Market Review

“It’s quiet now. So quiet that can almost hear other people’s dreams.” Volume was pathetic and the market tried its best to end square. Without the US market ,we seemed adrift with no one interested in placing any bets before the weekend. There were no real themes to latch on to and with more Zombie talks next week and a Cyprus bailout happening ,investors were in no real mood for risk.

Gold shares continue to be on the nose despite the gold price staying very stable, not quite knowing which way to jump .#SLR#,#EVN#,#SBM# and #KCN# led them down. And down they stayed. The World and his wife continues to say Gold shares are cheap but the ‘computer says no’. It may take some good old fashioned corporate action to light the blue touch paper. With costs so high maybe it makes more sense to buy production cheaply .maybe the only way to cut your costs!

In other resource stocks #FMG# continued their decline with other Iron Ore stock #AGO# also suffering .#BHP# and #RIO# barely got out of bed this morning the volume was so low. However it was nice to see Gina out and about selling her views in her latest book, ”Pride and Prejudice 2” or was it “The Quiet Australian” or maybe even the ‘Woman in the Iron Mask’ not sure which, but I am sure it’s going to be a best seller..

Another day, another downgrade from a mining services company #ASL#. It was the latest to  joining the casualty list after yesterdays ‘aftermarket’ confession. Not sure why companies try to sneak  these downgrades through so no one is watching ,everyone hates to work late adjusting their numbers and only makes the analysts mood worse. Memo to boards be upfront sneaky does not work!

Banks had a quiet day despite Mike ‘007’ Smith suggesting to a conference in Melbourne, that they need a tad more capital but they would easily satisfy the Basel II Global banking requirements. Never in doubt. But thanks Mike. #CBA# was the best of them today with #ANZ# the worse.

The people’s stocks #TLS# clung to its recent 4 year high as the market remains divided on whether it has run too far or is still worth buying. With a 6.5% fully franked yield ,it’s certainly not  as attractive as the sub $3.00 TLS ,but sure beats a bank deposit with potentially some upside…but the big gains have been made.

Stocks in the news

#LYC# perked up today as a number of brokers upgraded them to a buy. This one will continue to benefit from optimism that the worse is behind it. I believe so. In other Rare Earth stocks #ARU# put on some gains today after their recent placement.

Who let the dogs out !Woof! Woof! Other stocks that are attracting vultures include #FXJ#,#MYR#,#GFF#,#AWC# and #BSL# as the value investors hunt through the ashes of once great blue chip companies.

In BBY House stocks today #ROC# continued with the profit taking and #BRU# slipped as the doubters moved to square positions after a good run. Our media darling #SWM# continued to ‘be the one’ as our analyst call at 1.30 proved to be mercurial. Good call Mark. #REY# fell away today after a half-hearted bounce recently.

#CAB# was another loser today as it continued to crater as it has fallen nearly 20% in a month. This one definitely needs a ‘Cabcharge’ to get home although maybe the commission is too expensive.

#DJS# held their AGM today with outgoing Chairman Roger Savage trying to explain to shareholders not only the woeful financial results but also why you could never get any service in a DJ Store .They also confirmed that they would be retaining their flagship city buildings.

Tomorrow’s news today

Next week we will hopefully get a resolution to the current Greek debt issue ,we may see some more talk on the impending fiscal cliff as the US goes back to work and the Gaza ceasefire moves into its second week. We have a number of AGMs next week with BHP going to be very closely watched. We may even get some news on the head honcho Marius Kloppers’ plans for the future. It is never a good thing to have a dead duck leader in charge so any certainty would be welcome. There are 500 AGMs next week so expect stocks to trade very much specific to comments and outlook statements from the Chairmen of Australia. Expect the hunt for supposed value to be continued next week as the banks will underwhelm, big resources will wait for BHP and cheap industrials will figure high on Santa’s shopping list! The Dogs are barking! Woof! Woof!

 

Have a great weekend 

 

Clarence

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