The Australian share market looks to be bracing to slide even further past the 4000 mark today after Wall Street closed sharply lower. US stocks tumbled around 6 per cent in the first day of trade since Standard & Poor’s historic credit downgrade and amid growing fears of a recession. The price of gold has broken through another record above $US1,700 an ounce.
US economic news
Standard & Poor’s has downgraded US mortgage giants, Fannie Mae and Freddie Mac, from triple-A to AA+, citing their reliance on the US government.
Wall Street's favoured measure of investor anxiety has spiked. The Chicago Board Options Exchange Volatility Index jumped 50 per cent to end at 48, the highest level since March 2009.
Figures
Wall Street: On Monday, the Dow Jones Industrial Average plunged 635 points to close at 10,810. The S&P500 slumped 80 points to close at 1,119. The NASDAQ dropped 175 points to close at 2,358.
European stocks started the week sharply lower: London’s FTSE down 178 points, Paris down 153 and Frankfurt down 313.
Asian markets, stocks also dropped: Hong Kong’s Hang Seng was down 456, Tokyo Nikkei was down 202 and China’s Shanghai Composite was down 100.
The Australian share market plunged 2.906 per cent on Monday: The S&P/ASX 200 Index fell 119 points to close at 3,986. On the futures market the SPI is 153 points down.
Currencies
The Australian Dollar at 7:30AM was buying $1.02 US cents, 62.53 Pence Sterling, 79.35 Yen and 71.96 Euro cents.
Economic news
Due out today is National Australia Bank’s monthly business survey for July.
From the Australian Bureau of Statistics, housing finance data for June.
Company news
Shares in Coca-Cola Amatil Limited (ASX:CCL) started the week 3.04 per cent down at $10.52. Analysts are expecting the softest first half profit growth since 2006 when beverages manufacturer Coca-Cola Amatil today reveals its interim result. The Australian Financial Review says the consensus from most analysts is that Coca-Cola Amatil will miss its guidance of 5 per cent growth, to report a net profit of $232 million, up 4.7 per cent from the year before. The company is also today expected to announce significant restructuring at its SPC Ardmona food business, after launching a strategic review in May. In the 2010 financial year Coca-Cola Amatil increased its net profit by 11 per cent to $497 million.
Yesterday shares in Commonwealth Bank of Australia (ASX:CBA) finished 1.38 per cent lower at $45.62. CBA’s full year results are due tomorrow and expectations are for a record $6.8 billion net profit result. If achieved it would be the largest bank profit ever achieved in Australia, and compares with the $6.1 billion CBA delivered last year. The bank is also preparing to hand the reigns to Ian Narev who will take over from the current CEO Ralf Norris at the end of November. In the first half of its 2011 financial year Commonwealth Bank reported a profit of $3 billion.
Ex-dividends
No companies are going ex-dividend today. Coming up tomorrow are Eservglobal, Rio Tinto, Westfield and Westfield Retail Trust.
Commodities
Gold is up $61.40 to $US1,713 an ounce for the December contract on Comex, silver is up $1.17 cents to $39.38 for September and copper is down 16 cents at $3.96 a pound. Oil is down $5.57 at $81.31 a barrel for September light crude in New York.
