Morning all,

Well it’s probably going to be off to the races again today after yesterday’s 50 point run. Now we are at 5200 it looks like the Central Bank money is just chasing equities higher and higher..now the RBA has joined in its probably game on. All the ducks lined up again last night with Commodities better, US markets better, NWS figures better than expected and NAB announcing a good number and an increase in dividends, just!….The NAB figures were not as robust as others so may see some disappointment in them but these banks are strong as ten men and show no signs of problems emerging..in fact with rates now falling ,bad debts will also fall as long as unemployment stays benign..will find out more today.

Resources may continue their outperformance as the rotation continues..it is still pretty early days in this trade and it is still tentative but it’s happening for sure…hedge funds who have aggressively shorted the resource stocks to buy banks are struggling to find stock and have to push them higher……that’s not to say that the banks are a sell, they are not, but that resources are a buy…of course if you haven’t the funds to do both I would stay with the banks for safety and yield…if you have money sitting in a deposit account then you should probably think about the falling rates and what to do with that money…at the moment it seems that the markets are happy to push higher as the free money continues to wash around the World….Every Central Bank is doing it…hard to fight the Fed, the ECB, The BOJ and the RBA..just China left to go..although yesterday’s export numbers suggest a rebounding economy..if you believe the numbers that is!!!!

Expect a 30 up day today as the ASX 200 breaks out of its range…certainly there appears little negative news out there at the moment to slow momentum…

Idea of the Day

Well not getting much luck with my CCL call…stock continues to stagnate after the AGM the other day…maybe it’s just going to take a bit longer…but the rotation to resources will continue…Big ones to benefit as usual first.

If you are looking at covering a large range of stocks effectively and cheaply then the new ETFs are a good way to go..yesterday we had a presentation from Russell Investments regarding their High Yield Aussie share ETF..It does offer good yield and good comparison to buying the index …and does track the ASX 300 pretty well..so quick easy cheap and gives you goo exposure with a high yield of around 5.27% for the year end Dec 12…plus franking brings it up to 6.97%…in fact ETFs are available over a lot of strategies including exposure to the US S&P 500 and China and even Zombieland for the really optimistic..although lets face it the level of stock markets seems to have no regard to the underlying economy either now or in a years time!!

Things that make me go mmmm!

1.Chelsea draw with Spurs..no Champions league spot just yet!!

2.The whole ‘Billagone’ thing is a complete joke…who in their right mind gives the bidder so much time to examine the books and adjust their price meanwhile the company is distracted ,unfocussed and looking for the senior executive parachutes everywhere.This cannot be in the best interests of shareholders..the bidder can just keep seeking extensions until they get the price down to nothing…One large shareholder has got the proverbial and sold down their 6% holding already…this is going to be a text book example in MBA schools for years to come but not for the right reasons I am afraid..absolute joke!

3.National Australia Bank Ltd., the country’s largest lender by assets, boosted first-half cash profit by 3.1 % on higher earnings from personal banking and trading income. Cash profit, which excludes one-time items, climbed to

A$2.92 billion ($2.97 billion) in the six months ended March 31 from A$2.83 billion a year earlier.As usual NAB are the worse of the banks but then we know that..they have the UK problem child to contend with and have fallen behind in Australia too…nothing changes really for NAB..my order of preference remains..WBC,CBA,NAB,ANZ.

4.Everyone is now predicting the Aussie Dollar to push down…better late than never I guess….

5.Big ‘Nath’ and his wife look to be in trouble again…this has been a wild ride for these guys…now being sued for bankruptcy by a corporate adviser…tough break.

6.RIO and STO AGM today plus the ABS Labour force data at 11.30am.

7.From the November lows, the S&P 500 has gained an impressive 21.5%. Today was the highest average trade size in S&P futures of the year (on sub-average volume).

8. Coca-Cola Amatil the world’s most valuable brand, is losing its fizz as low-cost rivals and retailers’ private-label brands increase their share of soft drink sales. Private-label soft drink and bottled water sales rose 19 per cent last year, almost four times the growth in the non-alcoholic beverages category, and account for 10 to 15 per cent of volumes in supermarkets…that may be so but the US stock continues to move higher…so maybe it’s an Aussie thing.

9.News Corp: reported net income of $US2.85 billion in the third quarter of the 2012-13 financial year, up from $US937 million in the prior corresponding period.

10. U.S. stock investors may reap unusually high returns during the next five years thanks to record-low interest rates on government bonds, according to researchers at the Federal Reserve Bank of New York. A survey of 29 models for the equity risk premium — the expected future return of stocks over the risk-free rate offered by Treasuries — shows “we will enjoy historically high excess returns for the S&P 500 for the next five years.”

11.And from those nice people at the NRA in the US they have introduced a new range of mannequin targets..its called the Ex..appaprently it bleeds when you shoot it!!!They also have a line of Zombie targets including one that looks like Obama…how do these guys have any credibility!!

And finally……

 

Following on from yesterday’s wonderful golf quotes, we have some commentators gaffs from other sports…

 

I spent a lot of money on booze, birds and fast cars. The rest I just squandered.
George Best

An inch or two either side of the post and that would have been a goal.
Dave Bassett, Sky Sports

Ardiles strokes the ball like it is part of his own anatomy.
Jimmy Magee, RTE

Gary always weighed up his options, especially when he had no choice.
Kevin Keegan, Radio 5 live

This is really a lovely horse, I once rode her mother.
Ted Walsh ( Horse Racing Commentator)

I would not say he ( David Ginola) is the best left winger in the Premiership, but there are none better.
Ron Atkinson

He dribbles a lot and the opposition don’t like it – you can see it all over their faces.
Ron Atkinson

 

Have a good day

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