Good afternoon all,

Sorry for no newsletter this morning I had to go to the Doctors..anyway to make up for it here is the afternoon report..back on deck tomorrow.

Market Review

Once again the slow burn was the order of the day.Following disappointing GDP numbers, the initial rally gave way to fear and doubt before confidence returned as the Banks and #RIO# led the wayhigher.3.1% GDP is still pretty good.Most OECD countries would kill for that.Somewhat mixed news in the leaders with #CBA# continuing to push ever higher whilst #QBE# were singled out for the silent treatment.Other financials like #MQG# also looked strong as did #WBC# #SUN# and #ANZ#.Following yesterdays rate cut it was ‘pile back into yield’ day today with the focus on fully franked high yielding well run companies.It is a crowded trade but does not make it wrong yet! #TLS# churned around whilst defensives like #WOW# and #WES# were less spectacular.

Retail land also was in demand following the rate cut,even though #NAB# only passed on 20 bps of the cut,#MYR# and #JBH# all looked positive as did #DJS#.#XRO# reversed yesterday’s losses to push ahead again.Its been a sparkling debut for these babies as has it been in another stock beautifully named #BBR# which has had a great run since listing.

In Resource stocks #RIO# is showing #BHP# a clean pair of heels as the market likes its cost cutting moves whilst the Big Aussie, and that’s not the same as the ‘Big Bogan’ ,is seen as having unresolved leadership issues and the problem with their US gas acquisition recently.

Mining services had a few bright spots with #ASL#,#MAH# and #CDD# improving.

News from Shanghai helped the warm fuzzy feeling, as Chinese stocks rallied 3% and volume doubled as the new man in charge held his first meeting.Should hold a few more.All signs out of China have been mildly positive with better numbers and the new leadership talking about boosting the domestic economy and support small business.Maybe they will take out TEN,that’s a small business!

Volume again unconvincing but maybe this is the new reality!

Stocks in the news today

A couple of old stories were back in the headlines today with #SDL# announcing more problems with the Chinese takeover as funding now seems to be an issue.This one looks like it will run and run,whilst #TEN# was back in the 6 o’clock news as it is due to try yet another capital raising.Bet the Billionaires Club wish they had never heard of this one..seriously..one raising after another and still the same MD in charge.The blame for poor programming must be laid at his door step surely.It will be and stop calling me Surely!

#TPG# had a great day today as their AGM guidance of between $256-263m in EBITDA was just what the market was hoping for.

As an aside I was at a prize giving last night when Gail Kelly spoke.Very impressive.20 minute speech, no notes, delivered to a huge audience brilliantly.You can see why she has got where she has got regardless of her ability to run a bank ,she is an inspiring leader.I was nearly convinced that #WBC# was on the right path with her.

In house stocks today,Biotech #MSB# was a casualty as continued worries about the state of the Teva deal rolls around.#LYC# also issued an update today saying that the documents that the activists are going to court with, on the new date of  7th December, are pretty much the same. So they appear confident of a positive outcome .We shall see but it would be nice if we can get a definitive answer on this and move on.One way or the other.

Todays biggest loser in the large caps was #OGC# which announced its capital raising had been done at 3.00 to raise $93m.I am sure those institutions that took the stock are delighted as they are now well under water!Hope they are not the same advisers for Ten!

Another big loser was #WSA# which completed its raising at $3.80 and promptly went to the same price.Slightly better than OGC but for investors game to take placements it is not the free money it used to be.But then what is!

And loser of the day may have been Nathan Tinkler who appears to have had his corporate jet and helicopter repossessed.

Whilst the winner appears to be former Greek PM Papendreou “Papa Smurf” ,whose 89 year old mum appears to have made a nice nest egg of $550 in her Swiss bank account.

Tomorrows News Today

The economic numbers have been coming thick and fast but all seem somewhat irrelevant compared to the Fiscal Bluff.Negotiations continue and will continue it looks like for some time.The two parties appear a long way away across the valley at the moment. However the markets seem to be ignoring this risk.The US market seems to be in denial about the risk and we are better supported than Collingwood at lower levels in our stocks.With rates falling where else is there to put your money?Bank deposits are paying you very little, whereas shares look a much better bet.This theme looks set to dominate at least until Xmas as Santa looks like he is putting the finishing touches to his flight path and he will be off and away with the Elves! My target of 4750 looks a little ambitious but 4650 is very doable in three weeks.

And finally for the Gold bugs,the Bank of Korea has increased its Gold reserves by 20% last month in an effort to diversify .They now have 84 tons of the stuff.Gold looks set for its 12th annual gain.Trouble is for the Gold producers everyone now plays the ETF’s as they never have grade issues or production problems.Answer surely must be for bigger dividends from Gold producers. It is just a matter of time!

And is everyone else sick of those NAB ads saying don’t trade like it’s the 90s.Well I remember the 90’s well and it was sure more fun than this market! So happy to trade there, thanks NAB especially if I can pick up shares at 90s prices!Except #FXJ# that is!

Clarence
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