Morning all,

Well, going to be a lacklustre end to a Budget and currency driven week. Abbotts reply last night was pretty uninspiring from my desk this morning although if you were a Canberra civil servant I would be changing my vote to labour! Think Tony is targeting 14,000 Public Servants to go!!!Ouch!!This will hurt Jervis bay holiday homes!!Anyway this is all just noise and the big issue is the US. Last night we got some pretty dismal figures from the US plus of course another Fed Chief was wheeled out to throw the sponge on the QEIII ….They are trying to soften the market up without spooking it to the very real possibility that the big free money prop is going to be taken away sooner rather than later. Stimulus packages are what is driving markets higher..we saw yesterday that the Japanese GDP rose 3.5% for the year with the massive ‘Abenomic’ money that is being pumped into the system…the Nikkei has rallied 67% in the last six months…now that’s a bubble if ever I saw one..so with the US at all-time highs ,Japan now in favour something must be sold to pay for these bets..and yes you guessed it the Aussie Dollar, Aussie equities and Commodities especially Gold. In the case of Gold it is extremely aggressive as it does not pay any yield and we all know what the World needs now is Yield sweet yield, that’s the only think that there’s just too little of.

Expect today to be a wary start pre the 11am dump and some bargain hunting in resources with some profit taking in Industrials and Finance stocks as traders square up for the weekend. I still believe that the next six months are going to be a sideways to down movement with the best gains been made for a while…Banks have been the front runners but as they go ex-dividend the impetus to own them diminishes…and resources, well it will take a brave man to go all in on these puppies!!Probably see some buying for week end but all depends on the 11am sledge!!!If it doesn’t happen then we will gain a bit of confidence.I am going to be brave and call the market up 5!!!!But the market to slip next week again..my target is back to 5000 in the next few months..

Idea of the Day

For those of you interested in the Telco/Media space we have a 1 day conference on the 28^th May in our Sydney Office which features presentations from QFX,VOC,EPD,OKN,BGL,SMX,NWT and NTC.

Looks like it will be a good day..well worth popping in for a look at some of these….BGL is one I follow ,and NTC is in an interesting space in Machine 2 Machine talking…love to see any clients or potential clients that want to come in…just let me know if you are coming…

Things to make me go Eurovision!!

1.Eurovision this weekend…going to be lots of fun..I would suggest a combo of SBS,Twitter and Facebook to truly appreciate this unique cultural event..

2.Say it ain’t so but ‘Exit it like Beckham’….the World’s most high profile footballer has announced his retirement…following swiftly on the heels of Sir Alex..coincidence I think not…love to steal his limelight!!

3.Gina appears on a video saying the Government should not be treating mining like an ATM…by video…

4.Brockman looks to have thrown a spanner in FMG attempts to sell some of its rail infrastructure by asking the WA Government for access to the rail infrastructure using a 13 year old law they have dug up…should be some good fees there for lawyers!!

5.Few things from the US…White House scandals as the head of the IRS resigns, US housing figures pretty ordinary as Jobless claims rise..Wal Mart misses expectations and Dell doing it tough…everyone wants tablets and phones..Buffets Berkshire Hathaway is downgraded to AAAAAAAA+++++++ as the ratings agencies worry about succession planning….don’t they know Warren will live forever!!Der!

6.Bank of Queensland has raised $900 million by issuing bonds to investors, almost double the amount originally intended. BoQ set out to raise $500 million by offering mortgage-backed bonds, known as REDS, to investors.

7.Billabong International has denied the departure of several more key staff is a result of the instability of the troubled company among protracted takeover negotiations. After Billabong Girls VP of Design Mandy Fry and Sector 9 president Steve Lake have resigned from Billabong this week.

8.Metcash Agrees to acquire Australian Truck & Auto Parts Group for A$84m.

9.Wesfarmers is facing increasing pressure to return a growing stockpile of cash to investors, with estimates the conglomerate could be carrying as much as $3.6 billion of excess capital by the end of next year….explains why the shareprice is so high!!!

10.Funny but it seems that we feel kinda weird that the Aussie dollar has fallen 5% in a short space of time…seems we don’t like being judged by the markets as a country..weird..we complain when the Aussie is too high yet the media is full of Aussie Dollar collapsing style stories with woe and disaster writ large…It’s a good thing..look what the Japanese economy has done with its lower yen..of course they have a manufacturing base…ours left the country some time ago with Elvis..too little too late RBA!!!!But may help….

And finally…………….Just one more Euro Classic

Have a great weekend…..shame no Jedward this year!

Clarence

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