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Not a good start to the week – down 46 or 1.2% - was down earlier more than double the 37 point fall the SFE Futures suggested this morning. We are following Wall Street's poor show on Friday with all sectors down. Financials underperforming. Resources outperforming - Both BHP and RIO are both up 3% and 3.9% after being down earlier in the session. A further 140 companies in the All Ords have hit a fresh yearly low today.
Cars, planes, retailing, engineering, food and building groups around the world cut earnings forecasts, production or jobs on Friday in one of the gloomiest days of the year so far for earnings and stockmarket confidence.
Call it bad news Friday, when a string of earnings downgrades were issued by companies large and small at annual meetings, or ahead of meetings in coming weeks.
It makes you wonder why BG Group of the UK didn't think of the idea first, instead of charging off after Origin in a rush of ambition.
Only one issue to focus on: the credit crunch, the looming recession, and the US Federal Reserve's reaction to it by a rate cut, and what happens in the various sectors of the financial markets.
The market is down 58 – at its low – despite being up 55 early in the session. Both resources and financial struggling and property trusts are underperforming. Ninety-two stocks in the All-Ords have hit a fresh 52 year low – most of them repeat offenders – Bradken, Bluescope Steel, Caltex, Fairfax Media, Leighton Holdings, Lend Lease and Panoramic Resources to name a few.
GPT has confirmed it's looking to raise between $1.6 billion and $1.9 billion to recapitalise its business, and says it will now be concentrating on Australia.
Because of annual meetings, updates and quarterly statements, this week has given us an unusually large number of reports from a wide mix of retailers, possibly the widest for a week that we have seen for some months.
Predictably, the early media reports on the ANZ Bank's profit for 2008 and highlight the 23% drop in cash earnings to $3.02 billion, and the rise in write-offs and losses to $1.9 billion.
