Good morning,

Well everybody is bullish and I remain sceptical..however the RBA’s rate cut yesterday helped immensely..they are finally listening..although it remains to be seen how much of the cut is passed on to the Mortgage punters but we can only hope that a meaningful amount is. As those who follow my ravings on a regular basis will know I have been slightly bearish mainly predicated on the ‘Zombieland’ problems…despite the rallies here and overseas, I do remain worried but I guess happy to go along for the ride whilst keeping a beady eye on the exit doors…elections in Europe are my flashpoint and May 6th is going to be interesting with Greece and France going to the polls.

 

The rally in the Dow continues and with the index trading on 14 times reported earnings against an average of 16 since 1954..even Big Al Greenspan ..(night of the living Zombie) says stocks are cheap..as interest rates remain low around the World and now getting lower here in sunny Australia you can see why banks and TLS offer such good rewards…yields around 7% fully franked minimum..this will continue..the thing that worries me is that whilst the US delivers earnings upgrades and surprises here all we deliver is profit warnings!

Things to make you go MMM.

1.US manufacturing number surprises to the upside

2.ANZ numbers show the growing importance of Asia. The cash result, which strips out one-offs and investment losses or gains, rose 5 per cent to a record $2.973 billion, close the level expected by analysts in a Reuters survey. DIVIDEND UP TO 66 Cents

3.Rupert Murdoch not a fit and proper person…

4.Big four yet to rule on rate cut but expect it to be around 35bps in mortgage rate.

5.Optus slashing more jobs…the hidden unemployed continues to grow..these people traditionally are reluctant to go to Centrelink for a while..

6.Rare in these markets.. Brambles says it is on track to meet its full-year profit target after unveiling a 33 per cent rise in its latest sales results.The world’s biggest pallet supplier said total sales from continuing operations rose by a third to hit $3.56 billion in the nine months to the end of March, compared to the previous corresponding period.

7.US gas prices are improving and will help BHP justify its $20bn spend and may help the share price..something needs to!

8.Budget looming next week as Slipper looks set to be investigated by Police!

 

Lucky that not many people have listened to my sell in May and Go away strategy but then only my Mum reads this far…I still favour caution as volumes are low but sentiment is improving and if only BHP can rally a bit then the market will push higher…banks will hold up on divs alone..don’t be tempted to sell TLS by the way..28 cents fully franked is too good to throw away!And to have sold their Copper wires to Gillard must be the best deal since Alan Bond bought Chanel Nine from Packer!!!He said then you only get a chance like that once in a lifetime..well TLS got that chance..thanks Gov!

WPL should be looked at on weakness if there is any!

Enjoy the ride but as they say on a plane …please check where your exit doors and follow the lights on the floor if there is an emergency..

Clarence

XXX

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