A sea of Red follows yesterday’s sea of Green. It does seem like the lunatics are in charge of the asylum at present. So far this week we have had a down 94, up 125, down 100 days!! Seems a lot of funds are on the sidelines with end of financial year stuff and leaving the computers to run the show! “Open the pod bay doors, HAL”. So what has caused the rout again today? Well as usual we had a weaker than expected number from China which was enough to give us a shove lower. At one stage the ASX200 was down 110 points. A speech by Uncle Fester( Glen Stevens) probably didn’t help things either as the Aussie dollar slipped below 91 cents! Cannot see why his comments about rates falling again were a surprise, wasn’t that what got everyone excited yesterday. Of course new kid on the block Chris Bowen talking the economy down not up was a nice kick in the ribs as well. Didn’t he get the hand over talk from Wayne Swansong. Anyway an afternoon rally kept things off the day’ lows but pretty hard to find any green on the screens! Maybe tomorrow!

Naturally resources bore the brunt of the sell-off led by BHP Billiton (A$31.05, -3.2%) and RIO Tinto (A$51.50, -3.0%) as they struggled together with Fortescue Metals Group Ltd (A$3.09, -1.0%), Origin Energy (A$12.30, -2.5%) and Oil Search (A$7.76, -1.8%). One of the day’s big losers in resource stocks was Cudeco (A$1.845, -7.8%) Banks and other financials also were not spared the sword with Westpac Banking (A$27.67, -2.6%),National Australia Bank (A$28.72, -1.8%) and Australia and New Zealand Banking Group (A$27.87, -2.1%) faring better than Commonwealth Bank of Australia (A$68.53, -0.5%). In other financials Macquarie Group (A$40.40, -3.0%), QBE Insurance Group (A$15.74, -1.3%) and AMP (A$4.23, -1.9%) also got whacked.

Consumer discretionary and defensives came in for some profit taking after yesterday’s extraordinary rise. Wesfarmers (A$38.68, -2.6%), Woolworths (A$32.27, -2.0%) suffering as media reports on Aldi setting the low price agenda not helpful and Coca-Cola Amatil (A$12.43, -3.0%) and Telstra (A$4.66, -1.7%) also weaker. Health care and Pharmas took some bad medicine today with CSL (A$61.25, -2.1%), Ansell (A$18.02, -0.3%), Ramsay Health Care (A$35.13, -1.5%) and ResMed Inc. (A$4.89, -1.2%) all off seeing matron in the sick bay.

Gold’s were back in casualty too with Silver Lake Resources (A$0.68, -3.5%), Kingsgate Consolidated (A$1.37, -4.5%), Evolution Mining (A$0.62, -2.4%), Regis Resources (A$3.27, -1.5%) and bucking the trend was Newcrest Mining (A$10.85, +1.6%).

On the winner’s podium today wearing the yellow jersey were Slater & Gordon (A$3.11, +5.4%), Platinum Asset Management (A$5.73, +2.3%), Caltex Australia (A$18.33, +2.7%) and Flight Centre (A$40.14, +2.1%) while at the back of the peloton struggling on the Corsican roads were Hutchison Telecommunications (Australia) (A$0.042, -8.7%), Lynas (A$0.39, -4.9%), Panaust (A$1.895, -5.0%), Whitehaven Coal (A$2.24, -5.5%) and Seven West Media (A$1.885, -5.5%).

Volume was still on the low side given the volatility. Maybe that’s why.

Stocks in the News

Woodside Petroleum (A$34.62, -3.4%) was the downgrade du jour. Although reading the announcement was a little bemused. It’s more a timing thing than anything else. Unplanned shutdowns should not draw this much fire. This one looks to have been overdone short term.

Boart Longyear (A$0.49, -11.7%) continued their descent into the Heart of darkness. Still at least the downside is now limited to 50c.

Australia and New Zealand Banking Group (A$27.87, -2.1%) has launched yet another hybrid note offer to raise $750m.

Over the past 5 yrs the Australian economy has expanded by 13 per cent. For the US, 3%. For Japan, EU and UK, it’s negative.

In economic news today we saw retail sales figures being revised down from April’s 0.2% rise to a fall of 0.1% and March’s were also revised down…seems there is no money in retail after all! David Jones (A$2.53, -1.9%) and Myer (A$2.35, -2.9%) hit accordingly. JB Hi-Fi (A$16.87, +0.2%) did buck the trend though. But the trade numbers continue to show the positive effects of the mining boom, the trade balance posted a stronger than expected surplus of $670 million in May – markets had tipped a flat month.

Tomorrows News Today

Egypt continues to be the flash point at the moment and the imminent chaos that will grip the country when the Military take back control will help the Oil price stay firm. Perhaps even the Gold price too.

Reuters reported that an unidentified EU official had stated that Greece has three days to comply with the original terms of agreement to receive its next tranche of bailout funding or ‘’face the consequences’’. Being what?

Portugal faced a crisis on Tuesday after the country’s foreign minister resigned from the centre-right government, the second minister to do so within a 24-hour period. Finance Minister Vitor Gaspar, who has implemented unpopular austerity measures as part of $101 billion bailout deal from the European Union and International Monetary Fund, resigned on Monday. This comes after Nigeria issued 5 and 10 year notes at the same rate as Portugal.

JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Goldman Sachs Group Inc. are among eight U.S. banks facing new domestic rules on capital and debt that would be even stricter than global standards approved yesterday.

Lenders will be forced to maintain a ratio of capital to assets that exceeds the 3 % floor set by the Basel Committee on Banking Supervision, Federal Reserve Governor Daniel Tarullo said yesterday.

Also adding to the woes today, Goldman’s has slashed its year end Chinese market target to 2380 from 2800.Still 8% up from here though!

US car manufacturers reported their strongest monthly sales growth in June since the recession in 2007.General Motors saw sales rise by 6%, Chrysler was up 8%, and Ford led the way with a 13% increase, led by truck sales. Japanese carmaker Toyota reported the strongest sales of all, with a 14% rise.

Hitting the media tomorrow with an appearance on Sky Business at Noon .Love it when viewers phone in about stocks.

Clarence

XXXX