Morning all,

Another strong night in overseas markets should keep things bubbling along as we get squeezed up towards 4950 which is retracing 50% of what we fell from the May high…then I suspect we will start to move back down again. The US markets are rallying hard on expectations of higher earnings yet the numbers don’t really support that. Earnings at companies listed on the S&P 500 rose 1.8 % last quarter, down from a projection of 8.3 %  six months ago, according to more than 11,000 analysts (there are 11,000 analysts on wall Street, now that I find really scary!!!). Lower expectations helped about 73 % of the companies in the benchmark measure exceed forecasts by an average of 5.1 % for the first three months of the year, results showed. So in effect expectations are down but companies beat those low numbers yet really not that strong. We even saw the IMF downgrade World growth again last night with US and China both a worry.And let’s forget about Europe, it’s toast! The IMF trimmed its forecasts for US growth this year to 1.7 %, a more pessimistic outlook than Obama’s men have been saying , due to continued pain from deep government spending cuts.

So why is the Dow pushing up…free money..as long as Ben keeps the presses going there is no other game in town. Ben is speaking tonight so this one will be closely watched but Bad news is good ,good news is good is the philosophy at the moment.

Looking at the state of Zombieland markets its hard to believe there are any problems out there..FTSE at 6500,DAX at 8100 etc!!

So our market today will likely consolidate the gains of yesterday with commodities ok so expect some resource rallies to overpower the financials perhaps. Energy stocks will continue to push higher too.

And now it is starting to look like a November election…noooooooooooooooooooooooooooooo!Not another 5 months of the phoney war..bring it on Kev 13…we need resolution not procrastination!

Few things due today with Westpac’s consumer confidence survey for July at 10.30am. And it comes ahead of tomorrow’s official jobs data for June, and Chinese Trade data today at high noon….all will be closely watched I suspect.

Market will be up 15 today is my call!

Idea of the Day-BHP starting to look interesting!!

Time to look at BHP perhaps..here they are at 31.60..Iron Ore prices have not collapsed as predicted in fact they are stronger in the last month or so, Oil prices are strong on US recovery hopes, Egyptian turmoil and problems in the Gulf of Mexico now..Aussie dollar has fallen sharply, new man at the helm and cost cutting evident everywhere…its even a yield stock now with 3.5% fully franked…so come on what’s not to like eh? Now I don’t think we are going to see a massive price run to $40 just yet but suspect that it is starting to look attractive to funds and Mums and Dads.Prefer it over RIO as RIO only has iron ore these days whereas BHP has Oil too…anyway certainly one to look at anywhere under 31 bucks I reckon.

Things to make me go mmmmm!

1.Mark Schwarzer signs for Chelsea!There is life in the old dog yet..amazing for a 40 year old..well done Mark. And in more sporting news Ashes starts tonight at Trent Bridge.

2.Whilst over in Nigeria, Four clubs involved in two play-off matches that ended 79-0 and 67-0 respectively – a total of 146 goals – have been suspended.

Plateau United Feeders were 79-0 victors over Akurba FC while Police Machine FC demolished Bubayaro FC 67-0.Most of the goals came in the second half in both games!!!Looks like the fix was in!

3.ANZ will raise $1 billion by issuing “hybrid notes” to investors, a larger ¬figure than originally intended, after strong demand. The bank announced last week that it was seeking $750 million from investors by offering the securities. ANZ said on Tuesday that the offer, which opens on Wednesday, had been increased to $1 billion because of higher demand.

4.Behind Wal-Mart (itself arguably a somewhat part-time employer), the Washington Examiner reports, that the second largest employer in America is Kelly Services – a temporary work provider. The company, started in 1946, serves 99% of the Fortune 100 and had revenues of $5.5bn in 2012 (though even this burgeoning growth area is struggling in the last quarter). Wal-Mart says it won’t build three stores it had planned for the District of Columbia if lawmakers approve a bill that would force the retailer to pay its employees at least $US12.50 an hour.

5.Economy and finance ministers from the 28 European Union countries have given the final green light to Latvia to join the Eurozone on January 1, 2014.

6.A much better measure of unemployment is U6 unemployment, which measures those unemployed plus those who are unemployed and have looked for work in the last 12 months and those who are working part-time for economic reasons.When you use this measurement, the unemployment rate is closer to 14.3%.

7.Italy’s credit worthiness has been downgraded by the ratings agency S&P. It said the continued weakness of the Italian economy was behind the cut, which saw the rating of government debt lowered to BBB from BBB+. And Bungasconi is not happy with his tax fraud appeal date set for 30^th July as some of his crimes are back in focus due to statute of limitations not coming into effect. And in Spain things are looking interesting for the PM Rajoy as he looks to be implicated in an illicit payment scandal…

8.And it looks like the US is about to lift a 80 year old ban on hedge funds and other smaller startups from advertising to the general public. They would be able to seek unlimited funds from punters!

9.The forthcoming Diggers and Dealers conference in Kalgoorlie is being renamed “Cost cutters and Cancelers!”

And finally……….

“With my ailing memory, I’m thinking of changing my password to “incorrect”.

That way, when I log in with the wrong password, the computer will tell me…

“Your password is incorrect”.

Have a good day and enjoy the Ashes!!

 

Clarence

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