Market Review

Once again a quiet day today with the indices meandering around until the PM session when the news from ‘Zombieland’ on the Greek bailout emerged. It looks like the ‘Troika’ of lenders have once again failed to agree on whether to give the money to the Greek Government. Time seems to be running out on this one so they had better agree soon or it will really start to hurt markets. The market swooned and then headed down in thin trade.US futures turning weaker didn’t help but I have long suspected that they are reactionary rather than leading market. Still the news will unsettle the Zombies tonight and again push the focus on the massive deterioration in the economy across Europe.

The Chinese market also broke through the psychological 2000 level as disappointment that the new leadership have not moved to stimulate the economy and important technical support waivered. Also news from Japan of their exports reaching a three year low have not helped Asian sentiment which is already fragile at best.

‘Risk off’ was the order of the day as #BHP#,#RIO#,#FMG# and #WPL# led the way down. Once again defensive #TLS# shone with the banks trying hard to stay in the black.

In retail land after the fiasco that was ‘Click Frenzy’ ,when most web sites crashed ,it appeared to confirm what  we all knew all along that the local retailers are just so far behind in their internet businesses that it is frankly embarrassing. #DJS# having opted out of the ‘Frenzy’ to do their own thing also crashed and burnt after 1st quarter sales. Xmas is going to be a big letdown for the big guys I suspect. Still we will see. Let’s hope they are not the Xmas Turkeys!

Media shares all gave a little back today as #FXJ#,#TEN# and #SWM# all eased. In takeover or potential takeover land #BBG# bucked the red trend whilst #ARI# eased and #GNC# went nowhere.

Volume was again disappointing as we head into Thanksgiving in the US.

Stocks in the news today

#CDD# continued their horror run today falling as downgrades sunk it following yesterday’s train wreck. I was hoping for a bounce but tried too early to catch a falling knife. Always a recipe for losing fingers!Memo to self ..man who tries to pick bottom ends up with smelly fingers!!

#CSL# gave up its stellar gains today as gravity took hold following a rush towards $50.Looks like the top is in for this one.

#BDR# was the top performer in large cap land as it approaches the first gold to be poured. Slight delays to the project in Brazil but will be worth it.Stock needs to break through the $1.00 level convincingly to test the $1.10 level. Looks promising though.

#CSR# continued its run on hopes of a building sector recovery. News from Uncle Fester (Glenn Stevens) yesterday suggested that the rate cut cycle was not finished will help the housing market .#BLD# have also risen off the canvas together with #BKW#. Housing sector the big beneficiary of the cuts.

House favourite #BRU# posted gains again today as the market digested news of approval for its Cyrene 1 project and the recent drill results. Another oil stock on our list is #KPL# which has been gathering some attention in recent months as the go to small cap in the PNG oil and gas sector .Other resource stocks  to feature today for the wrong reason was #NCR# which continues its slide.

After yesterday’s rout in #MOC# the stock turned up looking to have found its bottom around the 160 level. Great dividend yield and again should be a beneficiary of the more optimistic housing cycle. Maybe there are some holders that are worried about the competition that Mark Bouris and Yellow Brick Road will bring to the market and eat into their business. If anything the banks will have to fight back and use the broker channels like MOC to keep the Wizard of Oz at bay.

#LYC# slipped a little again today following Nick’s bullish comments at the AGM and production talk.The Chinese look to be setting up a special fund to support its local Rare Earth Miners. Not sure how that is going to play out with LYC but still a lot of unhappy punters having taken the stock at 75 c in the recent placement. Not nice!

In AGM news #QRN # faced an investor backlash on executive remuneration and somewhat beneficial accounting rules to ensure everyone got a nice bonus.

News from the US overnight that HP have discovered some accounting irregularities with the company Autonomy that they bought last year are somewhat worrying. This was the UK poster child run by the English equivalent of Bill Gates, so it has come as some surprise that they appear to have dressed the books up for a better sale price. Interestingly Autonomy is a business that makes sense of Human Info and enables big companies to understand the meaning in complex information. Now call me old fashioned but when I looked at the web site ,it is anything but bringing any kind of meaning to information. Now if a company in information cannot communicate on its web site, then to me that sets off alarm bells. The HP issue will get bigger I am sure. Anyone remember the smartest guys in the room!

 

Clarence

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