Morning all,

Well, that was a dummy spit from the US markets. Looks like Benny and the Inkjets are going to take their stimulus fix away and they don’t like it. Last night soon to be ex Fed Chief Ben said that the risks to the US economy were fading, this at the same time he was winding back GDP estimates and also inflation estimates. The Fed has three numbers in mind. 6.5% Unemployment.2.5% Inflation and January 2014 when Uncle Ben goes back to Princetown in a blaze of glory having solved the greatest financial crisis of four generations. Of course he is going to leave some poor schmuck to sort out the mess when he goes but his legacy will be safe. And he is a young man. Alan Greenspan is still going strong aged 125.Must be something they put in the water of Fed Chiefs! All the waiting was finally over ,bit like Xmas morning when you unwrap that wonderful looking present only to find out it is a paif of socks wrapped up really fancy!Certainly seemed a surprising reaction to what we already knew…SPI down 52..overdone too.

 

Anyway after a few days of rally we are obviously set for a bit of a decline today. It’s also futures and index expiry so expect some big volumes. Still having bounced off 4650 to 4860 its time to get the sell pad out again. Of course as the market pulls back again there will be opportunities to buy. Now you are all aware that I am still in the buy defensive yield camp..it’s still my view and the banks are going to give up some gains so once again you are going to have a chance to pick some up as they fall. I continue to find the commodity stocks a little underwhelming. Now I know there are far better strategists than me telling you to buy them but I am a little worried about China so remain sceptical. The only positive is the cost cutting and the lower dollar helping them. Trouble is the underlying commodity prices are falling too. Gold got whacked last night as the dollar rose.

 

Expect the worse to happen early and then the buyers will step in ,probably looking at a down 30 type day .However we have had the bounce from oversold levels and now we will slowly move back down again…..Chinese Flash PMI numbers at 11.45am..not sure why they call them flash when clearly they are not that at all!

 

Idea of the Day

 

 

Aussie dollar is struggling big time..lowest level since 2010…so who will win out of this fall, US dollar earners like JHX,CSL,RMD,CPU,QBE,MQG, etc,etc….

 

And as a bonus idea , a few weeks ago I talked about the positives of OSH as an PNG energy play..looks like they are having some success with their Kurdistan project Taza.. it has had continuous oil shows over 250 metre section, covering three reservoir intervals, namely the Jeribe, Dhiban and Euphrates..early days but there is upside aplenty in this one..our ananlyst has a 10 buck price target on this baby…any weakness is an opportunity. Sounds very Grasshopper speak!!

 

“Any weakness is an opportunity Grasshopper”

 

 

 

Things to make me go ,no Melissa Doyle don’t go!!

 

 

1.Spare a thought for the Big Bogan, Nathan Tinkler. I feel for this guy I really do. He had it all and blew it as his creditors have now moved to take control of his biggest asset Whitehaven.It seems such a meteoric fall from the billionaires club. Let’s hope he has some stashed away somewhere.

 

2.Bloody typical, just as my gorgeous daughter heads overseas for her gap year the Aussie carks itself big time. It has fallen to 33-month-low after the plunging more than 2.5 US cents to 92.9 US cents. It was trading at 92.81 US cents just before 8am.

 

3.And this sums up the G8 Summit(does that spell great?)Nothing achieved except a $50m bill for security.Lots of promises and lots of focus on tax avoidance but another talk fest..followed by Obama’s doughnut moment at the Brandenberg gate talking down Nuclear armaments…at least he did not say “Ich bin ein Berliner…” something he learnt from Kennedy.

 

 

 

 

4.Federal Reserve Chairman Ben S. Bernanke said the central bank may start dialing down its unprecedented bond-buying program this year and end it entirely in mid-2014 if the economy finally achieves the sustainable growth the Fed has sought since the recession ended in 2009.

 

Chart of the day courtesy of www.zerohedge.com

US Credit Markets take Bens speech badly!

 

 

And after all the money the Fed has spent the employment situation has hardly moved since 2009…..hope it was worth it..wall Street wins, Main Street ???

 

 

5.ASIC have begun seeking meetings with analysts and their research desk bosses at broking houses who cover Newcrest Mining, as part of its investigation into potential selective briefing by the goldminer. The meetings are the first move by the regulator in what could be a landmark probe into how investor relations teams deal with analysts. Brokers at six banks made downward revisions of their earnings estimates at Newcrest in the days ahead of a major profit downgrade announced to the market on June 7.

6.Fox Sports Australia is cutting costs and restructuring while News Corps’ first day of trading as two listed companies saw investors sell out of the publishing company to gain exposure to the higher-growth Fox assets. Fox Sports is axing TV journalists on its news channel as it taps into News’ newspaper journalists.

7.Responding to a series of asbestos mishandling complaints related to the National Broadband Network construction, Telstra yesterday admitted there were gaps in the training of workers to handle the removal of asbestos fibres and threatened to tear up the supply contracts with its three main rollout contractors if they did not comply with the stringent guidelines for removing it from Telstra’s pits.

8.And talking Zombieland,the Germans are upset that German isn’t the official language of the region. English and French are…seems that they are getting stroppy about this and want the language to match the money given!

 

And finally…….apologies for the blonde joke…hope I am not being blondist

This is the story of the poor dizzy blonde flying in a two-seater airplane with just the pilot. He has a heart attack and dies. She, frantic, calls out a May Day.

“May Day! May Day! Help me! Help me! My pilot had a heart attack and is dead.. 

And I don’t know how to fly. Help me! Please help me!”

She hears a voice over the radio saying:

“This is Air Traffic Control and I have you loud and clear. I will talk you through this and get you back on the ground. I’ve had a lot of experience with this kind of problem.

‘Now, just take a deep breath. Everything will be fine!

Now give me your height and position.”

She says, “I’m 5’4″ and I’m in the front seat.”

“O.K.” says the voice on the radio…. “Repeat after me: Our Father. . Who art in Heaven. . . …”

Have a great day

 Clarence

XXXX