A day to flip flop around as early gains gave way to weakness then the Chinese GDP figures spurred a 20 point gain before apathy once again gained a foothold.

Once again though financials were in demand with the big four banks providing us with the usual big green blob. Macquarie Group (A$45.16, +0.9%), QBE Insurance Group (A$16.84, +0.8%), Lend Lease Group (A$9.16, +2.1%) and the fund manager stocks like Magellan Financial Group (A$12.81, +2.7%), Perpetual (A$42.17, +1.8%) and Henderson Group PLC. (A$2.84, +1.4%) also joined the party. In resource land BHP Billiton (A$33.25, -0.2%) struggled to find direction after early falls but the GDP number helped convince the bulls to keep buying. Newcrest Mining (A$11.63, -3.8%) was disappointing given the higher Gold price and the outlook seemingly better for the September quarter as a traditionally better quarter for Gold. RIO Tinto (A$54.77, +0.1%) and Fortescue Metals Group Ltd (A$3.50, -1.1%) went nowhere really whilst Alumina (A$1.065, -2.3%), Iluka Resources (A$10.41, -2.0%), Sandfire Resources NL (A$5.73, -3.7%), Independence Group NL (A$2.98, -2.6%), Oz Minerals (A$4.11, -1.0%) and Panaust (A$1.94, -2.5%) all fell.

Consumer stocks were weaker with Coca-Cola Amatil (A$12.73, -1.3%),Wesfarmers (A$39.04, -0.1%) and Woolworths (A$33.77, -0.6%) all easier. Whilst in industrials Telstra (A$4.83, unch) were better, as were News (A$33.50, +2.1%), Amcor (A$10.82, +1.5%), Sydney Airport (A$3.57, +1.1%), Macquarie Atlas Roads Group (A$2.19, +4.3%) and Transurban Group (A$6.80, -0.3%). Energy stocks also benefitting from higher oil price and interest returning with Oil Search (A$8.22, +0.9%), Beach Energy (A$1.36, +1.5%), Buru Energy (A$1.74, +4.5%), Santos (A$13.94, unch) and Neon Energy (A$0.29, +7.4%) all faring well.

Big grinners today included Linc Energy Ltd (A$1.735, +26.2%), Telecom of New Zealand (A$2.03, +4.4%), Paladin Energy Ltd (A$0.96, +3.2%), Aquila Resources (A$2.08, +4.0%) and Senex Energy (A$0.665, +3.1%) whilst in the dog house today were Sigma Pharmaceuticals (A$0.75, -3.8%), Regis Resources (A$3.40, -4.5%), Monadelphous Group (A$15.95, -2.4%), Seek (A$9.45, -2.7%), Lynas (A$0.435, -2.2%) and Independence Group NL (A$2.98, -2.6%).

Volume was once again disappointing with typical Monday fatigue. Maybe it was the Ashes test last night or the Tour de France or maybe just waiting for the RBA minutes tomorrow and school holidays to end, whatever it was volumes remain an issue.

Stocks in the News

Few things happening in M&A land today with news that RHG (A$0.515, +4.0%) was recommending the takeover offer from Resimac and troubled utility seller Australian Power & Gas Co (A$0.505, +29.29%) has been approached by AGL Energy (A$14.96, -0.9%) keen to get their hands on the 350,000 customers. At the hefty price tag of over 100m, its about 300 bucks a customer.

Also in the news today was house favourite Linc Energy Ltd (A$1.735, +26.2%) with a production update from its Cedar Point field in the US. One well is now producing 1000 barrels of oil equivalent a day in the shallow waters of Galveston Bay. This stock has pretty well doubled in the last few weeks! In other house stocks Pharmaxis Ltd (A$0.20, +11.1%) continues its slow recovery and the onward march of SMS Management & Technology (A$5.18, +0.4%) continues as does Buru Energy (A$1.74, +4.5%) showing some good gains in this new tax year.

Good to see the bad news continues for some as Treasury Wine Estates (A$5.11, -12.2%) announced a big writedown of its US inventory. Treasury announced today it will take a $160 million before tax hit to its earnings to help rid the key US market of aged and excess wine stock as well as cope with a restructure of its distribution system into America. Now I am no expert on the wine business but doesn’t wine improve with age and therefore is worth more NOT less… I have been getting ripped off all these years!

Als (A$9.41, unch) went into a trading halt today pending an announcement of a material acquisition.

In economic news locally, Sales of new motor vehicles in Australia jumped by the most in 10 months in June to hit a record high. Figures from the ABS showed new vehicle sales rose 4.0 per cent to a seasonally adjusted 97,687 in June, from 93,927 in May. The jump left sales up 7.1 per cent on June last year and a big acceleration from May.

Chinese officials look to be rewriting history as they now deny that the Finance Minister said anything to US media about a rate around 7% for GDP!GP came in as expected by the Government at 7.5%.. Well it would, wouldn’t it! Of course the focus was on the headline GDP number but less impressive and more worrying is the Industrial production umber which came in at just 8.9 percent in June compared with May’s 9.2 percent gain. This seems to suggest things may be worse than some think.

Meanwhile in Singapore home sales are booming. Home sales rose 24 percent to 1,806 units last month from a revised 1,459 units in May, the Urban Redevelopment Authority said on its website today, the highest since 2,793 units in March. One ratings agency is warning of a banking issue if rates turn up in the future after such strong price rises in a low interest rate environment. Singapore on June 28 unveiled new rules governing how financial institutions grant property loans to individuals, extending efforts to curb excessive price increases.

Tomorrows News Today

San Miguel Corp’s plan to raise about $4 billion by selling power assets brings it closer to funding the Philippines’ biggest company’s expansion into industries and infrastructure. The Southeast Asian nation’s most acquisitive company plans to spend $35 billion to complete President Ramon Ang’s strategy to transform itself from a brewer and foodmaker into an investor in energy, mining, airlines and roads.

Things are getting interesting in Spain as the PM looks to be deeply embroiled in a bribery scandal.

And despite the equity market bubble continuing its seems global business is not sure, Worldwide business confidence has fallen back to its financial crisis lows, with sharp declines in optimism in both the U.S. and China, according to an economic sentiment survey by Markit. The report, which surveys around 11,000 global manufacturers and service providers, found that business optimism darkened in the first half of this year, dropping back to levels not seen in four years.

“Fabulous Fabrice” from Goldmans gets his day in court this week. Should prove entertaining for the media to have a peak inside the mighty house of Goldmans.

France has failed to secure backing for tough new international tax rules specifically targeting digital companies, such as Google and Amazon, after opposition from the US forced the watering down of proposals that will be presented at this week’s G20 summit. Of course the US is pushing for a moderate change for its net wonders!

And in echoes of 1987 for those of us that were there and can still remember that far back, a Mercedes racing car driven by Fangio whilst winning the German and Swiss Grands Prix has sold for a gob smacking $29.6m.Including buyers fees!

And this is why we love Italy and why it is a basket case financially! For the first time, Italy has appointed a “prosecco policeman” – a wine expert whose job is to go round bars and restaurants to check that the light and fizzy aperitif is being served properly.

Clarence

Xxx