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5 things you need to know about the Australian sharemarket today

Welcome to Thursday. Here are the five things I’m looking at today on the Australian sharemarket.

  1. The S&P/ ASX 200 Index (Index: ^AXJO) (ASX: XJO) has crashed 1.2% lower after US markets dropped overnight. The Dow Jones fell 1.1%, the S&P 500 lost 0.8% and the NASDAQ was down 0.3%.But those falls look like nothing compared to the drop on Wall Street during the day. At one stage, the S&P 500 fell the most intraday in three years, losing as much as 3%. That index is now down 7.4% since a September 18 high.
    Again it was worries over the strength of the US economic recovery, fears over the spread of Ebola, and you can now add in weak earnings from US banks and Walmart.

    To prepare for a market crash, you need to read this

  2. Commonwealth Bank of Australia (ASX: CBA) boss Ian Narev says its $400 billion mortgage book is safe from a collapse in the economy. Mr Narev has told the Australian Financial Review that the board spent an hour going through six scenarios that could threaten the bank’s business, and concluded that the bank held sufficient capital. Those scenarios include house prices falling 32% and unemployment rising above 11.5%.But the biggest concern for all the banks and their shareholders is a Black Swan event. That is, an event that no one or very few people foresee, such as the global financial crisis and the virtual closure of credit markets.
  3. Ramsay Health Care Limited (ASX: RHC) continues its overseas expansion and has now become the dominant healthcare player in France. Ramsay is expected to launch a full takeover bid for the 16.6% of shares it doesn’t already own in hospital operator Generale de Sante (GDS). The move is compulsory under French law, but is still likely to be thwarted, with one minor shareholder holding around 10% of GDS.Ramsay will be hoping it can gain full control over GDS, as that would increase group earnings.
  4. Tweet of the Day


    If you’re dumping your stocks on fear, you are allowing your heart to rule your head. Foolish investors will be doing the opposite.

  5. Stock of the Day – brought to you by Tim McArthur – are actually 4 healthcare stocks. Give the significant tailwinds for the sector, if you don’t already own any healthcare stocks, or you are looking to add more to your portfolio, you might want to check this article out.My portfolio is already chock-a-block full of healthcare stocks – which I plan to hold for a very long time.

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I consider it essential reading.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

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