Market Review

What a difference a day makes! After yesterday’s pathetic surrender in the afternoon, it was very heartening to see green across the board. And I do mean across the board. There was only ten stocks in the ASX100 down when I last looked. Firing on all cylinders as the index cruised through the 4400 level. Suspect it will run out of steam shortly but in the absence of any bad news it may climb higher. News of Peace in the Gaza plus good numbers out of China were enough to send the shorts running for cover. This despite the breakdown of talks on the latest Greek bailout, which is going to be discussed at yet another meeting next week!

Banks were back in favour and ‘risk on’ stocks plus defensives all took off. The punters favourite #TLS# hit $4.29 today as investors continue their love affair with the stock . In financials #NAB# remains the worse of the four banks with #CBA# the quality leader.

Once again though volume was a little on the skinny side but breadth of today’s rally was very promising.

Usually we see a good open give way to apathy, but today the Chinese Flash PMI lived up to its name rising to a 13 month high of 50.4, helping the market gather more confidence. Even retail bounced back as the #MYR# boss called on the RBA to save his job and cut rates before Xmas. Although the market eased off in the last hour or so it was still an impressive performance but did feel a little like a bear rally with shorts being punished. Remains to be seen if the bulls can keep their nerve and push it higher. Maybe.

Stocks in the News

#LYC# finally announced some good news as 100 pallets of Rare Earth Material arrived in Malaysia. This is going to happen and as the realisation that this company is going into production dawns on the market the unbelievers and the week holders will have their stock sucked off them.

#KCN# and #SBM# came in for some selling today along with #FMG# as not all the boats rose. #SBM# seemed to suffer from a underwhelming AGM whilst #KCN# suffered a similar fate following theirs yesterday.

In BBY house stocks #CSS# were covered in spring water drawing some good volume and positive sentiment. #REY# fell slightly after their meeting whilst #ROC# gave up some recent gains. #IXR# emerged sheepishly back on to the market having completed its recent placement at 11c to raise $3.7m.

#PMP# announced another raft of job losses and plant closures as it continues to battle the fact that no one uses the white or yellow pages anymore.I am amazed they have been around this long to be honest.

In the winner’s circle today was #BSL# having held an investor day yesterday, word was out that things are improving in one of their steel making businesses they bought last in 2004 called Butler.

Shares in #GFF# rallied after the food and ingredients company said it would review its dividend policy at the half year and was aiming to cut its cost base by $100 million by 2015.

In a hardly surprising development #WOW# shareholder voted overwhelmingly to knock back a proposal from Activists Get Up to limit the Poker machine limit.95% of shareholders told them where to go and how limits were not the way to go at least not alone!

In resource news, there has been lots of commentators predicting the demise of the Aussie LNG industry as the US Gas price hovers around $3.80 MMBtu while our gas price is in the 12’s!#STO# came out fighting this morning suggesting that the market was not comparing Oranges with Oranges and the US price landed in Asia would be not dissimilar to our home grown variety. Time will tell but #STO# certainly are committed to this view with Gladstone and PNG LNG project well advanced.

Tomorrows news today!

The market will now go into a quiet few days as the US is closed for Thanksgiving but in a vacuum of US information and markets, we could continue to push higher before topping out around 4450 before a consolidation. Talk of a Greek solution will swirl around and the ceasefire in Gaza will enjoy a shaky existence. In the stock market as the shorts cover ,the impulse to buy will wane and with it the index. It’s good advice from an old trader I know, that the market is a stock market and its made up of stocks and they have the ability to all move independently and its important to remember that good businesses do well whatever and bad ones will ultimately get found out. Look at PMP as a classic example.