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Morning all,

After a long weekend it’s always difficult to think of intelligent things to say about the market. Certainly Insurance stocks will be a little weaker as the floods in QLD continue. Coal stocks and AZJ (the company formerly known as QRN) will also be in the spotlight with flooded mines and infrastructure on the agenda.

The Market still feels like it wants to go higher but does need a rest .It has been going up in a straight line for a few months now and a pullback would be healthy. The majority of the heavy lifting has been done by the banks with some gains in BHP/RIO and other big resource stocks chipping in as well.

There is a good article in the SMH today on the cost of funding for banks which has fallen due to the bonds they have been issuing..another reason to have banks in your portfolio..still feel NAB offers the best value! It has been the biggest dog of the four, so any good news from UK will be welcome.

Lots of numbers coming out from the US and China this week so market will be in a holding pattern…GDP numbers and Non Farm on Friday plus FOMC meeting…at least Apple is turning the corner! Why doesn’t it just buy Samsung!!Sorted!

Idea of the Day  AJL Speculative Buy.

Fracking and shale seems to be in the news at the moment and there is a good article on Shale in the UK on Bloomberg…after a  ban for 18 months due to issues with Earthquakes..the UK Government has recently allowed Fracking to start back up, and sitting quite pretty in the  box seat is ,Aussie Driller AJ Lucas (AJL). This little battler has rocketed over the last few months on this news and the market is waiting for further developments from its subsidiary Cuadrilla Resources and the Bowland Basin project…talk of more gas than the UK needs ever is obviously bullish. Cuadrilla plans to fracture and test one well at its Becconsall site in Banks, Lancashire, and another at its Anna’s Road site near Blackpool in 2013.They are looking for farm in partners so there should be news to come there as well…couple of big hitters involved in the project too with Ex BP CEO Browne on the team…expect 2013 to be a defining year for this stock…happy to recommend as a speculative buy around these prices..expect volatility though and bet with your head not with your heart.

Things to make me feel like Noah!

1.Fairfax Media: Could raise up to $90 million from the sale of its printing facilities in Sydney and Melbourne, substantially reducing its levels of net debt. Tullamarine print facility in Melbourne might attract offers of between $25 million and $30 million, while the Chullora site in Sydney has an estimated worth of $50 million to $60 million…just not sure to whom…maybe another newspaper company?

2.Hedge funds increased bullish commodity bets by the most in six months as accelerating growth from China to the U.S. boosted prices for a seventh week. Speculators raised net-long positions across 18 U.S. futures and options by 11 percent to 758,048 contracts in the week ended Jan. 22, the biggest gain since July 3, U.S. Commodity Futures Trading Commission data show.

3.Individual investors are showing increasing confidence in stocks. Money is flowing into equity mutual funds after four years in which assets fell by almost $250 billion. About $22 billion flowed into stock funds around the world in the week ended Jan. 9, the second-highest rate on record, according to data compiled by research firm EPFR Global going back to 1996…Dow at 13,900 ….its back on..

4.Ooops!! France’s labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt.”Didn’t he read the memo about lying to the public…Mon Dieu!

5.From todays SMH… “Covered bonds have brought down bank costs even further. In a confidential note to its institutional clients, Westpac describes the fall in wholesale funding costs over the past year as ”extraordinary”.

No longer can the banks rely on that hoary old chestnut of ”high funding costs” to pass off their failure to match the successive cuts in the official cash rate.”

6.Anglo-American advised it had shuttered some mines and Aurizon, formerly QR National, said parts of its Central Queensland Coal Network were also closed.

A spokeswoman for Anglo’s metallurgical coal division said Central Queensland had experienced ”significant rainfall over the past few days and production at some of our operations has been impacted by flooding and temporary road and transportation access issues”. But improving weather conditions had allowed Anglo to resume work in some areas.

7.China’s stocks rose, driving the benchmark index to the highest level in seven months, after industrial profits climbed for a fourth month in December. “Industrial company profits are fueling gains for the index,” Huang Cendong, an analyst at Tebon Securities Co., said from Shanghai by phone today. “In the longer term, we expect Chinese stocks to rally as company earnings in general will be better this year.”

8.Would have been an interesting discussion round the Windsor’s table with news that the Old Dutch Queen is abdicating in favour of her son..

9.Chelsea managed to squeak out a draw in the FA Cup …would have been embarrassing to lose to lowly Brentford….and congratulations to Sydney FC Women who won the championship at the weekend..well done girls..

10.And from the pain of Spain….

Spanish mtges

And finally….

“It’s amazing that the amount of news that happens in the world every day always just exactly fits the newspaper.”Jerry Seinfeld…how true

Have a good Tuesday and if it’s your first day back after the Xmas holidays…suffer, baby suffer!!





Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.