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Another week and more fun and games to come as we grapple with what the World will look like when Uncle Ben takes his bat and ball and goes back to Princetown. Good to see one of the Fed Chief in St Louis saying that Ben’s comments were “inappropriately timed” when he lay out the road map to the pace of QEIII. This guy Bullard looks like he wants in for the race to be the new head honcho at the Fed. So what’s in store for our market this week. After last week’s volatility maybe we will see less wild swings ,its coming to the end of the tax year so expect to see some more tax loss selling especially in golds and resource stocks. To put it in perspective though after all the shenigans and the headlines in the press about huge wipe outs in the market we were down 50 odd points!!!I am still expecting our market to limp around until the election ..we will see increased volatility as the computers continue to dominate thin trade. However I remain a fan of good yield stories and those that will benefit from the lower Aussie Dollar..expect it to trade below 90 cents in the next few months and us to hit 4600 albeit briefly…
Idea of the Day-Stocks that benefit from a lower Aussie dollar..here’s a list to get you thinking..
Defensives include AMC, BXB, COH, CWN, RMD, SHL, TWE and WDC. Cyclical names include CSR, IPL, JHX, NWS and ORI.
Things to make me go mmmmmm…!
1.Another day another profit downgrade.. Insurer AMP expects its first half underlying profit will be lower than estimated and come in between $415 million and $435 million. AMP said today it was providing the guidance update for the first half of 2013 following poor claims and lapse experience in its Australian wealth protection business in the second quarter, particularly in May. Experience losses were $32 million for the five months to May 31, comprising $26 million in insurance claims.
Around 50 per cent of claims were related to income protection, it said in a statement.
2.Australia’s big four banks have been ranked the most profitable in the developed world for the third year running, reigniting criticism about their market dominance. They make 71m bucks a day..not bad from a population of 24m ..that 3 bucks each day from everyone!!!With big bank profits likely to exceed $26 billion this year, figures show the Commonwealth Bank, Westpac, ANZ and NAB made better returns last year than lenders in 10 major developed countries, including Canada, the US, Britain and Europe.
3.This was the official reason that the Chinese banks suffered a liquidity crisis last week!!
4.Major economies risk ballooning debt loads unless their growth can keep pace with increases in borrowing costs as spending on the elderly rises, according to the Bank for International Settlements.
Japan’s public debt would swell to 600 % of gross domestic product by 2050 on a 2 percentage-point increase in funding costs, should its age-related government spending continue unchecked, the Basel-based BIS said in its 83rd annual report. In the U.S.the debt-to-GDP ratio would almost double to 200 % under the same circumstances, it said.
5.If you thought the Cyprus model was a one off ,think again. Euro finance ministers are now negotiating the way banks are bailed out with the bureaucrats split on who pays…doesn’t look like it was a one off model after all!!!
6.Japanese day Traders are roaming the land like Samurai Warriors with huge margin leverage up to 300% and trading like nutters. No wonder we have such wild moves in the Japanese markets.
The number of shares traded by individuals rose to a record in May, some 43 % of Japan’s total equity volume, up from 27 % before the rally started in November, according to the Tokyo Stock Exchange.
7. APN News & Media: is considering a major restructure that would allow the embattled trans-Tasman company to sell out of its outdoor advertising assets in return for full control of its radio division. The asset swap was one option being considered by the APN board and new chief Michael Miller.
8. Barrick Gold will this week announce more job cuts and potential mine closures in Western Australia as the falling gold price continues to heap pressure on local producers. Barrack has already laid off nearly 60 people in WA at the start of the month.
9.Potash is back in the paper, Hong Kong-listed investment house Dingyi Group’s has made a $190.4 million proposal to buy potash explorer/developer Elemental Minerals. While Dingyi is yet to make its 66¢-a-share cash offer binding, the company is reported to have received a $US100 million investment from China Development Bank for the purpose of funding the acquisition.
10. iSelect has flagged a move into superannuation products and potential acquisitions in the home loans, broadband and utilities sectors to underpin its growth strategy, following today’s $215 million sharemarket listing. Despite the volatile sharemarket, demand for the float has been strong. On listing the company will be valued at $479m, with its shares priced at $1.85 each.Code is ISU…should go well!!
11. Mining giant Rio Tinto has decided to retain its diamonds businesses following a review which considered a range of options, including divestment. Rio Tinto Diamonds and Minerals chief executive Alan Davies said the medium to long-term market fundamentals for diamonds remained robust, fuelled by growing demand for luxury goods in Asia and continuing strong demand in North America….in other words no one else wanted it!
And finally……………..an Amish joke…
An Amish boy and his father were visiting a mall. They were amazed by almost everything they saw, but especially by two shiny, silver walls that could move apart and then slide back together again. The boy asked, “What is this, Father?”
The father (never having seen an elevator) responded, “Son, I have never seen anything like this in my life, I don’t know what it is.
While the boy and his father were watching with amazement, a fat old lady in a wheel chair rolled up to the moving walls and pressed a button. The walls opened and the lady rolled between them into a small room.
The walls closed and the boy and his father watched the small circular numbers above the walls light up sequentially. They continued to watch until it reached the last number and then the numbers began to light in the reverse order. Finally the walls opened up again and a gorgeous, voluptuous 24 year old blonde woman stepped out.
The father, not taking his eyes off the young woman, said quietly to his son …
“Go get your mother.”
Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs