Hell hath no fury like a market scorned. As if it wasn’t enough for Uncle Ben to tell Wall Street that one day he will take away their toys, China chipped in with a (not so ) flash PMI number at 48.3.So all the good work the market had done evaporated in a puff of futures expiry and we sank like the Titantic. Not a great performance and the only areas that saved the sword were high US dollar earners like Computershare (A$10.58, +2.0%), News (A$30.90, +1.2%), Aristocrat Leisure (A$4.20, +3.4%) and QBE Insurance Group (A$16.18, +5.2%). The continued demise of the poor Aussie dollar is having some serious collateral damage in the already fragile feel good factor amongst investors. After opening down 20 odd, it soon took to the task of selling off with maximum enthusiasm which only increased after the Chinese number. Having been down around 120 for a while it tried to rally but its heart wasn’t in it and managed only a slight bounce to close down 103 around 4759 .Business gave up long ago and watches with total bemusement the complete fiasco that is Canberra. Not just the Labour party, but all of them. If there was a party called “none of the above it” would romp in! Probably the safest investment is backing the Coalition to win at 1.10.10% return in three months!

So to the market. There was more red on the screen than the day Moses looked over the sea and wondered how are we going to get over that. The banks suffered the most with Westpac Banking (A$28.16, -3.7%) the worse but closely followed by Commonwealth Bank of Australia (A$66.26, -3.1%), National Australia Bank (A$29.20, -2.8%) and Australia and New Zealand Banking Group (A$27.65, -2.5%). What the Lord giveth eh? Next up in the land of the red blob was BHP Billiton (A$32.15, -2.5%), RIO Tinto (A$52.60, -3.3%), Iluka Resources (A$9.96, -5.1%) and Telstra (A$4.58, -1.5%). Financials were nasty too with AMP (A$4.93, -3.3%), Suncorp Group (A$12.21, -1.9%) and Insurance Australia Group (A$5.43, -2.9%) bashed. Energy stocks were also hit with Caltex Australia (A$20.98, -3.1%) the worse but followed by Santos (A$12.62, -1.4%),Oil Search (A$7.89, -1.4%) and Woodside Petroleum (A$35.13, -1.5%). Defensives were ambushed too by the PMI with Woolworths (A$32.00, -1.8%), Wesfarmers (A$38.63, -0.9%) and Westfield Group (A$11.26, -1.0%) suffering.

Gold and other commodity stocks were back in the cross-hairs with Kingsgate Consolidated (A$1.525, -7.6%), Silver Lake Resources (A$0.82, -3.0%), Newcrest Mining (A$10.75, -3.6%), Evolution Mining (A$0.69, -4.8%), Oz Minerals (A$4.09, -1.7%) and Regis Resources (A$3.38, -5.6%) smashed. Healthcare was one of the few bright spots with Sonic Healthcare (A$14.39, +1.1%) and Ramsay Health Care (A$35.38, +0.2%) in the green.

Winners and grinners today were Domino’s Pizza Enterprises (A$12.50, +2.5%), Aristocrat Leisure (A$4.20, +3.4%), Fisher & Paykel Healthcare (A$2.89, +2.8%), all the Newscorp stable and Computershare (A$10.58, +2.0%) whilst in the dogs are barking camp, Panaust (A$2.07, -7.6%), Independence Group NL (A$2.82, -7.8%), Sirtex Medical (A$11.80, -7.0%), Lynas (A$0.405, -5.8%), Regis Resources (A$3.38, -5.6%) and Leighton (A$14.94, -7.7%)

Volume was better but still skinny considering we had futures expiry! The reality is though at the moment is all about the currency.

Stocks in the News

Fortescue Metals Group Ltd (A$3.14, -6.5%) announced that it will miss its iron ore production target for the 2013 financial year, and has pushed back the timing of a sale of its infrastructure assets. In a statement to the market today, Fortescue said production for the year to June 30 would fall as much as 4.75 per cent below the original guidance. Rather than producing between 82 and 84 million tonnes, the company now expects to produce between 80 and 82 million tonnes.

Helpful for Sydney Airport (A$3.44, -1.1%) was news today that a growing influx of travellers from Asia are flying into Sydney, with Chinese and Singaporean visitor numbers surging during May. Chinese visitor numbers surged by 29.4 per cent in May while those from Singapore increased by 40.4 per cent, compared with the same period last year. The visitors kept coming from other parts of Asia in May, with Japanese arrivals rising by 11.2 per cent, followed by a 10.8 per cent increase from both the Philippines and Indonesia.

Intrepid Mines (A$0.215, -6.5%) today announced that the incumbent board had the backing of shareholders to continue its fight for its right to party .At stake is the $5bn Copper project in Java.

Another day another Mining services downgrade as Emeco (A$0.30, -20.0%) fessed up that things were “Challenging”. That’s code for completely stuffed. It told the sharemarket this morning it now expects to post a year to June net profit of $35-36 million, which is significantly short of the $40-44 million profit flagged as recently as April. It blamed ongoing softness in demand in Australia, along with the prospect of at best delays to payment for some of its work done in Indonesia. Another board and management who believed that things would last forever. They never do! Ask Nathan!

In house stocks today the weakness was back for Buru Energy (A$1.275, -4.9%), whilst Linc Energy Ltd (A$1.215, +2.5%) announced they were going to evaluate UCG to GTL technology in Russia. Universal Coal PLC (A$0.063, +21.2%) announced the close of their facilty with Rand Bank in South Africa at their Kangala mine.

Australia and New Zealand Banking Group (A$27.65, -2.5%) looks like it is going to join BHP and RIO this week by announcing some more job cuts. This time they are heading to the Philippines no less.

Tomorrows News Today

Sad news on James Gandolfini.

China’s benchmark money-market rate climbed to a record as the central bank refrained from using reverse-repurchase agreements to ease a cash crunch in the world’s second-biggest economy. Overnight rates hit 25% which has echoes of the beginnings of Lehmans Bros .Not wishing to panic anyone but these are worrying developments.

Ford Motor Co. Chief Executive Officer Alan Mulally called Japan a currency manipulator that’s giving local exporters an unfair edge as the weaker yen threatens to undermine U.S. automakers’ profits.

Japan is “absolutely” manipulating its currency, the CEO of the second-biggest U.S. automaker said today.Der!

Despite offering some concession on transport costs, demonstrators have shown no signs of abating in Brazil.

And in stating the glaringly obvious, Cyprus President Nicos Anastasiades has urged eurozone leaders to revise the terms of his country’s bank bailout, in a highly critical letter.He said the “haircut” imposed on large deposits under the 10bn-euro (£8.6bn) bailout had significantly eroded the capital kept by businesses in banks.

Meanwhile in a Galaxy far, far away in London, the Chancellor has announced they have started the process of selling Lloyds Bank back to the public. Presently the Government owns 39% of Lloyds and 81% of RBS after the financial crisis.Looking to split RBS into good bank/bad bank.

Clarence xxx