Good morning,

Over the weekend the French have elected a new President and the Greeks look to have given the ruling parties a drubbing. So once again ‘Zombieland’ will lurch into uncertainty with now the East German recipe for austerity under fire and the focus on growth. Unfortunately most of Europe has slipped into recession again and the news out of the US was not too special either with anaemic jobs growth giving the Dow bulls cause for a long hard look at themselves. Oil dipped below 100 bucks, AUD heading to parity and weakness across all equity markets.

This will continue….I have been cautioning for some time now that things have been pretty good for the first quarter and it can’t last. Whilst I am not for a Doomsday scenario, I do feel that it gets harder from here and the risk is to the downside. Markets hate uncertainty and that’s what we have in spades now…the new man’ Hollandaise sauce’ in Paris holds the key as ‘Teacozy’ was ‘Moaning Mertle’’s greatest ally, so I suspect he will be summoned to the Reich Chancellery to be wooed pretty quickly. It’s gonna be an interesting meeting and let’s not forget that the Greeks will now look to renegotiate their debt etc…so once more unto the (debt) breech dear friends,once more ..or fill up the default with the our Greek dead.

Over the pond in the US, we saw some more disappointing news with the jobs estimates massively wide of the mark with only 115,000 jobs created in April. We may yet see QE3 and even Europe may fire up the printing presses…we should go long printers ink maybe..

Our market today will take it badly…SPI futures were down 50 odd points so expect a weak opening and then nothing….Budget tomorrow so that will sideline most big players..expect volumes to be light and conviction lacking but the markdown will stick. Expect to see us pullback towards 4300 again and the breakout to have been a false dawn…

Things that make me go mmm!

1.Zombieland election results, with more to come.

2.Budget tomorrow will deliver a small surplus after some jiggery buggery but it’s all political and Swanny’s last one..hopefully…but then as someone said to me …if Abbott is the answer it’s a scary question!!Come back Malcolm!

3. Explosives maker Orica has reported a 4 per cent fall in first-half profit, beating market forecasts even after chemical leaks forced it to shut a plant temporarily and heavy rain and strikes hit demand from coal mines.

4.Continued focus from resource stocks on costs..expecting a whole heap to get canned including Olympic Dam expansion scaled back perhaps.

5.English Premier League is going to be a nerve wracking final Saturday..Go City!

6.Scary fact of the day(Courtesy of zerohedge.com)… In the US in April the number of people not in the labor force rose by a whopping 522,000 from 87,897,000 to
88,419,000. This is the highest on record. The flip side, and the reason why the unemployment dropped to 8.1% is that the labor force participation rate just dipped to a new 30 year low of 64.3%.

                       

7.Dow futures looking nasty!Down 112…ouch!!!remember sell in May call..and they scoffed!

8.Why do we have some rubbish leaders..listening to Gillian Skinner on the radio about Royal North Shore Hospital ..it’s always someone elses fault..the other guy did it ..a pollies defence! I used that when I was a kid..it was like that when I found it!!Really!!Mum didn’t believe it either!!!

9.Greek Neo Nazi party ,Golden Dawn ,wins its first seat in 40 years.

10.Have to mention Chelsea..One down ..One to go..allez les Bleus..

Chuckle for the day..how does Bob Marley like his doughnuts…with Jammin

And how do his friends like them..they like Jammin too!

Choose safety..choose life!

Clarence

xxx

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