Morning all,

‘The market giveth and the market taketh away. ’Bit of reality last night form the US in a heavy trading session which saw it erase the gains of the previous night. Oil got thacked as did copper down 3% so don’t expect our copper stocks to be too flash!!At least Gold stayed relatively steady although Gold stocks across the World continue to suffer from margin calls and forced selling as they have fallen so viciously.

Expect our market to give back at least half of yesterday’s 50 point rise. Banks and other financials will outperform resource stocks and we may see TLS come in for some profit taking but the trend is up for sure.

I have been cautioning for some time that I thought that Easter would prove to be the high point for a while in the markets.(Actually it may have been the Ides of March but close enough) I remain concerned about the next six months. Now I am not saying we are going to crash ,let’s not be alarmist, especially when Uncle Ben is pumping incentives into holding stocks but do believe that we will drift sideways to down until September/October. As they say in that wonderful Greenday song, “Wake me up when September Ends”!

And after the election!!!

Patience, Grasshoppers the market will drift back to 4850…it’s just a matter of time..

Interesting that the combined market Cap of the four Aussie banks is now more than Apple!!!!!!!!…and that was the World’s largest company…$372bn for our banks..they make around $25bn off 25m people..$1,000 for every person in Australia…not sure if I am impressed or worried..

Idea of the Day

Your mission Jim if you choose to except it is, to find a growing, well managed business that is purely domestically focussed yielding 6.5% fully franked?

Come on how hard can it be? I got it I got it….MOC. Mortgage Choice…happy to be long around here ..they pay 13c in Divs fully franked Feb and August.

One of my favourites and, together with the yield, there have been some interesting moves by Yellow Brick Road and Macquarie in the Mortgage market; the recent purchase of Homeloans from the Holey Dollar is interesting. I know the guys that run this one and I have every faith in their ability to continue to reward shareholders and build the business. Looking for a conservative yield play with some corporate appeal perhaps…this is the baby for you!

Things to make me go you must be kidding right?

1.Obama is supposed to be the most powerful man in the World ,drones are sent scurrying around the World, nuclear war can be waged yet he cannot even get background checks on a .38 through Congress..really stupid guys! Charlton Heston was right!

2.Chelsea win 3-0..good stuff boys!!

3.Spring break gonna hit the US markets… The S&P 500 declined 7.1 % on average from May to August in the last three years, according to data compiled by UBS.

4.BHP Billiton: incoming CEO Andrew Mackenzie is poised to stamp his authority on the world’s largest mining company by making major changes to management of the $159 billion company. Mike ‘Chuck’Yeager will retire on 1^st July and a layer of management will be cut as the company focusses on operational issues and excellence.

5.Iron Ore holding up well…not sure it will last! Amazing that the Aussie Dollar is staying so strong!

6. The European Union risks a resurgence of the financial crisis if it allows politics to delay banking union plans, the International Monetary Fund’s Jose Vinals said today. “Moving decisively without delays, without any important political disagreements along the path of the banking union is something which is fundamental.’And more from Zombieland…the wonderful Nigel Farange (UKIP)..

“Years ago, Mrs Thatcher recognised the truth behind the European Project. She saw that it was about taking away democracy from nation states and handing that power to largely unaccountable people.

And I am minded that there is a new Mrs Thatcher in Europe and he is called Frits Bolkenstein. And he has said of this parliament – remember he is a former Commissioner: ‘It is not representative anymore for the Dutch or European citizen. The European Parliament is living out a federal fantasy which is no longer sustainable.”

7. From the Feds Beige book..says it all really…

*FED SAYS `MODERATE’ GROWTH IN U.S. WAS LED BY HOUSING, AUTOS

*FED SAYS U.S. CONSUMER SPENDING `GREW MODESTLY’

*FED SAYS `PRICE PRESSURES REMAINED MOSTLY SUBDUED’

*FED SAYS `EMPLOYMENT CONDITIONS REMAINED UNCHANGED OR IMPROVED’

8.Obama gets a dodgy letter as Apple crumbles below $400 and no one arrested for the Boston Bombings! yet!

9. In companies news, quarterly production reports from Fortescue Metals Group, Woodside Petroleum and Iluka are due for release.Bank of Queensland and Australian Pharmaceutical Industries publish their interim results, while Wesfarmers will release third quarter retail sales figures.

10.And for the bulls hoping that earnings will save the day in the US ..Goldman’s has put this out…

So far, 46 companies have reported 1Q results (14% of total cap). 41% of companies reporting have beaten earnings estimates (below the historical average of 47%) and 9% have missed estimates.

The average EPS surprise has been 3.7%, below the 4.8% historical average. Excluding Financials, there are fewer positive surprises (40%) and similar negative surprises (9%).

Excluding Financials and Utilities, 29% of companies reporting have beaten sales estimates (below the historical average of 38%) and 20% have missed estimates (vs. average of 18%).

The average revenue surprise has been 0.7%, below the 1.3% historical average.

 

Not that bullish really!!!

11. Shanghai is one of four Chinese cities that limit car purchases by imposing quotas on registrations. The prices paid at Shanghai’s auctions in recent months — 90,000-yuan ($14,530) — have exceeded the cost of many entry-level cars, the stronghold of Chinese brands. Good for Ford, Toyota and Volkswagen etc especially needed with European car sales down…. Registrations in March fell 10 % to 1.35 million vehicles, the 18th consecutive decline, with Germany’s auto market plunging 17 %.

 

 

And finally……

The train was quite crowded and, a U.S. Marine walked the entire length looking for a seat, but the only

seat left was taken by a well-dressed, middle-aged, French woman’s poodle.

The war-weary Marine asked, ‘Ma’am, may I have that seat?’

The French woman just sniffed and said to no one in particular.  ‘ Americans are so rude.

My little Fifi is using that seat.’

The Marine walked the entire train again, but the only seat left was under that dog.

‘Please Ma’am.  May I sit down?  I’m very tired.’

She snorted, ‘Not only are you Americans rude, you are also arrogant!’

This time the Marine didn’t say a word; he just picked up the little dog, tossed it out

the train window, and sat down.

The woman shrieked, ‘Someone must defend my honour!  This American should be put in his place!’

 

An English gentleman sitting nearby spoke up, ‘Sir, you Americans seem to have a penchant

for doing the wrong thing.  You hold the fork in the wrong hand.  You drive your cars

on the wrong side of the road.

And now, Sir, you seem to have thrown the wrong bitch out of the window’.

Have a good day… on Sky TV at 6.30 tomorrow morning and on Newcastle radio at 12.20!!

 

Clarence

XXX

 

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