Australian investors got no leads from Wall Street on Friday and the market today will be a bit directionless.
US investors are wary ahead of the US Federal Reserve meeting later this week and the better than expected jobs figures for November.
There were second thoughts Friday in US markets after the jobs figures made optimistic traders haul back expectations for a half a per cent cut by the Fed this week.
US stocks were barely changed either way as the enthusiasm faded from the day before after the attempt by President Bush to project a subprime mortgage rescue mission fell flat amid rising scepticism from market commentators.
The small movements left the S&P 500 up 1.6% for the week, and 6.1% for the year. The Dow rose 1.9% for the week and is now up 9.3% over the year so far and Nasdaq rose 1.7% to be ahead by 12% so far this year.
The support Thursday for US homebuilders and mortgage companies eased Friday when the investors who chased the stocks the day before, realised the highly limited nature of the rescue plan in the fine print. It's not compulsory, around 240,000 at most subprime mortgage holders with starter rates resetting higher from next month might be in line to qualify for help; and there's no way of assessing if lenders and financiers are co-operating.
Nor is it yet clear just who will wear the cost of lost income and any losses resulting from credit rating downgrades.
JPMorgan Chase & Co wrote in a research note quoted on Bloomberg that last week's surge by builders was "sparked by misplaced optimism'' and the low point in the US housing market may not come for another three to six months.
Deutsche Bank AG analysts said the government's accord may offer "fast track'' relief to as few as 90,000 subprime borrowers. The fast track option is the cornerstone of the Bush plan and offers an automatic five-year interest rate freeze for eligible borrowers to prevent them from defaulting when rates reset higher.
Here our market accepted the Bush plan at face value and will have to re-assess its worth in light of the new thinking from the US.
Half our 1.8% rise came late in the week with the major indices rising around 0.8% on Friday.
The All Ords closed at 6714 and the ASX 200 at 6654.
If you had to pick one sector that might provide a lead today look at resources where corporate activity in London surrounding Xstrata could be a driver (see accompanying story).
There wasn't much guidance from the best and worst performers on the ASX 200 list last week.
Consolidated Media Holdings was the top goer after its first up listing in the wake of the PBL split.
It rose 42.8% to $4.22. Much of that was index driven and investors buying to get a weighting in media, but there was a significant amount of speculation about a possible move on the company by either News Ltd or Telstra to secure control, or a higher stake in pay TV groups, Foxtel and Premier Media Group.
Cons Media will continue to be a target for such speculation while it remains listed. It has shareholding in Foxtel, Premier Media, PBL Media and Seek but not control. However they are valuable to the likes of News and or Telstra.
Incitec Pivot jumped 12.1%, Allco Finance rose 11.6% with some odd share price rises Thursday and Friday before and after a shareholder meeting on an insider-rich last week.
Seek rose more than 9% because Cons Media was up. Cons Media owns 27% of Seek.
Zinifex jumped 9% on speculation Xstrata might bid at $20 a share. Engineering group, Bradken rose 9.55% and Compass Resources was up 9.8%.
Macquarie Infrastructure rose 9% amid strong speculation of a restructuring by Macquarie Bank. It's one to keep an eye on because the talk of some significant changes is quite strong.
Property group, Australand was also higher, rising 8.7% in the wake of speculation about a link up between Mirvac and Lend Lease.
And Perth based contractor, Monadelphous Group was 8.76% higher on speculation there might be some corporate activity among the strongly performing contractors, civil engineers and mining services operators.
Among the not so hot Boom Logistics continued to head lower with another 14.3% fall, STW Communications shed 10.5% on talk there might not be a buyout bid from London based WPP.
Bendigo Bank eased back 8.7% after the big run up in November, Iress Market Technology fell 8.6%, again on suggestions a mooted bid won't emerge. Independence Group fell 8.4% and Hills Industries lost 7.6% on its deal to merge its TV antenna and associated businesses with BSA for a 50.1% controlling stake.
Managed Investment Schemes groups, Great Southern and Timbercorp shed 7% each, Nexus Energy fell 6.5% and engineering group, United Group was 4.2% lower.
In the US an interesting move came at investment bank, Bear Stearns where billionaire investor Joseph Lewis lifted his stake in America's fifth-biggest broker to 8% from 7%, making him the second-largest shareholder behind Citic Securities of China with around 9.9%.
A private report showed US consumer confidence dropped more than forecast to the lowest in more than two years in December because of continuing high petrol and oil and the credit and housing-market woes The Reuters/University of Michigan preliminary index of consumer sentiment fell to 74.5, the lowest since the October 2005 reading following Hurricane Katrina, from 76.1 last month.
US employers added 94,000 jobs to their payrolls in November, following an upwardly revised 170,000 gain in October. The unemployment rate held steady at 4.7%, instead of rising to 4.8% as expected.
As a result yields on US Government securities rose sharply to finish at 4.10% for the main 10 year bond. That's up from around 3.78% earlier in the week.
Meanwhile the AMP's chief strategis
