Morning all,

The to-ing and fro-ing in the US continues with both sides of Politics seemingly starring over the Fiscal Cliff and seeing no promised land of commonality. As we enter the Santa zone the market has a good chance of rallying..75% of the time it rallies every time..the average gain on both the US and Aussie market is around 2.6% however we do have the fiscal bluff to get through!

There are signs that the Chinese economy is turning round and even the Japanese economy is heading up with surprisingly good Industrial Production numbers out for October.

All eyes will be on Uncle Glenn tomorrow to see whether he will cut rates again…now the consensus is pretty evenly balanced but I believe that he WILL NOT cut rates…although the local economy is slowing dramatically as the mining investment cycle draws to a close and cost overruns hurt projects, I think he will keep his powder dry and see how the last lot of cuts have helped the economy. The real issue is not rates as the banks are slow to pass on the cuts anyway but the exchange rate! Now the theory is that as we lower rates the currency should come under pressure . Unfortunately the AUD is one of the few AAA rated currencies left and our rates are still way above the rest of the world’s…If we got down to that level then we would see the mother of all property booms..we Aussies love to buy houses!

Expect a subdued day today with the Golds a little weaker after the price fell on Friday…expect the firm footing to continue in media stocks as the Government toys with rule changes to the media laws enabling some corporate consolidation.

Probably see the market ease 5 points after last week’s good run..we await the US developments and the RBA decision! And the cricket!!

Things to make me go all Swing Low Sweet Chariot!

1.England beat the All Blacks…a day of mourning has been announced in NZ and the team told not to bother to come back!

2.Chelsea lose again..I expect the Russian will be looking for a new manager by the weekend!

3. GOLD production in Australia slumped in the September quarter, as the nation’s mines lagged under planned and unplanned equipment outages.

Statistics compiled by Surbiton Associates show the amount of gold produced in Australia was lower than the June quarter of 2012 and the September quarter of 2011.

4.Is this a game changer..as the World warms up some previously unworkable trade routes are starting to emerge .A US tanker full of LNG is about to complete a trip from the Arctic Ocean to Asia….whence one goes the rest will follow..cheap US gas going to Japan ….gotta love climate change!

5.Chinese PMI comes in at 50.6 heading in the right direction…although Iron Ore was weaker on Friday…back to 115.60.

6.Rio looks like its cutting back its zircon production as weak prices and too much production continues to hurt the industry..ILU still on the nose.

7.NAB chairman under fire over the banks pretty lacklustre performance over the last few years..

8.Chevron/ Woodside: is poised to unveil an increased budget of nearly $60B for its Gorgon LNG project in WA (a blow-out of $17B) and a delay in the start of production into 2015. The announcement, expected later this week, is likely to heighten worries that some of the seven LNG projects under construction around the country will struggle for profitability, at least in their early years.

9.FXJ Chairman Roger Corbett said Gina Rinehart, the biggest shareholder of Australia’s second largest newspaper company, could fill a board vacancy provided she abides by the same arrangements as other directors. “We would be happy to have Mrs. Rinehart on the board if she’s prepared to join the board on the same arrangements as all other members.”

And finally…..  I went to the doctors the other day and I said, ‘Have you got anything for wind?’ So he gave me a kite.

 

Have a good Monday

Clarence

XXX 

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