After yesterday’s euphoric reaction to Australia and New Zealand Banking Group (A$31.69, -0.5%) results the market took a well-earned rest. Financials were mixed with Commonwealth Bank of Australia (A$72.95, -0.7%) and National Australia Bank (A$33.95, -0.1%) weaker whilst soon to report Westpac Banking (A$34.06, +0.8%) were a tad firmer as were Insurance Australia Group (A$5.94, +2.1%). Of course Telstra (A$5.03, +1.0%) was stronger again today as its defensive nature continues to shine through. Unfortunately the materials sector took the Chinese PMI badly with BHP Billiton (A$32.17, -1.6%), RIO Tinto (A$55.03, -1.4%) and Newcrest Mining (A$16.45, -2.1%) all looking wobbly again. Some profit taking also in the three W’s Woolworths (A$36.24, -0.5%), Westfield Group (A$11.59, -0.5%) and Wesfarmers (A$42.95, -1.0%).

There are a number of high profile brokers conferences around town this week and SAI Global (A$3.92, +11.0%) presented well enabling some positive sentiment to take hold. Mining services continued their downward spiral with Boart Longyear (A$0.92, -3.7%), Gr Engineering Services (A$0.62, unch), Macmahon (A$0.17, -5.6%), Maca (A$2.22, -4.7%) and Bradken (A$4.99, -2.9%). Unfortunately other miners also were in the spotlight, Evolution Mining (A$0.97, -0.5%), Fortescue Metals Group Ltd (A$3.48, -0.6%), Oz Minerals (A$4.13, -4.0%) and Kingsgate Consolidated (A$2.09, -3.2%) all in the naughty corner. Again.

There is life in the resource market as Pegasus Metals (A$0.205, +95.24%), none intended, mentioned that magic phase of massive Sulphides and whoosh.. off to the races.

Volume was again on the skinny side as the market waits for the FOMC meeting this week and the WBC figures on Friday

Stocks in the News

Following on from the Government announcement of their legacy of Disability Insurance scheme, Myer (A$3.08, -4.0%) has warned that this would affect sales. Really? I would have thought they would have had bigger issues than this.. the rise of internet sales is destroying their business ,this should be more of a concern, online retailer ASOS, the British fashion site is flying nearly four jumbo jets full of clothing into the country each week.

In house stocks G8 Education (A$2.50, +2.9%) pushed higher as did New Standard Energy (A$0.16, +10.3%) whilst Buru Energy (A$1.765, -5.1%) were weaker despite a strong presentation in our office today.

Telstra (A$5.03, +1.0%) has added 600,000 new 4G customers since it announced its half-yearly profits in early February, further cementing its position as the leading player in the crucial 4G market.

The company had grown its 4G customer base from 1.5 million to 2.1 million in less than three months, said Mark Hall, deputy chief financial officer. Just shows their dominance in the mobile space.

Since 2010 the ASX200 has fallen on average 5.8% in May.

China’s manufacturing expanded at a weaker pace in April in a sign that the nation’s slowdown in economic growth is extending into the second quarter. The Purchasing Managers’ Index was at 50.6, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compared with the 50.7 median forecast of 31 analysts in a Bloomberg News survey and a March reading of 50.9. Readings above 50 signal expansion.

Australia’s embryonic housing market recovery has stumbled with home values falling in most states last month, new figures show. Dwelling values contracted by 0.5 per cent over the month of April after posting a solid 2.8 per cent gain over the first three months of 2013, RP Data figures show.

Alacer Gold Corp. (A$2.79, -0.4%) has revealed today that its Australian operations failed to break even during the March quarter, with the company relying on its mine in Turkey to record a small profit for the period.

Tomorrows News Today

Still a little confused about the Apple Bond sale. Ibond is raising $17bn for a bond to allow Apple to pay shareholders back the cash that they have anyway. Not sure I would be that keen to buy a 30 year bond yielding 4% in a company that may not even be around in 10 years let alone 30!But there you go. Still Rwandan debt is trading at 6% .makes TLS look pretty attractive if you ask me!

And Yahoo has paid its new CEO $36m for 6 months work. And she was on maternity leave for some of that!

Clarence

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