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This material has been produced by RBS sales and trading staff and should not be considered independent.
The Round Up
17 November 2009
Issue No. 219
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
CBA (CBAVZG/CBAWZX) Trading Update
– 1Q10 Update
NWS (NWSKZI) MINI Investment Buy
– Leverage to growth
QBE (QBESZX) SFI Investment Buy
– Investor Update
Round Up Corner RBS Model Portfolio – Recovery Bias
Equities
Move Last % Move Range Volume
ASX 200+48.8 4755.2 +1.0%
+49 to +49 $3.3 bn(L)
SPI - yesterday+45.0 4771.0 +1.0%
+24 to +52 18,628(L)
Dow Jones+136.5 10407.0 +1.3%
-3 to +164 Low
S&P 500+15.8 1109.3 +1.4%
+1 to +20 Low
Nasdaq+30.0 2197.9 +1.4%
+9 to +37 Low
FTSE+86.3 5382.7 +1.6%
u.c to +101 Low
Commodities
Move Last % Today % Past Month
Oil-WTI spot+2.5 78.9 +3.3% +0.2%Gold Spot+21.0 1139.7 +1.9%
+8.0% 
Nickel (LME)+31.5 759.4 +4.3%-10.2%  Aluminium (LME)+3.8 90.6 +4.3% +6.8%Copper (LME)+15.0 309.8 +5.1%
+10.0% 
Zinc (LME)+4.8 102.2 +4.9% +11.2%Silver+0.9 18.4 +5.3% +5.2%Sugar+0.5 22.6 +2.3%
-3.1%  
 
 
Dual Listed Companies (DLC’s)
Move %Move Last AUD Terms Diff to Aus
NWS (US)0.30 0.02
+15.1 c
16.12
+6.6 c
RIO (UK)172.00 0.05
+33.1 c
59.33
-1354.9 c 
BLT (BHP UK)48.00 0.03
+18.7 c
33.50
-660.2 c 
BXB (UK)9.25 0.02
+3.9 c
7.01
-3.4 c 
American Depository Receipts (ADR’s)
Move %Move Last AUD Terms Diff to Aus
BHP (US)2.70 0.04
+76.0 c
40.52
+42.4 c
AWC (US)0.06 0.01
+6.2 c
1.65
+1.8 c
TLS (US)0.54 0.04
+15.9 c
3.38
+3.1 c
ANZ (US)0.26 0.01
+21.1 c
22.45
+27.1 c
WBC (US)-0.68 -0.01
+120.0 c
25.60
+30.7 c
NAB (US)0.30 0.01
+27.1 c
28.85
+35.0 c
LGL (US)1.47 0.05
+33.3 c
3.55
+5.4 c
RMD (US)0.62 0.01
+51.1 c
5.45
+0.5 c
JHX (US)1.01 0.03
+36.7 c
7.82
-2.0 c 
PDN (CAN)0.26 0.06
+4.3 c
4.36
+6.1 c
Overnight Commentary
United States Commentary
 
Heading into the close, it's tough to find a sector in the red. Leading the charge are the steel/metal/energy plays, which combine with asupport role from growth and financials has the Dow well off highs but up 110pts. Elsewhere, the S&P up 1.2% and the Nasdaq trading1.3% higher.
Aerospace
- Boeing trading up 3.2% and one of larger pt contributors after comments from Airbus and Boeing mgmt they expectAirlines will emerge from a slump, as early as next year.
Resources/Materials
- With gold setting new highs, oil enjoying its best day in 6 weeks, copper extending 13 month highs, the dolarlower and UK counterparts having a day out, US cyclicals were a standout. Alcoa vying for the Dow's top spot up 4%, so too FreeportMc and US Golds trading 3% higher.
Energy
- Following the lead from the oil price, 39 of 40 S&P energy plays are set to post gains. Devon Energy and Baker Hughes bothup over 5%, Exxon trading 3% higher(biggest pts adder on the Dow), Schlumberger up 3% and ConocoPhillips 2.3% higher.
Steels
- AK Steel up over 8%(one of the S&P's best) and US Steel just outside the top10 trading 5.6% higher, both names added toone broker's "Focus List", forecasting rising prices and a pick up in demand.
Eco
- Advance Retail Sales for October coming in at +1.4% vs +0.9% expected and a significant turnaround on -1.5% in the monthprior. Less Autos was less spectacular,+0.2% vs +0.4% and down from +0.5% in August, so "Cash for Clunkers" a significant part ofthe better than expected equation.
Retail
- Nordstrom led the retailers, trading just shy of 4% higher post a bullish broker note. Predicting a turnaround in high-enddiscretionary spending heading into next year, the report identified Nordstrom as a key beneficiary, upgrading from "neutral" to "buy".
Eco
- Empire Manufacturing 23.51 vs consensus at 30 and down from 34.57 in October. Business Inventories -0.4% vs -0.7%expected.
Bonds/FX
-Despite a general sense of wellbeing around everything equities, yields down 4, 8 and 9bps across the 3 maturities afterBernanke reiterated that economic headwinds will keep interest rates at record lows. As per any recent overnight equities rally, theDXY index under pressure, down 0.7c.
United Kingdom & Europe Commentary
The FTSE hit a fresh 14 month high, up 1.6% or 86pts, as miners followed metal prices higher on the back of a weaker $US. The FTSEEurofirst 300 was up 1.5%, the DAX jumped 2.1% and the CAC added 1.5%.
 
 
UK Banks
- Heavyweight HSBC again led the way, up 2.6%, continuing its good run since it released a strong 3Q update. Barclaysand Standard Chartered were up 1.3% and 1.5% respectively, Lloyds added 0.7% and RBS was flat.
Euro Banks
- The majors tracked the market higher but weakness came from Greek and Irish banking stocks worried about the healthof the system when the ECB withdraws the cheap funding.
Auto
- European car sales were up 11% for October the biggest jump in 3 years. Peugeot jumped 4.5%, Renault added 3.2%, BMWclimbed 3.4%, VW was up 1.1% and Daimler ended 4.4% higher after Aabar Investments said it was in talks to go to 15% from 9.1%.
Materials
- ThyssenKrupp added 4.5% after announcing the sale of its Safway US scaffolding unit. Salzgitter climbed 4.4% after apositive trading update and Arcelor tracked its peers ending up 4.3%.
Commodiites Commentary
Miners
- Gold hit a record high and base metals also took advantage of a weaker $US. BHP rose 2.6%, Rio jumped 5.5%, Angloclimbed 4.1%, Xstrata was up 7.8%, Lonmin soared 9.3% and Randgold added 4.8%.
Energy
- Crude jumped more than 3% helping the sector to strong gains. BP rose 1.2%, Shell was up 1.4%, BG Group climbed 2.4%and Tullow jumped 2.4%. In Europe Total rose 1.6%, Statoil was up 3.1% and Repsol added 0.5%.
SPI Commentary
The SPI traded up 45pts or 0.95% to 4771. Open at 4764 with a high of 4778 and a low of 4750. Volume 20,108. Overnight the SPItraded up 49pts to 4820.
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
MondayAUSUSTuesdayAUSUS
Retail sales, NY Fed Empire PMI, Business Inventories
WednesdayAUS
RBA Governor Debelle speaks, Wage price index
US
PPI, Industrial production, NAHB survey
ThursdayAUS
AWOTE, RBA Bulletin, RBA Governor Debelle speaks
US
CPI, Housing starts
FridayAUSUS
Philadelphia Fed Survey
*Dates are indicative only and may change 
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