Morning all,

Things were a little more restrained last night with ‘Zombieland’ posting some gains despite the UK recession biting. The Queen’s Jubilee and a rain were to blame apparently but talking to friends from the UK that’s not the only problem!

The US market gave up its big gains late in the day but still finished up 59 so a slightly positive tinge to our market especially with a rally in the Gold price. And other commodities.

Yesterday our CPI came in at 0.5% for the June quarter which will give the RBA some scope to cut rates again if they need to. I suspect they are going to keep their powder dry next time out and keep a wary eye on Europe..If it gets worse ,and I suspect it will, they will be cutting faster than the Guillotine!

Macquarie’s results yesterday highlighted how hard the investment banking business has got and especially in the Equities business…it’s a jungle out there! No sign of any return to ‘Normal conditions’ for some time I suspect, if ever! Luckily their annuity style businesses like Funds management are going ok…who would have thought these boring businesses would save their bacon!That and selling their UK gas business..nothing to see here ..move along!!

After the Billabong bid its time to look for the next potential winner…now some weeks ago ‘Big Nath’ bid $5.20 cash for Whitehaven Coal.The market obviously thinks that he hasn’t got the money, as the stock is trading at 3.80 ish…now at some stage this one will look attractive..not just yet but the risk reward must start to tilt in its favour if they get down around 3.60..the ‘big fella’ has the capacity to surprise and everyone is discounting his bid…maybe they are right to but maybe as Haggarty said it never pays to underestimate him!!We shall see.

The market today will move sideways to slightly positive with Golds maybe in focus after a strong night overseas…the Central Banks are being asked to open the presses as its obvious Politicians have no stomach for the reforms and the pain necessary to avert another GFC.

Things to make me go mmmm!

1.The virtual world of farming gets hit just like the real world..Zynga which makes mobile games like “Farmland”, missed estimates by a country mile and the stock got whacked 40%…..faceplant follows suit…not everything in the virtual garden is rosy it seems!

2.A gauge of homebuilders in S&P indexes slid 3.2 percent. Sales of new U.S. homes fell 8.4 percent to a 350,000 annual rate, the weakest since January, the Commerce Department reported today in Washington.

3.As if we didn’t have enough problems ,the drought in the US seems to be spreading to Asia and Southern Europe!In Asia, the monsoon season, which is critical for that country’s agricultural production, is 22% below normal conditions for the year. Expect to see soaring food prices as a result.

4.Good to see the Barclays Bank COO who quit during the LIEBOR scandal got a nice $14m payout to keep gardening!!

5.Reports in the press this morning that TPG will raise their Billabong offer a tad…think we talked about that in the last few days!!

6.Vale in Brazil has just announced, the world’s largest iron- ore producer, said second-quarter profit plummeted 59 percent, missing analysts’ estimates, after prices for iron ore, nickel and copper declined.

7.NCM production report today…let’s hope for some good news for a change!!

 

If you have read this far, well done…I believe that we are in for some more downward pressure as we head into the beginning of August,thats what the charts are saying, and it would be prudent to stay focused on sustainable yield and safety..rallies should be sold and hatches battened down just for now…no time to be a hero ..let the Olympians do that..and Go Leisel…you are a superstar!

 

And finally…

My son has achieved a certain notoriety for an entry into the Urban Dictionary..makes me very proud!! Well done Will..Bawleys Law..a winner..and so true!!!

 

Have a good day

 

Clarence

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