The dummy spit continues as the US collapsed last night. Our market followed suit but fought back bravely as the PBOC (China’s Central Bank) injected some much needed liquidity into their banking system. Yesterday’s news that the Overnight bank repo rate had soared to 25% was partly the reason for the big sell off yesterday, so money being flashed around helped us rally from a down 75 day to be nearly positive at one point before closing with a very modest loss. We were oversold and some bargain hunters were seen roaming the savannah today, picking at the carcasses of the fallen. Gold, Oil and US futures all rallied in our time zone and the Aussie Dollar seemed to find some temporary stability for a time. This was enough to tempt the buyers in as we closed down 52 points for the week! Yes really, last Friday it was 4791 and today we closed at 4739.Feels like a lot worse. Did rally to 4861 though on Wednesday before Ben took away the lollies!

The big red blob of banking bore the brunt of the selling as their costs of funding their loan books continues to rise overseas. One of the reasons they were able to pass on the whole rate cut last time was the falling funding costs. Methinks that even if the RBA did cut in July, and they won’t, the fund increase will make it hard for them to pass on .Some of the other financials though posted gains despite the rout with AMP (A$4.98, +1.0%), ASX (A$33.10, +0.3%), Insurance Australia Group (A$5.44, +0.2%) and Suncorp Group (A$12.12, -0.7%) all firmer.

Good see the big resource stocks take advantage of the weaker dollar and post modest rises or falls, BHP Billiton (A$32.45, +0.9%), RIO Tinto (A$52.66, +0.1%) and Woodside Petroleum (A$35.50, +1.1%) all positive whilst Fortescue Metals Group Ltd (A$3.05, -2.9%) continued to suffer after yesterday’s market update. However in the desolate waste land that are the gold miners these days, things continue to go from bad to really, really terrible. Kingsgate Consolidated (A$1.50, -1.6%), Evolution Mining (A$0.645, -6.5%), Silver Lake Resources (A$0.68, -17.1%), Regis Resources (A$3.23, -4.4%) and Sihayo Gold (A$0.076, unch).

In the sectors today, Media struggled as Fairfax Media (A$0.50, -2.9%), Ten Network (A$0.265, -1.9%) and Seven West Media (A$1.935, -4.2%) all fell along with poster boy APN News & Media (A$0.265, unch). Consumer stocks were actually a tad better with Super Retail Group (A$11.74, +2.2%), Premier Investments (A$6.42, +0.5%), David Jones (A$2.45, +1.7%), Myer (A$2.26, -0.4%) and Trade Me Group (A$3.96, +2.1%) all positive. Healthcare continued to find friends with Sonic Healthcare (A$14.71, +2.2%), ResMed Inc. (A$5.14, +0.6%) and Ansell (A$18.16, +0.3%) bouncing. Staples like Telstra (A$4.55, -0.7%) recovered well as did Coca-Cola Amatil (A$12.49, -2.8%), Origin Energy (A$12.72, +0.2%),Woolworths (A$31.99, unch) and Wesfarmers (A$38.22, -1.1%).

Winners today were Senex Energy (A$0.54, +9.1%), Macquarie Atlas Roads Group (A$1.955, +4.8%), CSR (A$2.13, +3.4%), Whitehaven Coal (A$2.35, +7.3%) and WorleyParsons (A$20.18, +4.6%) whilst the canine club was filled out with resource stocks a plenty, Independence Group NL (A$2.62, -7.1%),Regis Resources (A$3.23, -4.4%), Newcrest Mining (A$10.35, -3.7%) (now a life member) and Panaust (A$1.98, -4.3%).

Volume was still on the light side considering the volatility and it seems that many players have retreated to the sidelines to wait for the dust to settle.

Stocks in the News

BHP Billiton has sold a 15 per cent stake in a West Australian iron ore mine to two Japanese conglomerates for $1.64 billion. ITOCHU Corporation is investing $872.51 million while Mitsui is stumping up $763.44 million in shares and loans in BHP’s Jimblebar mine in the Pilbara region. ITOCHU will hold an eight per cent stake in the project while Mitsui will have a seven per cent interest.

I feel for RIO Tinto (A$52.66, +0.1%) after the opening of their huge Mongolian Copper project was once again quashed by the Mongolian Government yet again! This relationship has turned very sour with the Government trying to take a bigger stake in this one now it is ready to produce.

In house stocks Cockatoo Coal (A$0.033, -10.8%) fell to the unimaginable 3.3 cents after announcing a loan extension to their KEBA $100m facility. While Linc Energy Ltd (A$1.15, -5.3%) CEO peter Bond looks to have cemented his season ticket to Chelsea next year with news of a tie up with the Premier League clubs Russian owner.

Following on from this week’s profit warnings, both G.U.D. (A$6.01, -2.6%) and Mcpherson’s (A$1.29, -4.4%) continue to feel investors wrath, with the latter suffering a huge 30% drop this week.

So this is where the jobs have been added over the last year, the Retail sector has added 47,000 jobs over the past 12 months. Healthcare is next, with more than 43,000 new jobs created over the past year. Government administration and education also saw solid increases of 31,000 and 19,000, they said. And the retailer still bleat about the outlook.

Tomorrows News Today

Its quadruple witching tonight in the US. These events tend to add a little more volatility than usual to the proceedings, so will be fun there tonight. But would expect some buying tonight as the US looks a little oversold but upside should be limited as caution reins.

SHIBOR measures the cost of borrowing between Chinese banks. Yesterday, it surged to its highest level since the global financial crisis in 2008, peaking at 5.43 per cent. Also yesterday, the benchmark weighted-average seven-day bond repurchase rate jumped a whopping 380 basis points to a record high of 12.06 per cent, while the overnight repo rate surged 598 bps to 13.85 per cent.

The downturn in the Eurozone’s services and manufacturing sectors eased in June as output fell at its slowest rate since March 2012, a survey suggests. Markit’s composite purchasing managers’ index (PMI) for the eurozone rose to 48.9 in June, up from 47.7 in May.

On Greece, The International Monetary Fund (IMF) has said that no financing problems will arise, if the current review of the country’s bailout programme concludes by the end of July.

Normal service will resume Monday. But expect more volatility in the coming months as helicopter Ben tries to back out of QEIII. Good luck! As they say at the Fun Fair, ”Hold tight for a fast ride the louder you scream the faster you go!”

Guest host on Sky Biz at 5.30 tonight if anyone watches this stuff.