Good morning,

Last night that well regarded ratings ‘guesser’, S&P, downgraded the Aussie banks by one notch. They hit Macquarie with a two notch downgrade! Now has a B in it! This may have a slight negative effect on our big four but compared to their overseas counterparts they are paragons of virtue and solid as a rock! Any weakness is probably an opportunity to start to pick some up..

The Governor of the Bank of England ,”Sir Merv the Swerve’ last night told all aboard Flight UK to Brace! Brace! Brace! This should NOT have come as a revelation to the UK banks who have been in the crash position for some time and getting money out of Europe as fast as their little legs will carry them! But it was enough to unsettle the good time feel..Wall Street though had a modest fall which given the 500 pt rally the day before is pretty darn good..it has rallied 814 pts in three days..not too shabby..just goes to show how many shorts were out there and how the computers are just running the show!

Non-farm payrolls tonight in the US are the big one..watch this space..now to our market..I feel that the range is set well and truly 4000 to 4400..it may go a little past these numbers but if you buy aggressively when the market is at 4000 ish and sell aggressively when the market hits 4400 you will be sweet..So here we are at 4200 ,to me it’s an each way bet..although I favour the upside.

What we have seen happening around the World is the Central Banks assuming the leadership role which is so sadly lacking form the overpaid Bureaucrats and the Stuffed Politicians…If they cannot see a way out the Central banks will do it for them…they are not elected (well a little I guess) so they  are more focussed on actually solving the problems than being important on the World stage..

I remain positive on our market but expect the road bumps to continue for some time..I believe that the high yielders are an attractive place to be especially as rates will come down here and elsewhere…with banks yielding around 7% fully franked and stocks like MOC 10% Fully Franked these are worth buying..and of course our old but boring friends TLS..

Do NOT chase things higher but be patient set realistic buy price targets and have an exit price in mind..

BUY price targets for the Banks

ANZ-19.50
CBA-45.00-46.00
NAB-22.50-23.00
WBC-19.50-20.00

Obviously they are higher than that at present so scale your buys..Buy more lower down and less higher up!

Another neglected story here is the Oil Price…now if the World was really headed for a massive slow down you would expect the price to reflect this ..it doesn’t ..so why is this..IRAN..this is shaping up to be quite a ding dong and there is some serious implications for the world..$120 oil would not be helpful to any recovery but it may happen…make sure you have some Oil exposure in case things get ugly in Iran…

TODAY’S CORPORATE EVENTS

BHP: Sell-side analyst introduction to new CFO

DJS: AGM

ECONOMIC EVENTS

US Non-farm Payrolls

US Unemployment Rate
AU Building Approvals