Girls will be boys and boys will be girls It’s a mixed up muddled up shook up world except for Lola”.

The great resource/ industrial see-saw was back in operation today as an initial burst of enthusiasm waned with Financials weaker across the board whereas we saw bargain hunting/short squeezes in the heavily bombed out Resource sector. 40 point range today with a small gain of around 8 pts on the ASX 200 to finish the week. The big question of course is not, “Do you feel lucky?’ but is this a genuine bargain hunting spree or just some book squaring before the weekend? We have had a pretty torrid week in resource land with big falls in Golds and BHP Billiton (A$31.40, +2.4%) and RIO Tinto (A$54.32, +4.3%) after the heavy falls in Gold and Copper, so will it continue? Or come Monday is it back to business as usual and buy banks and sell resources. I believe that the magnitude of the bounce is a fair indication of the aggressive professional short selling and panic that we have seen this week. Looking at my market map this afternoon there is a great blob of red which is the banks and a blob of green which is BHP Billiton (A$31.40, +2.4%),Fortescue Metals Group Ltd (A$3.77, +9.9%),RIO Tinto (A$54.32, +4.3%) and Newcrest Mining (A$16.65, +4.8%). Other defensives also suffered with Telstra (A$4.76, -0.6%) giving up some recent gains as well as the Supermarket Twins Wesfarmers (A$41.76, -1.1%) and Woolworths (A$35.49, -0.2%).

Other sectors that benefitted from the short covering were the Gold stocks with Kingsgate Consolidated (A$2.62, +9.2%), Evolution Mining (A$0.93, +1.6%), Silver Lake Resources (A$1.35, +5.9%), St Barbara (A$0.705, -1.4%) and Medusa Mining (A$3.18, +15.6%) all looking very oversold. In copper stocks Sandfire Resources NL (A$5.86, +12.7%) Independence Group NL (A$3.29, +5.8%) and #SIR# improved. Whilst big cap losers today included Harvey Norman (A$2.74, -2.1%), Westpac Banking (A$31.23, -1.9%) and News (A$29.59, -1.8%).

Property trusts held relatively firm in the face of the bank selling with Westpac Banking (A$31.23, -1.9%) the worse bank and GPT Group (A$4.09, +0.2%) and Stockland (A$3.84, +0.3%) relatively unchanged amongst the leaders.

Energy stocks recovered with Woodside Petroleum (A$34.10, +0.7%),Oil Search (A$7.14, +4.1%),Origin Energy (A$12.12, +0.8%) and Aurora Oil & Gas (A$3.02, +7.9%) leading the recovery in the large ones whilst Buru Energy (A$1.90, +6.1%), Karoon Gas Australia (A$4.04, +3.9%), Drillsearch Energy (A$1.16, +12.6%) and Senex Energy (A$0.70, +4.5%) were in the happy place today.

Volume was not too that flash again but it has been a long week and very painful for commodity stocks. Maybe we could all start wearing a ‘Stay Calm and Buy Resources’ T shirt!

Stocks in the News

In house stocks Pharmaxis Ltd (A$0.315, +14.5%) had a better day after some promising results from one of its rivals shone the spotlight on the potential market for this treatment. Whilst the big cheese Warrnambool Cheese & Butter Factory Co. Hold. Ltd (A$4.10, -10.9%) turned a bit sour on reflection after the move yesterday. Mining services had a great day, for a change, with Boart Longyear (A$0.905, +9.7%), Bradken (A$5.43, +7.5%), Maca (A$2.47, +6.9%) and NRW (A$1.225, +6.1%) bouncing hard.

Santos (A$11.65, +2.4%) revealed its 1st quarter results today with growth projects on track and production of 12m BOE which was 2% lower than the first quarter of 2012.Importantly the average price of gas was 4% higher at $5.43 driven by higher prices here and in Asia.

Gold, poised for a fourth weekly loss, swung between gains and losses as outflows from exchange- traded products countered rising physical demand from Australia to India. Silver headed for the worst week in almost 19 months.

Transurban Group (A$6.55, +1.1%) will book a $50 million cost over-run on an upgrade to the Hills M2 tollroad in north-west Sydney, which is running behind schedule for completion. Australia’s largest tollroad operator emphasised that the extra spending will result in ‘‘enhancements’’ to the motorway such as bridge strengthening and power supply to a tunnel.

Australia’s best retailer Mark McInnes has called on the Federal Government to raise the threshold on GST free transactions to $20 from its current $1,000 level. He says there is no way that local retailers can compete on a level playing field and Julia is missing out on a $1bn

Lynas (A$0.485, +1.0%) says it is on track to meet its target of producing 11,000 tonnes per year of rare earth oxides at its controversial Malaysian rare earths plant by the end of the second quarter. The Australian firm added in a quarterly report released today that its Phase 2 expansion of production capacity at the plant to 22,000 tonnes per year of rare earth oxides was near completion.

Insurer QBE Insurance Group (A$13.00, -0.8%) has reached a settlement with New York agreeing to pay $US10 million ($9.7 million) in civil penalties and revised practices for insuring troubled mortgage loans.

Spot iron ore prices were on track for their second weekly loss out of three as Chinese steel mills limit their inventories of the raw material amid slower growth in steel demand in the world’s biggest consumer. Shanghai steel futures were headed for their worst week in two months after being sold off along with other commodities by investors wary about the prospects for the global economy following recent bleak data from the United States and China.

Tomorrows New Today

Looks like Rolf Harris has been arrested in the UK!

In bad news for the town of Parkes, home of the local Elvis’s ,it seems like a US Elvis impersonator is responsible for the recent Ricin letters that have been sent to the POTUS and a Senator. Obviously wasn’t singing “Return to Sender”. Looking at some ‘Jailhouse Rock’ for this!

G20 meeting this weekend. ‘Lots of Death by Minibar’ and motherhood statements, about keeping debt under control whilst trying to stimulate economies, I suspect! The head of the International Monetary Fund (IMF), Christine Lagarde, has expressed renewed concern over the health of the UK economy, saying they are “not particularly good”, Ms Lagarde said. Der!

India’s Supreme Court on Thursday r relaxed its previous blanket ban on mining in the mineral-rich southern state of Karnataka, providing some limited relief to the country’s crisis-hit iron ore and steel industries. Not a positive for the Iron Ore boys trying to keep the price up.

And in a week where 3 people were killed in the US in a ‘Nutter’ bomb attack, 27 people were blown up in Baghdad today. Happens every day there so nobody seems to take much notice anymore. And the Gun lobby has won again with Obama the most powerful man on Earth looking like he may need a little help. Even Superman can’t fight Kryptonite (or the NRA).

Blackstone Group LP pulled out of bidding for Dell Inc. amid concerns about the computer maker’s finances and the worsening outlook for global PC sales, said people with knowledge of the situation.

Catch me on Sky Business News this afternoon at 5.30pm.

Have a great weekend. Normal service will be resumed next week.

Clarence

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