Good morning,

It’s a big day for the RBA today as we wait to see if they are going to do the right thing. A 50bps cut is what is needed…25 is too little too late..the housing market has fallen off a cliff as witnessed by yesterdays numbers and growth is non-existent outside the mining sector with confidence low and inflation even lower..A boost is what is required especially if Uncle Wayne is going to make us all wear hair shirts like Thomas a Beckett! Will no one rid me of this turbulent priest! Clive Palmer,who would have thought…

News that Spain has slipped back into a recession is hardly a surprise..in other economic news from the US the ISM of Chicago said the business barometer fell to 56 in April  from last month’s 62…a 29 month low. The Fed Reserve of Texas also said manufacturing production fell to 5.6 from 11 in March..so things are slowing a little in the US…Have a guess how much the Dow was up in April? I will tell you at the end of the report…

In the US overnight it is worth noting that Equities and Treasuries have dramatically dislocated in the last few days with Treasury yields near multi-month lows and stocks at one-month highs.

                       

What does this mean..well something is wrong that’s for sure..either the market is too high in equities or the bonds are wrong..I suspect both..anyway the market here has punched through my resistance level of 4370..however I still am urging caution..month end rallies on such pathetic volume are not convincing for my money…YIELD IS KING..that’s why the banks and TLS are so strong and the resources unloved..this will continue..NAB yesterday announced a 90 cent fully franked div..not too shabby as rates decrease..

 

YIELD WILL CONTINUE TO ATTRACT INVESTORS…BENDIGO Bank may be worth a look according to my well respected broker friend in Melbourne..research enclosed..BUY THIS ONE…easy..money in the bank!

Things to make me go MMM!

1.Clive Palmer has lost it..build a second Titanic..come on Clive I mean really…the first one was such a success after all..Wayne Swan is going to build a second iceberg!

2.Man United lost to City opening up the EPL !Forgot to mention Chelsea yesterday but 6-1 against QPR not bad especially as Torres got a hatrick..good time to start scoring goals.

3.Few takeovers starting happen..ALS got a tap on the shoulder today from the Dulux Dog(maybe it was a paw on the shoulder) and Spotless said yes yesterday so corporates see the value in equities..

4.A few mining services companies using confession season to come clean with Coffey saying things are tough out there.

5.Home sales hit 10 year low…come on RBA cut by 50 bps ..I dare you ..do the right thing..

6.Turnover in market was abysmal again $3.1bn…

7.Future fund did really well in TLS as the shares are at a three year high…good call guys..well done…least it’s not our future only Civil servants…like the HSU officials!

8.Paul Hogan settles tax dispute..call that a tax ..that’s not a tax …

9.QAN sacking another 400 workers from Heavy Maintenance..will it never end!

10.Calls for an end to ‘fracking’ of Coal Seam Gas by Inquiry..

11.The Australian Industry Group/PriceWaterhouseCoopers performance of manufacturing index (PMI) dropped 5.6 points to 43.9 in April, leaving it well below the 50 level that marks the threshold between contraction and expansion. The reading is the lowest since last September.

In Company News

Woodside has sold some of its Browse basin development to the Japanese..this is big and will ensure WPL has a good day..and BHP as well

Woodside advises that it has accepted an offer from Japan Australia LNG (MIMI Browse) Pty Ltd (MIMI) to purchase a minority portion of Woodside’s equity in the proposed Browse LNG Development for US$2 billion, subject to joint venture pre-emption rights. The effective date is 1 January 2012.

The sale involves MIMI taking 16% interest in the East Browse joint venture and 8% interest in the West Browse joint venture. This would give MIMI an estimated 14.7% interest in the Browse development on an assumed unitised basis. Woodside’s assumed unitised interest in Browse would fall from 46% to 31.3%. Woodside remains operator of the development.

Woodside has also accepted an offer from MIMI for a long-term sales and purchase agreement for around 1.5 million tonnes of LNG a year from the Browse development subject to completion of the equity offer. The price agreed by the parties is confidential, but is in line with traditional Asian pricing for conventional LNG projects.

National Australia Bank (NAB)

National Australia Bank released an unaudited first-half profit figure down 16% on year after it booked write-downs and restructure charges at its struggling UK division worth a combined $709.6m. The Australian lender said it completed a strategic review of the UK assets and has decided to simplify the business to focus on retail and small-business lending in Scotland and Northern England. Most of its commercial real-estate portfolio will be transferred to National Australia Bank’s balance sheet and allowed to go into run-off, it said in a statement. Acquired by Australia’s fourth-largest lender by market value over two decades ago, the Clydesdale and Yorkshire banks have become a blight on its earnings amid deteriorating economic conditions in the UK.

The answer is 1.5 points for the month..wooo hooo!

Clarence

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