Market Wrap

A rare day indeed when there were no downgrades by anyone. Good lead from Wall Street and an improving dollar helped propel the market towards its 5 year high. The battered Aussie Dollar also found some friends and the ASX200 was happy to go higher although well off its intra-days highs as the day wore on. Feels like the 5200 level is magnetic at the moment. Like a moth to the flame! Once again though volumes were sporadic and unexciting but all sectors apart from the Golds had a good day.

Financials as usual were the big winners with Commonwealth Bank of Australia (A$73.49, +0.4%) hitting a Multi-year high dragging Westpac Banking (A$31.79, +1.4%), National Australia Bank (A$33.37, +0.8%) and Australia and New Zealand Banking Group (A$30.23, -0.1%) behind. Other financials were also strong as QBE Insurance Group (A$15.68, +1.8%), AMP (A$5.61, +1.3%), Insurance Australia Group (A$5.71, +1.2%), Macquarie Group (A$45.64, +2.4%) and Suncorp Group (A$12.64, +2.2%) all had their day out. The big miners were also in demand although RIO Tinto (A$55.42, +0.2%) tempered those gains whilst BHP Billiton (A$34.79, +1.1%) seemed to be a happy vegemite today. Newcrest Mining (A$14.56, -0.8%) of course were weaker. Good to be able to depend on some things in life! The rest of the golds were struggling with Evolution Mining (A$0.79, -10.2%), Silver Lake Resources (A$0.71, -13.9%), Kingsgate Consolidated (A$1.465, -6.4%), Beadell Resources (A$0.585, -6.4%), St Barbara (A$0.63, -1.6%) all getting whacked again. Seems the easiest trade is just keep selling these gold stocks.

In industrials Telstra (A$5.10, +0.4%) missed out on the love today but suspect it won’t last long. They look like they are going to push higher especially when other stocks fall! Other industrials like Brambles (A$9.22, +0.5%), Seek (A$10.79, -0.1%),UGL (A$7.35, -4.9%), Qube (A$1.85, +0.5%) and Amcor (A$10.08, +1.0%) pushed ahead. Energy stocks were also better with Santos (A$13.14, +1.6%), Origin Energy (A$13.08, +1.2%) and Caltex Australia (A$23.49, +1.3%) all in front.

It was all quiet on the media front but building stocks were benefitting from the optimism on recovery holes, CSR (A$2.05, +1.0%), Boral (A$4.70, +3.1%) and James Hardie Industries PLC (A$10.59, -2.2%) all to the good. Goodman Fielder (A$0.73, unch) also had a good day on some large crossings done around 72/72.5.Nearly 100m shares traded in about a dozen lines.

Some bargain hunting starting to appear in mining services but it is a long way back. Boart Longyear (A$0.785, -1.3%), Coffey International (A$0.155, +3.3%) and Macmahon (A$0.195, unch) all picking up a few pennies but others were just dreadful again, Cardno (A$5.71, -2.2%), Bradken (A$4.82, -0.8%) and Mastermyne Group (A$0.95, -5.0%) .

The big winners today were Energy World Ltd (A$0.445, +7.2%), Bluescope Steel (A$5.37, +4.9%), Myer (A$2.75, +3.0%), InvoCare (A$12.30, +3.5%) and Xero (A$11.58, +3.39%) while in the Canine Club were Perseus Mining (A$1.05, -7.9%) and Pacific Brands (A$0.725, -7.6%).

Stocks in the News

In house stocks Kina Petroleum (A$0.415, +2.5%) issued a shareholder update and the stock rallied a little increasing its gains following the farm out update last week.

Leighton (A$18.67, +3.7%) were higher today following their Chairman’s address. Not sure giving it out is that helpful, but at least shareholders know where he lives if he stuffs it up again!

Macquarie Group (A$45.64, +2.4%) were overwhelmed with demand for their latest hybrid offer, in fact they even raised how much they issued to just shy of $600m as the hunt for sustainable reliable yield continues unabated.

APN News & Media (A$0.335, unch) has made a new board appointment with Anne Templeman-Jones joining the company.

AWE (A$1.23, +3.4%) announced upgrades to their 2P reserves to over 100m barrels with potential for significant growth. All good but the price underwhelmed.

Silver plunged to the lowest level since September 2010, sending its ratio to gold to the highest in 33 months, while bullion extended the longest slump in four years as investment holdings contracted and stocks rallied.

Tomorrow’s News Today

Asian stocks heading for their highest close in five years! But in China, Prices of imported cars fell the most in five months, adding to signs that demand for luxury products is slowing because of a government campaign to rein in lavish spending by public servants. Average prices of imported cars in April fell 3.4 % from a year earlier.

In internet land Yahoo has bought fledgling business tumblr for over $1bn!!! Serious? Not bad for a company who had revenue of around $13m last year…better than Lotto!!

And on net stocks in general there is a serious backlash starting from Governments fed up with receiving no tax from multi nationals like Google, Apple and Amazon. It was revealed that Amazon paid only 4.5% on its European profits. I didn’t know they made any profits! Google generates around £3.2 billion ($4.7 billion) in Britain a year but paid only £6 million in British corporation tax in 2011. The online search giant routes all of its European advertising sales through its offices in Ireland, where businesses enjoy relatively low tax.

On Wednesday we will have Benny and the Inkjets talking at the Senate Economic Committee meeting. Watch for signs that QEIII is being would back. And here on Wednesday we get minutes (will feel like hours) from the RBA’s May interest rate meeting, Westpac consumer confidence for May and DEWR internet skilled vacancies for April. We also get Q3 sales for Myer.

And as Unions rally in Italy and with satisfaction at the EU at all-time lows around Europe, the geniuses have decided is to ban the use of refillable bottles and dipping bowls of olive oil at restaurant tables from next year. Apparently Olive Oil fraud is rife and this will put an end to it!!