forget this month is a short expiry December 18th.
So make sure you contact your broker to sell calls and lock in some premium. For example buying 1000 BHP @ $27.20 and selling 2800 DEC 08 call and receiving approximately $1.62 in premium. As we have always suggested concentrate on the “BLUE CHIPS”.
Furthermore for those clients with high LVR’s we are suggesting to deleverage their portfolios to create a buffer against the wild swings in the market. Ask your broker how they can assist you with this.
QUOTE OF THE DAY -Life is a succession of moments, to live each one is to succeed. Corita Kent
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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