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This material has been produced by RBS sales and trading staff and should not be considered independent.
The Round Up
5 November 2009
Issue No. 212
The Round Up is a comprehensive daily note produced by the RBS Warrantsteam providing an overview of market movements along with quality ideas forwarrant traders and investors.
In today’s issue
Global Market Action
Scoreboard, commentary
Aussie Market Action
SPI Comment, Events & Dividends
DJS (DJSSZX) SFI Investment Buy
– Upgrade
QAN (QANKZJ) MINI Trading Buy
– Beneficiary of high AUD
Banks (NAB,ANZ,WBC) Sector Update
– Reporting wrap up
Round Up Corner RBS Monthly Market Review - October
Equities
Move Last % Move Range Volume
ASX 200+8.6 4540.1 +0.2%
+9 to +9 $3.7 bn(L)
SPI - yesterday+3.0 4521.0 +0.1%
-6 to +37 22,436(L)
Dow Jones+31.1 9803.0 +0.3%
-5 to +156 Avg
S&P 500+1.1 1046.5 +0.1%
-0 to +16 Avg
Nasdaq-1.82055.5-0.1% 
-4 to +24 Avg
FTSE+70.7 5107.9 +1.4%
u.c to +84 Avg
Commodities
Move Last % Today % Past Month
Oil-WTI spot+0.6 80.2 +0.7% +15.1%Gold Spot+7.8 1092.2 +0.7%
+8.9% 
Nickel (LME)+4.4 809.2 +0.5% +3.7%Aluminium (LME)+0.8 85.8 +0.9% +6.9%Copper (LME)+5.3 297.2 +1.8%
+11.8% 
Zinc (LME)+2.2 99.9 +2.3% +18.9%Silver+0.2 17.4 +1.2% +7.7%Sugar-0.423.0-1.7% 
-0.9%  
 
 
Dual Listed Companies (DLC’s)
Move %Move Last AUD Terms Diff to Aus
NWS (US)0.14 0.01
+13.7 c
15.00
-14.5 c 
RIO (UK)77.00 0.03
+28.6 c
52.13
-1130.3 c 
BLT (BHP UK)54.50 0.03
+17.1 c
31.04
-589.7 c 
BXB (UK)2.75 0.01
+3.9 c
7.16
-0.6 c 
American Depository Receipts (ADR’s)
Move %Move Last AUD Terms Diff to Aus
BHP (US)0.77 0.01
+67.4 c
37.02
+8.3 c
AWC (US)-0.04 -0.01
+5.9 c
1.61
+1.3 c
TLS (US)0.28 0.02
+14.7 c
3.24
+1.1 c
ANZ (US)0.36 0.02
+20.6 c
22.68
-5.2 c 
WBC (US)1.54 0.01
+117.0 c
25.73
-6.3 c 
NAB (US)0.25 0.01
+25.8 c
28.31
+15.6 c
LGL (US)0.53 0.02
+30.7 c
3.37
+5.9 c
RMD (US)0.36 0.01
+49.4 c
5.42
+2.5 c
JHX (US)1.09 0.03
+32.8 c
7.21
+5.7 c
PDN (CAN)0.07 0.02
+4.0 c
4.12
-0.8 c 
Overnight Commentary
United States Commentary
 
