Morning all,

Last night, the Dow fell for the first time in 6 months on a Tuesday as the Monday front running took the wind out of the sails. Comments from another Fed chief on when QEIII will end also weighed a little.Looking at the ISM data out last week the US is actually in a recession so things aren’t that good there despite the Dow at record highs. So where to for our market. Well yesterday was a bit disappointing as the RBA stayed their hand.Uncle Glenn reckons he has done enough…really?..this guy has been so far behind the curve it’s not funny…the RBA have missed it again..remember when they were the only ones raising rates as we went into the GFC!!!Then they predicted the mining boom was going to last longer than     …got that wrong and now again they show they are missing the point…you only have to talk to industry and the man on the Clapham omnibus to know things are pretty dire out there in places…the great industrial revival is hard to imagine given there is no industry left anymore…it’s not like Ford will reverse their decision if the Aussie dollar gets to 90 cents..it’s too late..you missed it Glenn!!

So expect a small down day today with Iron Ore stocks slightly better, Gold stocks weaker after a 1% fall in Gold and Copper stocks may be a touch better after rises overnight…Banks will continue to mill around as the great see saw of hedge fund selling and income investor buying continues to play out.

I am still expecting it to be a long and unfruitful next quarter for markets as we head into the election in Australia and in Germany too.I also think the US marlet will start to focus more and more on the end of money printing from Benny and the Inkjets…not sure it will be an orderly retreat either…everyone is so bullish!!

Idea of the Day

Now I have banged on about this forever but the yield trade is not over ..the RBA will have to cut again and deposit rates are falling….the Aussie banks are well managed conservative high income stocks that are the bedrock of any portfolio…if you don’t own any ,you should change that over the next few months!!!All gone Ex div so no rush but pick a price..stick to it and accumulate on the back foot..once you have some look at selling calls over time to increase your income still further..its easy to do and can be lucrative especially when they are going sideways!!

And don’t forget as June 30 approaches tax loss selling will accelerate!

Things to make me go Socceroos!!!!!!

1.Good result from the Socceroos last night..nearly much better until the 90^th minute and a penalty…interesting to watch how the Japanese play…sneaky round the box!!And in Cricket news not sure NINE will get too much value if the Australian team can’t lift their game..65 all out..great way to celebrate 20 years since Shane Warne bowled the impossible ball..bowled Shane! Bring on the Ashes!!

2.Apple loses patent battle and so is not allowed to import some older iphones into the US..and the hits just keep on coming…still amazed anyone would buy 30 year binds in a tech company!!!

3.Iron Ore rallied over 4 bucks last night…way to go Gary!

4.Billiagone..what can I say..after every man and his dog has looked at the books they have all concluded the same thing…wipeout!! It’s not looking good for the once mighty surf company…race against time before the hooter sounds…this has now become a text book example of how not to run a company…directors should be sued! Good to see Deutsche changing their recommendation to sell!!

5.Investor day tomorrow at FXJ..should be good..still like this one on the basis of the relative valuations of CRZ,REA and SEK..either they are too high or FXJ is too low…suspect both actually!

6.It’s not all wind backs and expansions on hold as Glencore Xstrata has passed the final hurdle for an expansion of its McArthur River zinc and lead mine in the Northern Territory, securing local government approval for a $US360 million ($370m) development that will more than double the operation’s processing capacity.

7.GDP numbers today..now lets not get too excited as these are up til March..it’s now June and things are changing rapidly…these are looking back not forward numbers…but still expect some disappoint ment ..but think in the last three months the mining sector has got a lot worse!!

8.Watched Game of Thrones last night…that was a surprise…didn’t see that coming…Billy Idol has renamed his hit White Wedding though!!! Maybe it was all a dream like Bobby’s one in Dallas all those years ago!!

9. “The latest US ISM reading came in at 49. Any reading below 50 is considered recessionary. And an ISM of 49 is the worst in four years. The Fed, as usual, is oblivious to this. Bernanke claims we’re going to see a 3% GDP growth in 2014. We haven’t seen annual GDP growth of 3% since Bernanke took office. And he and the Fed have been claiming that a recovery was just around the corner for five years now… that’s HALF a business cycle.” Zerohedge.com

10.Good news from Spain as they await the influx of UK tourists all auditioning for Geordie Shores.. The number of registered job seekers in Spain fell in May as more firms hired people on a temporary basis ahead of the peak summer season. Official statistics showed 4.89 million people were registered as jobless, the lowest level in six months.

11.And another day another set of downgrades yesterday with both BBG and SMX copping it sweet and fessing up to their sins!!seems to be a lot of these recently…

And finally……………

A firefighter was working on the engine outside the Station, when he noticed a little girl nearby in a little red wagon with little ladders hung off the sides and a garden hose tightly coiled in the middle.

The girl was wearing a firefighter’s helmet.

The wagon was being pulled by her dog and her cat.

The firefighter walked over to take a closer look.

‘That sure is a nice fire truck,’ the firefighter said with admiration.

‘Thanks,’ the girl replied. The firefighter looked a little closer. The girl had tied the wagon to her dog’s collar and to the cat’s testicles.

‘Little partner,’ the firefighter said, ‘I don’t want to tell you how to run your rig, but if you were to tie that rope around the cat’s collar, I think you could go faster. ‘

The little girl replied thoughtfully, ‘You’re probably right, but then I wouldn’t have a siren.’

Have a great day and thanks for the donations ..keep ‘em coming ..love to get to 1000 bucks!!!

 

Clarence

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