Today’s Action

A cautious day in front of tonight’s Federal Swan song. Wayne has been putting the finishing touches to his legacy and tonight we will see the deficit in all its glory. Let’s hope the ratings agencies do not get too spooked by the number and start to warn on our AAA rating. The market closed slightly positive, buoyed once again by financials such as QBE Insurance Group (A$15.40, +2.3%) and Macquarie Group (A$46.37, +2.0%) along with Commonwealth Bank of Australia (A$72.09, +1.3%), Suncorp Group (A$12.52, -0.2%) and AMP (A$5.63, +0.5%). However the rest of the banks were a tad weaker. News today that home loan approvals jumped the most in four years was also music to my long time favourite Mortgage Choice (A$2.36, +3.1%) which had another good day. Industrials also had a positive day led by Brambles (A$9.37, +3.1%) which has been pushing higher in the last few days and Aurizon (A$4.41, +1.6%), Sydney Airport (A$3.65, +2.0%), Amcor (A$10.28, +1.8%) and News (A$33.74, +0.8%). Big losers today were Newcrest Mining (A$16.33, -2.4%) (nothing new here) and Fortescue Metals Group Ltd (A$3.74, -2.3%) in resources whilst BHP Billiton (A$34.67, +0.3%) and RIO Tinto (A$57.55, -0.1%) were steady.

In media stocks, Fairfax Media (A$0.66, +2.3%) enjoyed themselves today whilst Ten Network (A$0.315, -1.6%) Seven West Media (A$2.38, -0.8%) and APN News & Media (A$0.385, +2.7%) eased a little. Energy stocks were weaker led by Santos (A$12.73, -0.9%) and Origin Energy (A$12.64, -0.4%) whilst in smaller caps Buru Energy (A$1.695, -3.7%), Roc Oil Company (A$0.50, -4.8%) and Nexus Energy (A$0.135, unch) fell away.

US dollar earners remain in focus as the currency continues to come under some pressure under 1.00. It has been a long time coming but finally the likes of James Hardie Industries PLC (A$10.73, +0.5%)

The CC’s did well today with US earnings helping stocks like Computershare (A$10.69, +2.8%), Cochlear (A$72.63, +2.0%) and a ten year high for CSL (A$63.20, +1.2%).

Primary Health Care (A$5.03, -0.8%) shareholders were pleased with CEO Edmund Bateman’s decision to give half his shares away to charity and to his family. What a nice man. Not all CEO’s are.

Big winners today included Cabcharge Australia (A$5.00, +4.4%), Duluxgroup (A$4.79, +4.4%) and Austbrokers (A$10.82, +5.6%) whilst hiding out at ‘Crufts ‘were Zimplats Holdings (A$9.00, -10%), Oz Minerals (A$4.21, -5.2%), Beach Energy (A$1.285, -3.7%) and Sirius Resources NL (A$2.70, -2.53%).

Volume was again on the low side but hardly unexpected given the budget tonight.

Stocks in the news

In house stocks, Lynas (A$0.63, -8.0%) gave back some of their post Malaysian election gains today.

Amazingly some good news in Mining services today, with Macmahon (A$0.22, +25.7%) providing an update which proved there is life in the old dog yet! Macmahon in an update on Tuesday said the sale of its construction arm to Leighton Holdings had removed any uncertainty and risk over the company.

AWE (A$1.24, -0.4%) has announced some good news with its latest appraisal well Lengo 2 in offshore Indonesia which has recorded a good flow rate from a second Drill Stem Test (DST) of around ~21mmcf/d.

Macquarie Group (A$46.37, +2.0%) has become the latest bank to issue hybrid shares, outlining plans on Tuesday to raise up to $400 million in fresh funds to help boost its balance sheet. The notes will be issued with a face value of $100 each and provide investors with a semi annual distribution rate calculated as the 180-day Bank Bill Swap Rate plus a fixed margin.

The margin is expected to be in the range of 4.0 per cent to 4.2 per cent to be determined under the book build. And I thought they had more cash than they knew what to do with it!

Owner-occupier home loan approvals have posted the strongest jump in four years, following a series of interest rate cuts. Personal and business financing are also showing signs of growth, but home loan approvals are experiencing the strongest revival, rising by 5.8 per cent in March to cap off a 9.3 per cent increase since the start of 2013.

Today it is Chandler Macleod Group (A$0.50, -12.3%) the recruitment outfit’s turn to confess to their sins. Signs of softness in the jobs market and profit downgraded to between $17-19m with multiple reasons for the news.

Samsung says it has developed technology that could sit “at the core of 5G” – the successor to the 4G mobile-communications standard. The company says its equipment is capable of transmitting data at more than 1Gbps across a distance of up to 2km.Vodafone is still working on its 1G network.

Intrepid Mines (A$0.27, +17.4%) urged shareholders to reject a bid to oust the board on Tuesday but offered no new information on how it plans to try to win back an 80 per cent interest in a huge copper and gold prospect in Indonesia.

Tomorrow’s News Today

Bring in Swan and Wong! You should be able to bet on the numbers as they unfold with Tom Waterhouse.

Tata Steel has written down its Zombieland operations by $1.6bn, much more than expected and cuts 900 jobs in the UK.

China’s stocks fell the most in three weeks after a leading US investment bank cut its growth outlook for the nation’s economy and concern grew the government is introducing more property restrictions to limit gains in housing prices.

Some big valuations creeping into internet stocks…REA Group Ltd (A$33.10, +0.1%) p/e around 40, sales of around $350mMarket Cap $4.5bn.Carsales.Com (A$10.04, +1.2%) p/e 30 Mkt Cap $2.4bn and Seek (A$10.50, -0.9%) p/e 26 and Mkt Cap $3.6bn…Fairfax Media (A$0.66, +2.3%) mkt cap $1.6bn… Just saying that’s all!

And only in France, where President Hollande is hated by most already, now he is going to put a tax on Smartphones to pay for French Culture like art, cinema,cheese and music.4% on a Smartphone, really?