Another day with more red on the screens than the “Rains of Castamere”. We are now only up around 80 odd points for the year. Where did it all go!! Closing around its lows at 4737.Thats a big 190 points for the week!

The big game in town is currency. When the big boys come out to play this is where they do their best work. Equities are just collateral damage along the way. From Tokyo to New York, from London to Sydney, it’s all about currency wars!

The slightly positive lead from the US was completely nullified as yet another Newcrest Mining (A$12.35, -7.6%) disaster hit  as they wrote off close to $6bn in asset write downs, cancelled the dividend, closed Brisbane and no Tim Tams for a month. All positive bounce thoughts were gone and we opened in deep red territory and tried valiantly to rally especially in the banks. Much sold Westpac Banking (A$27.60, -0.4%) managed to buck the trend but others succumbed. WBC is now down 20% from its high! Other financials were whacked especially QBE Insurance Group (A$14.69, -3.5%) which gave up the ghost today as did Perpetual (A$38.92, -1.0%).

Resources were also under the kosh today with BHP Billiton (A$33.09, -2.0%) slammed followed by RIO Tinto (A$53.20, -1.6%) and Fortescue Metals Group Ltd (A$3.36, -2.0%). Iluka Resources (A$10.34, -5.4%) also had a shocker as the fall in the Aussie dollar is failing to inspire any buying in this sector. Mining services continue to be the canary in the coal mine and were all softer today again. Boart Longyear (A$0.66, -7.0%), Coffey International (A$0.14, -3.4%), Macmahon (A$0.15, -3.2%), Mastermyne Group (A$0.70, -2.8%), Als (A$9.04, -4.1%). Healthcare was a slight green spot with Ansell (A$18.04, +2.2%) bouncing hard and Ramsay Health Care (A$34.05, +2.2%) under the microscope. In Telco land Telstra (A$4.63, +0.7%) showed some resilience but in the award for biggest move Nextdc (A$2.62, +13.4%) were the stand out. Defensives were mixed with Wesfarmers (A$37.81, -0.4%) and Woolworths (A$32.00, -0.2%) almost unchanged whilst some positives in energy stocks like Origin Energy (A$13.15, +1.0%) but Orica (A$20.77, -3.8%) suffered following a presentation this week.

Media stocks were in the headlights today with APN News & Media (A$0.265, -1.9%), Fairfax Media (A$0.55, -6.8%), Amalgamated (A$8.08, -3.6%), Village Roadshow (A$5.01, -2.1%) and Southern Cross Media Group (A$1.34, -1.5%) all hit.

Stocks showing a clean pair of Jimmy Choos today included Energy World  Ltd (A$0.43, +7.5%),Magellan Financial Group (A$9.02, +3.1%), Virgin Australia (A$0.465, +4.5%) and Macquarie Atlas Roads Group (A$1.88, +2.7%) whilst those with one heel stuck down a drain were Linc Energy Ltd (A$1.365, -7.5%), REA Group Ltd (A$27.70, -6.2%), Fairfax Media (A$0.55, -6.8%), Atlas Iron (A$0.78, -6.0%), Bluescope Steel (A$4.55, -4.2%) and Orica (A$20.77, -3.8%).

Volume was light on pre the long weekend and US payroll numbers tonight.

Stocks in the News

Newcrest Mining (A$12.35, -7.6%) was the big news today as it conducted a business review. Not much joy for shareholders again with a huge writedown. Looks like Lihir was a huge mistake! Dividend gone, expansion gone, in fact you name it, it’s gone.. so is the share price which touched 11.40 before rebounding slightly as the shorts covered. When they have finished though there is no reason to be there. For a $10bn company to write off $6bn is pretty good going!

G8 Education (A$2.37, +4.4%) found some friends in the sandpit today with news that it will be included in the ASX 200 from June 21st.However Linc Energy Ltd (A$1.365, -7.5%) which is similarly affected fell substantially. Go figure! And REA Group Ltd (A$27.70, -6.2%) was celebrating its inclusion in the index too by having the sword taken to it.

Nextdc (A$2.62, +13.4%) were a stunning winner today as they were awarded a $60 m data centre contract over the next five years. Way to go.

Asian equities fell, with the regional benchmark index poised for the largest weekly drop in a year, as the yen’s biggest surge in three years weighed on Japanese shares and investors awaited a U.S. jobs report.

Tomorrow’s New Today

All eyes will be on the US tonight as the Non-Farm Payrolls number comes out. I am starting to feel that bad news is bad and good news is bad.

The dollar index fell nearly 2 per cent while the US currency at one point dipped 3 per cent against Japan’s yen to move below Y96. “This is reminiscent of the 2008 crisis and well off the normal charts,” said one FX trader. The yen has its strongest day in 3 years as Finance Minister Aso (not sure how that is pronounced!) says he won’t intervene. Not sure they really know what they are doing over there.. looks like they are using the Australian Labour party as their role model.. and go Mark Latham.

The ECB now expects the euro area to contract by 0.6% this year, having earlier predicted a GDP fall of 0.5%.Of course all this while Super Mario is saying everything is going to be alright.

First there was the LIEbor scandal with interest rates being fixed now something worse. Authorities in Canada have charged the food giants Nestle and Mars, together with a network of independent wholesale distributors, in an alleged conspiracy to fix prices of chocolates. Is nothing sacred anymore!

Catch me on Sky Biz this afternoon at 5.30 for a weekly round-up of all the fun!

 

Have a great weekend…no monday blog!!

 

Clarence

 

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