Market Review

 

Another positive day with a slow burn rather than the usual whoosh. Positive news from #BHP# was welcomed by the market and comments from #RIO# ,about cutting around $5bn from the cost base over the next few years, also helped set the tone. Most leaders were positive especially so after the better than expected Capital Expenditure numbers this morning. A warm and fuzzy glow emanating from the US also helped sentiment. As risk was embraced the gloss came off the people’s favourite #TLS# but #CSL# continued its meteoric rise after the upgrade. Media stocks were again good recovering from their oversold positions. #FXJ# were a stand out and #SWM# and #NWS# tried to push higher whilst even Channel #TEN# were in demand as the Simpsons returned to the schedule.

Retail stocks were generally unchanged although the stock that everyone loves to hate #JBH# was again weak after announcing the other day that they would sell whitegoods! There are at present 22% of the shares shorted by pros. Other heavily shorted shares include #FXJ#16% #MYR# 15% #FLT# 12% and #HVN# 10%

 

The momentum in the market gathered all day mirroring the weather in Sydney as the storms cleared and we could see a ‘bright ,bright, bright sun shiny day!’

 

There seemed to finally be some rotation out of TLS into more risk assets today, finally although the TLS presentation seemed to be well received in Melbourne yesterday didn’t help the price today.

 

Volume was slightly better than recent days but still on the skinny side at $4.06bn  as is now the way of things.

 

 

 

Stocks in the News

 

Another slew of AGMs with BHP the daddy of them all talking succession planning and preaching diversification along with fending off some nasty wicked shareholders that wanted more dividends, more returns..the cheek of it!

 

House stocks in the frame included #MSB# ,#LNC# both holding AGMs today. MSB gave no new indications on its phase three trials with their partner Teva so we may have to wait until the Teva Investor day on 11^th December for more details to emerge. The good news was though there was no bad news so that is good news indeed.

 

Following on from the excellent energy conference yesterday #BRU# continued to slip a little whilst #AWE#, #ROC# and #NSE# had better days. The AWE update on their Arrowsmith project helped turn the sentiment in this one but I believe that BRU are being slightly misunderstood at the moment and their time will come.

 

In the Canine club today was #SPL# following an investor briefing their founder surprisingly resigned .Not a good vote of confidence I am afraid and the shares were punished. News that their Viva Gel product will not file a drug application in the US was also pretty disappointing. Seems their trial to treat BV (Bacterial Vaginosis) was not that flash after all..

 

Mining services seems to be a sector completely devoid of friends. Today was #BKN#  and #NWH# turns to be the bad boys, #MRM# and #MIO# together with #ASL# all joined the Krufts showcase as margins continue to get squeezed and projects cancelled. Looking through the losers in Mid cap land there is a litany of services companies today..from #MYE# to #MAD# they are all hurting.

 

The capital expenditure figures also look at expectations not just past results so it will be no surprise that the latest survey shows a 3.3 per cent dip from their intentions three months earlier, with most of that coming from an 8.1 per cent pull back in mining. This bodes well for future interest rate cuts although I still believe the RBA will hold fire. Uncle Glenn needs to keep his powder dry in case the US falls over the cliff and more radical surgery is needed.He is probably still sulking that he missed out on the BOE job. Not sure the currency bribery scandal helped his cause.

 

Gold shares were surprisingly firm considering but then they never really got going when the price popped!

 

#WHC# rallied slightly as Nathan Tinkler’s Patinack Farm thoroughbred stud has come up with the more than $240,000 it was required to pay in unpaid wages today and assured workers it hopes to keep their jobs, settle all debts in full, and will apply to terminate the liquidation begun last week. Maybe he will not have his WHC shares taken off him after all by the financiers.

 

Tomorrow news today

The ‘cliff’ will be again front and centre as Tim Geithner heads up the hill to talk turkey .Seems like Obama has set a Xmas deadline. There are a  few rumblings from South Korea firing rockets to scare the birds away, this will help the gold price recover perhaps. Suspect the computers will be kept on their digital toes by statements from various politicians. Expect volatility again ,low volumes, wary investors and a focus on Tim’s chat .It’s month end tomorrow so we may see some window dressing to keep things interesting. In 76% of Decembers the market is up an average of 3.4%.Bring on Santa! Our market does look well supported albeit on low volumes but with a rate cut decision next week, the focus will remain on yield ,sustainable earnings and over sold media stocks. Mining services will remain on the nose. That is all.