The US market opened cautiously ahead of the Fed comments on rates but as soon as the market became aware of their intention tokeep rates "exceptionally low" investors bought the market. As expected the USD weakened on the back of the Fed's commentarywhich led support to commodities. Strong performances by Merck, McDonalds and United Tech drove the Dow higher.
Economic
- ISM non manufacturing came in at 50.6 vs 51.6 expected , a little disappointing but there was some comfort that thenumber was above 50 and expansionary. FOMC decision was as expected, with no rate change. More importantly the Fed said thatthey plan to keep interest rates at "exceptionally low" levels for an "extended period".
Healthcare
- Merck rallied 6.7% after they said that they expected annual earnings growth in the high single digits on a percentagebasis until 2013. Elsewhere in the sector Aetna and Cigna rallied over 5% on speculation Republican victories in yesterday's electionswill bolster opposition to legislation overhauling health care.
Homebuilders
- Pulte Homes rallied 4.5% after they announced that they had increased the cost savings from their Centex Corpacquisition by 25% whilst also reducing debt by $1.7bn in the 3Q. The sector was well supported with Lennar and Dr Horton both upover 3%.
Sentiment
- The VIX fell for the 3rd day in a row , drifting off 6%, it has now retreated 12% since reaching its highest level since Julyon Oct 30. Of the 378 companies in the S&P 500 that have published quarterly earnings since Oct 7, 84% exceeded estimates,according to Bloomberg data.
Oil Services
- Baker Hughes slipped 5% after announcing that 3Q profit plunged 87% as a result of continuing prices decreases,discounting and extra costs associated with their company reorganisation.
United Kingdom & Europe Commentary
The FTSE climbed 1.4% or 71pts in a broad based rally with miners, banks and retailers all stronger. Banks helped the Euro bourseswith carmakers also chipping in. The FTSE Eurofirst 300 was up 1.6%, the DAX added 1.7% and the CAC jumped 2.4%.
UK Banks
- Good news from SocGen and a re-evaluated outlook by investors saw the sector bounce back. RBS added 1.5%,Barclays was up 4.2%, HSBC climbed 1.4% but Lloyds fell 1.2% as the rights issue weighed.
Euro Banks
- SocGen jumped 4.6% after announcing it had doubled its 2008 3Q net profit. BNP, which reports tomorrow, was up3.5%, Deutsche Bank added 2.3%, Commerzbank rose 4.4%, with Irish banks, Bank of Ireland and Allied Irish Banks both recoveringstrongly, soaring 24.6% and 19.2% respectively.
Auto
- Strong earnings from Renault's 44% owned Nissan saw the French carmaker up 4.1%. GM's decision not to sell Opel alsoboosted sentiment in the sector. Peugeot climbed 2.1%, VW was up 1.1%, Daimler added 3.1%, BMW rose 2.5% and Fiat ended4.35% higher.
 
 
Travel
- BA jumped 6.6% after a broker upgrade ahead of its results due Friday. Travel firm Thomas Cook also benefitted from anupgrade of its stock seeing it climb 7.4% whilst peer TuiTravel added 5.5%.
Retail
- Marks & Spencer, up 6%, was stronger after posting flat 1H results at the top end of consensus with tight management of costsand stock helping. Next was up 5.6% after reporting better than expected 3Q sales. Next also upgraded sales and profit guidance.
Eco
- The British services sector showed its strongest activity since the start of the credit crunch in October 2008. PMI Services were56.9 vs 55.5 expected and up from 55.3 previously. UK consumer confidence, although slightly weaker than expected, hit its highestlevels since April 2008. nationwide Cons Confidence was 72 vs 73 expected but up from 71 previously.
Commodiites Commentary
Miners
- A weaker $US ahead of the Fed's statement saw metal prices climb. BHP climbed 3.3%, Rio added 2.8%, Anglo rose 3%,Xstrata was up 5.9%, Vedanta jumped 5.3% and Antofagasta ended 5.4% higher.
Energy
- Most of the sector tracked crude prices higher. BP was up 0.2%, BG Group climbed 2.5%, Tullow soared 4.5% but Shell justedged down 0.3% after going ex. In Europe Total added 1.7%, Statoil climbed 2.4% and Repsol was up 1.1%.
SPI Commentary
The SPI traded up 4pts or 0.09% to 4522. Open at 4532 with a high of 4555 and a low of 4512. Volume 26,014. Overnight the SPItraded up 23pts to 4544
SPI Intraday SPI Daily
 
*SPI report taken from the 9:50am open to the 4:30pm close on the previous trading day. Charts taken from IRESS 
Upcoming Economic Events for the Week
MondayAUS
AIG/PWC manufacturing PMI, TDMI inflation gauge, ABS existing house price
USTuesdayAUS
RBA cash rate decision
US
ISM, pending home sales, construction spending
WednesdayAUS
AIG/CBA services PSI, nominal retail trade, real retail trade, building approvals, RBA Governor speans
US
Factory orders
ThursdayAUS
Trade balance
US
ADP employment report, non-manufacturing ISM, FOMC funds rate decision
FridayAUS
AIG/HIA construction PCI, RBA Statement on Monetary Policy, Deputy Governor Battellino speaks
US
Non-farm productivity, non-farm payrolls, unemployment rate, average hourly earnings
*Dates are indicative only and may change 
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