After weak leads it fell to National Australia Bank (A$30.95, -1.9%) to announce some management restructuring that left the market completely cold. Much of it was in the price and there are now some questions starting to appear about bank valuations based on a 5% yield. Too simplistic seems to be the consensus and maybe we have overrun the fundamentals in the sector. All the banks fell, Australia and New Zealand Banking Group (A$28.48, -2.0%), Westpac Banking (A$30.50, -2.1%) and even crowd fave Commonwealth Bank of Australia (A$69.38, -1.7%) whilst Macquarie Group (A$38.40, -1.9%) came in for some criticism from their old boss, the master of timing, I give you Alan Moss! He has been quoted in the press as saying the Bank needs fresh blood to reinvigorate itself.

Although the resource sector tried hard to make up the shortfall it was never going to happen and after an attempt to rally the market limped to the close and finished down 25 pts on the ASX 200.

Some early signs of sector rotation are beginning to appear as BHP Billiton (A$35.91, +0.7%), RIO Tinto (A$62.10, +0.3%), Woodside Petroleum (A$36.77, +0.1%) and Newcrest Mining (A$22.30, +2.9%) all held up well and in some cases pushed ahead nicely. We also saw better times for other resource stocks especially Gold after the shiny stuff rallied last night. Beadell Resources (A$0.93, +5.7%), Perseus Mining (A$1.85, +5.1%), Sandfire Resources NL (A$6.88, +2.5%), Evolution Mining (A$1.395, +1.8%) and Regis Resources (A$4.56, +2.5%) all to the good. Fallers today were inevitably Southern Cross Media Group (A$1.60, -7.0%) as the Government media reforms did not seem to go far enough with other media stocks mixed Fairfax Media (A$0.62, -3.1%), Seven West Media (A$2.34, -0.4%) all weaker whilst APN News & Media (A$0.36, +2.9%) was slightly better.

King of the defensives Telstra (A$4.53, +1.1%) even managed a small gain today but others like Woolworths (A$35.27, -0.2%) and Wesfarmers (A$42.49, unch) were a tad weaker. Big winner today was Wotif.com (A$4.91, +6.3%) as some bargain hunters emerged. Suspect it will not last too much longer but encouraging none the less.

In retail land all the big names were weaker, Myer (A$2.90, unch), David Jones (A$2.97, -0.7%),Harvey Norman (A$2.78, -0.4%) and JB Hi-Fi (A$14.97, -1.5%) whilst building stocks were weary ,CSR (A$2.10, -1.4%) and Boral (A$5.06, -1.2%) the worse. Other industrials also suffered with Amcor (A$9.32, -1.5%) boxed in, CSL (A$60.03, -0.7%) also needed a transfusion as did Ramsay Health Care (A$30.81, -1.9%) and Cochlear (A$69.14, -1.6%).

Volume was hardly spectacular and the market does feel like it needs a rest and this backing and filling is healthy if we are going to push higher.

Stocks in the News

In economic news today, once again the economists were not even close. The number of home loans approved in January fell 1.5 per cent to 44,383, official figures show, a fourth consecutive monthly fall. That compared to 45,075 approvals in December.

Economists had expected the number of housing finance commitments to fall by 3.1 per cent in January. No cigar here. And in some bad news for the housing sector it appears that first home buyers are deserting the housing market as it falls to its lowest level in two years.

Consumer sentiment is roaring ahead as the RBA continues to cut rates. Australian consumer sentiment has hit its highest level in more than two years amid low interest rates and rising stock markets. The Westpac/Melbourne Institute index of consumer sentiment rose two per cent in to 110.5 points in March, its highest level since the end of 2010.Now call me old fashioned or just plain wrong but I cannot see why the RBA would cut rates to GFC crisis levels given that the World seems to be recovering, the Australian economy is growing at 3.1%,low unemployment and an improving stock and housing market. And now we have the genuine prospect of a change of Government in six months.. Interest rates below 3% I think not!

Poor old Metgasco (A$0.073, -21.5%) have abandoned their plans for CSG fracking in NSW on so much political uncertainty. Now both the Federal and State Governments are coming down hard on the CSG business. Whilst the rest of the World is trying desperately to find Shale Gas, we have pretty much killed it in NSW and QLD for the time being.

In house stocks today Strata-X (A$0.36, +2.86%) continued to attract new money after its recent IPO. Linc Energy Ltd (A$2.83, -3.4%) came in for some profit taking after an announcement this morning stressing how important the Umiat. And Karoon Gas Australia (A$6.57, +3.1%) gave us an update on their Zephyros 1 well. Looks quite promising and should help the stock head higher.

And in true mafia style, Melbourne IT (A$2.26, +15.9%) were made an offer that they could not refuse for their Digital Brands Division. Not bad for a business that is valued in its entirety at $160m.capital management on the agenda, that and a case of champagne!

Tomorrow’s News Today

News Ltd boss Kim Williams says the newspaper publishing giant will consider a legal challenge to the government’s planned media reforms. It seems all the media companies are up in arms about Senator Conjob’s media reforms. The Telegraph even had a picture of his dressed as Stalin. Seems News Ltd is especially concerned about freedom of speech and muzzling the press if they print bad things about the Government. This from News Ltd!

Over in ‘Zombieland’ Merkel is preparing to hand down her budget which will be pristine whilst the extravagant French look like missing all their targets and getting into a lot of trouble with Europe’s paymasters. Of course there are not many French actually still in the country as most have de camped to London to avoid taxes.

Toyota Motor Corp approved the biggest salary bonus in five years as the world’s largest automaker projects the highest profit since 2008 and as an export-driven industrial recovery drives rivals’ pay higher. Toyota agreed to a union proposal for a 2013 average bonus of about 2.05 million yen ($21,375), compared with 1.77 million yen in 2012, the company said today. The automaker paid a 2.51 million yen bonus in 2008, according to the Japan Automobile Workers’ Union. A positive sign that the Japanese economy has moved on form the Tsunami.

David Woo, a currency strategist, says: “US energy independence will likely also help break the vicious circle between the US dollar and oil prices that has been a major source of volatility for the US economy and risk premium for US assets. ‘This it seems is the best reason to buy US equities still.

There is a view out there as well that US companies are in much better shape than the last time the index was at an all-time high.. Not so say the experts whilst households have been paying down debt and deleveraging, US companies debt has hardly budged from highs as a percentage of GDP. The ratio of net debt to earnings before Interest tax, depreciation and amortisation at non financials is 1.5,bang in line with 2009 highs. Buybacks and dividends are rising which shareholders love.

And here’s a headline that I like to see “Australia Banks Still Better Bet Than Resources Companies” -Fund Manager. Love these top of the market signals.