The market is not surprised Incitec Pivot has made a full bid for Dyno Nobel and with the deal expected to be earnings and value accretive most brokers are in favour of the move.
The Dow was down another 150 points last night as some slightly positive economic data were overshadowed by concern over the liquidity positions of major brokerages.
GaveKal looks at why commodity prices are soaring but commodity producer share prices are not.
Just when you thought perhaps the parabolic rise in commodity prices might have stalled, last night oil posted the biggest ever one-day gain in its history. The Dow was choppy once more.
While some arguments suggest it isn’t demand that is driving commodity prices but a weak US dollar SVB shows there has been no re-pricing of commodity costs away from the greenback.
The Dow bounced back from the depths of more financial sector woes last night as commodity prices went the other way – finally reaching a blow-off top that saw a profit-taking scramble.
Municipal bonds became the latest domino to fall in the credit crisis on Friday, and a raft of bad economic and corporate news conspired to send the Dow down 300 points.
As global economic growth forecasts fall, and commodities indices rise, it would seem the world is facing the crippling spectre of stagflation.
The Dow exploded to the upside mid-afternoon when S&P announced bond insurers Ambac and MBIA could both keep their AAA ratings.
Slowing global growth usually means weaker commodity prices but Barclays Capital suggests the current supply side issues across the commodity spectrum should support prices.