Morning all,

Despite the traumas in Zombieland, the markets have rallied a little. Expect to see some relief in our market today but not to be chased I think…still believe that 4950 is the short term top..

Memo to self do not come to England in February, boy is it miserable…grey people ,grey skies and a grey outlook! I always think its good to look at another country’s TV. The ads are a window into the state of the economy. I think you can learn a lot from the ads. In Australia we are bombarded by car ads, cosmetic ads, food ads and lots of discretionary spending ads. That is except for TEN which seems to have opted out of quality adverts!!Except during Masterchief that is..The economy isn’t that bad BUT…Here in the UK the ads are about gambling web sites and Insurance. There are no expensive car ads or cosmetics or fresh food just winning money and sites like wonga.com which allows people to borrow money at 30% compared to mortgages at 2.5%. And the programs are full of part time property developers nabbing bargains at auction and doing them up cheap. Seems to be a National pastime!

Back to market matters though and the Dow poked its head up above the 14,000 parapet and then gave way again!! Our market will push ahead with the usual suspects in the frame…banks and TLS …up 20 early then drift down again to close up 10.

Idea of the Day

Results season starts in ernest…

TLS – Telstra 1H results preview for tomorrow-By today on weakness
•       Consensus forecasts (13 cps) suggest TLS will deliver EPS below its current dividend payout.
•       There has been discussion that TLS are pulling back on their IT spending and on the whole details on the degree of cost control measures will be vital in terms of establishing TLS’ profit restoration.
•
Rebekah O’Flaherty, who runs Telstra’s retail shops,said iPhone 5 launch “was our biggest trading day in history” at analyst briefing Oct. 31..this is the interesting areas ..how they are killing the opposition in mobile and data!!!

BUY recommendation maintained 
12 month share price target = A$5.01/sh
An EPS result above or equal to the current dividend payout should net further gains for TLS’ share price.

Things to make me go all …King in the Car Park!!

1.Couple of big companies reporting tomorrow NWS and TLS…
2.Dell goes back to its roots as the man behind it all takes it private.He should know a bargain when he sees it..so must be positive right ..or he needs to do surgery nehind closed doors.
3.The UK has had its own Marcus Einfeld situation as a high flying Liberal Democrat Chris Huhne has lied repeatedly for ten years about a speeding ticket that would have cost him 3 points…he made his wife take the can and then he left her for a younger woman…that was a big mistake..now he is 500,000 pounds down on legal costs ,going to jail and in disgrace..why do these people do it..His now ex wife wanted to nail him and nail him she did! She ratted him out!
4.The U.S. is seeking as much as $5 billion in penalties from McGraw-Hill Cos. (MHP) and its Standard & Poor’s unit as punishment for inflated credit ratings that Attorney General Eric Holder said were central to the worst financial crisis since the Great Depression.

5.The US federal government will post an $845 billion deficit this year, the first time in five years the shortfall has dipped below $1 trillion, though the long-term budget outlook remains grim, according to the Congressional Budget Office.

6.National Bank’s problems in Britain could deepen amid predictions that it may be forced to pay out as much as £330 million ($497 million) in compensation to settle mis-selling claims. The country’s Financial Services Authority has begun a review of the mis-selling of “interest rate hedging” products by the country’s banks, paving the way for compensation to be paid out to disgruntled customers. NAB has previously set aside £48 million to cover potential mis-selling claims related to interest rate hedges in the UK.This morning in the UK Barclays has put aside $1bn pounds to compensate customers for mis-selling products.
7.There has been a big vote in the UK on Gay Marriage…not that this affects markets but the issue has divided the parties and David Cameron has fought hard for it to go through…then he didn’t even turn up for the vote..not a good look…will affect his leadership ,he is meeting with other Zombie leaders on Thursday so he needs a strong base at home if he is to argue with his friends in Euro land…he has lost a lot of support here and it will  impact his ability for sure..he is skating on thin ice!

8.China and Japan seem to be heading closer to trouble a major rumble which will not be conducive for a rally!

9.Australia is set to be one of the world’s largest gas exporters in the next five years, although growth prospects beyond that are being hurt by the increase in export projects vying for approval in North America. And Canada is fast moving in on the act with another Gas project approved last night.

And finally….

My mum told me the best time to ask my dad for anything was during sex. Not the best advice I’d ever been given. I burst in through the bedroom door saying: “Can I have a new bike?” He was very upset. His secretary was surprisingly nice about it. I got the bike.

Have a great day

 

Clarence

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