A stunning day with records falling in bank stocks faster than a pool full of East Germans in hi tech swimming suits! Commonwealth Bank of Australia (A$71.70, +2.4%) and Westpac Banking (A$32.50, +2.5%) all pushed up to highs whilst other financials also powered ahead. The 11.30 CPI print was the catalyst in an already well bid market. The data showed that inflation momentum is subdued, with both headline and underlying inflation printing below expectations. The 6-month annualized pace of the underlying inflation is now running at or below 2%, the bottom of the RBA’s target band. The low level of inflation will add another argument to the central bank’s case to further reduce interest rates.

With rate cuts back on the agenda investors focussed on yield stocks. Financials broke higher with Suncorp Group (A$12.64, +3.8%), Australia and New Zealand Banking Group (A$29.90, +2.2%), QBE Insurance Group (A$13.26, +1.2%) and Macquarie Group (A$37.58, +1.4%) all significantly better. The defensives like Telstra (A$4.88, +0.8%) and the WWW’s all did well with Xero Ltd (A$10.83, +6.7%) becoming a $1.25bn company yet to make a profit!

Turning to the Materials space, Woodside Petroleum (A$38.74, +2.1%) extended gains after announcing yesterday that it will be increasing its payout ratio and return cash to investors. Others in the space, AngloGold Ashanti (A$3.73, +3.6%), Independence Group NL (A$3.35, +3.7%), Oz Minerals (A$4.35, +1.4%), Beadell Resources (A$0.685, +5.4%), RIO Tinto (A$54.68, +1.6%), and BHP Billiton (A$31.70, +1.1%) also posted gains. Cathay Fortune has indicated that it is willing to make a proposal to Discovery Metals (A$0.34, unch), and wants a response from the board by April 26.

Iron Ore play Mount Gibson Iron (A$0.505, +1.0%) traded higher on news that the company has completed its Mid West Tenement acquisition. On the other end of the spectrum, Atlas Iron (A$0.825, -4.6%) continued on its downward trajectory, now losing more than 57% of its value since February this year.

Golds were awful again with Silver Lake Resources (A$1.025, -6.8%) plumbing new depths of despair. Consumer Cyclical stocks such as JB Hi-Fi (A$16.49, +3.6%), TABCORP (A$3.35, +1.5%), Flight Centre (A$37.00, +0.3%) and Harvey Norman (A$2.98, +4.2%) benefited from positive sentiment as did Staples Wesfarmers (A$43.37, +0.8%) and Woolworths (A$36.81, +2.3%) as well as Telco heavyweight Telstra (A$4.88, +0.8%).

Media stocks rose as Fairfax Media (A$0.645, unch), Seven West Media (A$2.02, +0.5%), Ten Network (A$0.32, -1.5%) and APN News & Media (A$0.375, +7.1%) all joined the party. Other industrials like Leighton (A$19.85, +4.3%), Brambles (A$8.80, +1.7%), Qantas Airways (A$1.88, +3.9%) and Aurizon (A$4.09, +2.8%) partied like it was 1999!

Stocks in the News

Horrible, horrible news for long suffering shareholders and followers of Pharmaxis Ltd (A$0.15, -52.4%) as it turns out their drug Bronchitol is no better than a placebo really! Another house stock also suffering today was Coffey International (A$0.195, -35.0%) where the management seem to have been slightly too optimistic about the recovery!

Billabong International (A$0.48, unch) has granted the private equity buyers another ten day extension. The longer this goes on for the lower the price as management will be massively distracted by these guys looking over their shoulder all the time.

Brambles (A$8.80, +1.7%) has forecast that a strong final three months of the fiscal year will help deliver an underlying profit above $US1 billion. The company has maintained underlying profit guidance of $US1.03 billion to $US1.06 billion for the full year.

Mining contractor Downer EDI (A$4.82, +2.6%) has confirmed that 106 jobs have been cut at the Idemitsu Boggabri coal mine in NSW.

Much better than expected inflation numbers today suggesting that the RBA has room to cut in May. “Headline” March quarter Consumer Price Index shows a rise of 0.4 for the quarter and 2.5 per cent over the year.

Tomorrows News Today

The tidal wave of cheap money that the Japanese Government has unleashed is washing around where it is not supposed to go with yield plays around the world attracting attention. Even borrowing costs in the ‘Zombie’ zone have fallen substantially as the wads of money finds a European home.

Japanese stocks continue to gain from the weakening Yen as the phoney currency war continues. Printing presses are running hot around the World and equities are the beneficiary at the moment.

Bloomberg News cited the head of the Chinese Academy of Social Science, who said that China’s GDP will fall to below 7.5% in 2Q due to reducing fiscal income and natural disasters.

A whole new term has been coined by HSBC-‘Demising’-it what happens when you sack a whole load of staff. Some HR boffin has come up with this beauty. HSBC, there would be a “demising” of 942 relationship manager roles, staffed by employees who do not give financial advice.

It seems incongruous that while we see economic numbers suggesting that World growth is spluttering at best (recent German, Chinese and US numbers), and falling at worse, we have share markets that are pushing onwards and upwards. Is there a disconnect or just lack of alternate places to get a return on your money.

And if Apple is going to give investors back $55bn..where’s it going to go? Not in deposit accounts that’s for sure!

Lest we Forget.