Just six weeks ago it was a race to see which of three shares would be the first on the ASX to crest AU$100. Would it be Macquarie Bank, CSL, or Rio Tinto? What a long strange correction it’s been since then.
Mac Bank copped it worst of all in yesterday’s 3% decline on the local index. It was the worst day since the week after September 11th, 2001. Riding the wings of the subprime storm, Macquarie shares lost 10.5% on the day to close at AU$73.70.
Yesterday’s selling had more than just a whiff of panic to it. The market reeked with the smell of fear. “All the major stocks have fallen. The banks are all down, all the retailers are having a bloody shocking day, all the resources are getting hammered … It’s hit them all square on the nose,” said ABN Amro’s Bill Bishop. “I wouldn’t like to put a figure on it, but there’s a fairly good chance things aren’t going to be too flash tomorrow.”
He could be right. Wall Street mysteriously recovered in the very last hour of trading early this morning. “U.S. stocks rose after a rally in computer and consumer shares lifted the Dow Jones Industrial Average 150 points in the last 20 minutes of trading,” reports Bloomberg. Was it program trading that flashed a buy signal after the market lolly-gagged for most of the day with a 79 point loss?
The Daily Reckoning Australia