Morning all,

Slight positive lead in from the US last night, up 20 of which Boeing accounted for 29 points of that rise after the fire on the plane was not their problem..very quiet day in the US as they await more earnings numbers. In fact  it was the lowest volume day of the year. Excluding holidays. Also they have got more ramblings from the World’s most powerful man, Uncle Ben, when he speaks later this week.

Yesterday we got the Chinese GDP numbers bang in line. Funny that. The official that was talking down the GDP print has been quietly smacked on the wrist and his comments changed in the media in China. So nothing to worry about in the World’s second biggest economy. Talking China we get to see our big three miners this week with some production numbers..BHP,RIO and FMG..BHP Wednesday and the others today..should be interesting reading..

Expect another modest day today maybe 20 odd up…but thin trading again. Volumes have been pretty pathetic with lack of conviction evident. Iron ore continues to push higher, oil is better so good for energy stocks..Cooper basin seems to be popular at the moment so keep an eye on BPT and DLS.

Idea of the Day

Good to see a few corporate moves recently…RHG being bid for ,APK being taken out by AGK.ALQ also moving into the oil and gas business and a few minnows in the mining sector joining forces. Will bring a tear of joy to an investment bankers cold ,cold heart!

So as we head back up past 5000 what’s hot…well obviously the banks still, I continue to like BHP for all the reasons I have spoken about, NCM as a leveraged play on gold and the rubbish management being replaced anyway possible..

But if you are looking for a one stop shop for quick and dirty equity exposure sometimes an Exchange Traded Fund is a good way to go…these replicate the underlying asset with low management fees and ease of trading..there is a new kid on the block with one that replicates the ASX200…it’s called QOZ…here are the details.

Key Points

• Established Index with +20 yrs of performance
• Holds effectively the same physical stocks as ASX 200 but with better historical performance
• Access to effectively the same dividend yield and franking profile as the ASX 200
• Low management fee of 30bps prices this fund similar to other index exposures and significantly lower than many active exposures.

The Track Record

 

	30-Jun-13	1 Year	3 Years (p.a)	5 Years (p.a)	10 Years (p.a)	20 Years (p.a)
QOZ AU Equity*	FTSE RAFI AUSTRALIA 200 INDEX	21.53%	5.47%	1.28%	6.45%	7.48%
STW AU EQUITY	SPDR S&P/ASX 200 FUND	17.01%	3.59%	-1.52%	3.91%
VAS AU EQUITY	VANGUARD AUST SHARES IDX ETF	16.15%	3.33%
IOZ AU EQUITY	ISHARES MSCI AUSTRALIA 200	16.81%
SFY AU EQUITY	SPDR S&P/ASX 50 FUND	19.83%	4.94%	-0.43%	4.46%
AFI AU EQUITY	AUSTRALIAN FOUNDATION INV CO	30.77%	4.77%	1.62%	4.72%	6.41%
ARG AU EQUITY	ARGO INVESTMENTS LTD	25.44%	3.36%	-1.84%	3.62%	6.37%
MLT AU EQUITY	MILTON CORPORATION LIMITED	20.97%	4.81%	-1.03%	3.66%	6.89%
	FTSE RAFI AUSTRALIA 200 RANKING	3	1	2	1	1

 

Not much volume yet but will be a good way to get exposure to the market without all that stock picking rubbish!!

Things to make me go mmmmm…….

Going to see Man U play this weekend !!!Yay!!Thanks for the invite Fran.

Laboratory testing group ALS, formerly known as Campbell Bros, has dived into the oil and gas sector, with the $US533 million ($A579 million) purchase of a large oil and gas operator, Reservoir Group.The purchase will be funded through a 1-for-11 rights issue priced at $7.80 a share, a handy discount to its last traded share price of $9.41.

The share issue will raise $246 million with the balance of the purchase price to be funded via borrowings.

This applies to all my readers I guess!!    Some Australian brokers are ”tipping” privileged clients about private analyst recommendations to buy or sell stocks before those recommendations are made public. Those tips to privileged clients are leading to ”abnormal trading volumes” on associated stocks before those recommendations are made public, new research has warned….

Good to see Coles saying that “Baked” does not actually mean that they made the bread from scratch rather that they popped it in the oven!I always thought that the “baked fresh daily in our bakeries” actually meant they really made it rather than buy the stuff frozen from Ireland and defrost it!

14^th up day in a row for NASDAQ…volume is getting worse and worse by the day…that is not a good sign!

Ignored last night were the retail trade figures from the US which showed a slowing in the great growth giant of consumerism.

US retail sales grew in June, but at a slower rate than was expected by many analysts.Sales were up by a seasonally-adjusted 0.4%, half the 0.8% rate expected by the markets.Sales of building materials – often a volatile item – fell 2.2% in the month, according to the Commerce Department.

The Institute of Economic Affairs (IEA) has announced that it is holding a competition to find the best plan for a UK exit from the European Union.

The free-market think tank said it would award its Brexit Prize to whoever came up with the best blueprint for the UK after the EU, covering the country’s withdrawal and post-exit repositioning. The winning entry will be awarded 100,000 euros (£86,525).

French President Francois Hollande has again ruled out exploration for shale gas during his presidency. The comments come as a French court was due to examine an appeal against a government ban on “fracking”.France has some of the most plentiful reserves of shale gas in Europe, but there are objections to shale exploration on environmental grounds

More British bankers earned more than one million euros (£860,000) each in 2011 than the rest of the European Union (EU) put together, according to the European Banking Authority (EBA).Figures from the EU’s banking regulator showed 2,346 bankers earned more than 1m euros in the UK, compared with 739 in the rest of the EU.

Maybe this is linked but House prices in the UK are soaring with London up 12% on a year ago and the rest of the country up nearly 5% from the same time last year…good to see that the old property bubbles are going strong..seem to remember this is one of the reasons we got into this mess in the first place..low interest rates and people buying houses as a punt rather than somewhere to live..all good until rates start to rise..remember the exploding Automatic Reset Mortgages…low rates to begin with then, whoooosh!!Well maybe it is different this time around…that’s the challenge.

For the second quarter, the expects S&P 500 earnings are expected to grow just 2.6%.This is hardly the stuff of record highs on the Dow…but it’s the outlook stupid..that or the fact that multiples are expanding as free money courses through the equity market veins.

Eight months into the biggest equity rally in three decades, Japanese executives are gaining faith in the nation’s recovery as they reward shareholders with stock buybacks and pledge to increase capital spending.Topix companies bought 1.78 trillion yen ($17.8 billion) of their own shares in the half ended June 30, the most since 2005, according to data compiled by Bloomberg.

And finally……

I was talking to a girl in  the bar last night.

She said, “If you lost a few  pounds, had a shave and got your hair cut, you ‘d look all  right.”

I said, “If I did that, I’d  be talking to your friends over there instead of  you.”

And for a City to Surf update…

Unfortunately I pulled a hamstring on Saturday playing football. So out of action for a week or so. Did my first big 7.5km run up and down hills last week in 49 minutes so was pretty happy with that until snap in front of the goal! Suspect my goal to run under 100 minutes may be in question now but hope to heal soon.

Have a great day

Clarence

XXX

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.