A dull and lacklustre day today on the surface but like a water polo game, lots happening underneath!

Big news was the production numbers from BHP which were all very positive with the exception of Oil. As a result we saw continued strength in the resource sector as opposed to the financials and industrials which came under some pressure. BHP Billiton (A$34.19, +2.3%), RIO Tinto (A$56.15, +1.1%), Fortescue Metals Group Ltd (A$3.71, +6.0%) and Iluka Resources (A$10.91, +4.7%), following news from the company, all shone whilst the big four became a blob of red on the market map. Iron Ore has been defying the critics, bears and gravity and has held up so well that investors are having to look at BHP and others where they languished in the bargain bin and get their shorts back. Easy to understand why, with the currency at 92 and ore at 128 that’s a pretty healthy price in AUD. Not as good as the boom days of 180 bucks a tonne but then the currency was 1.05!! Should keep BHP et al happy.

One bright spot in the financials were the insurers as Insurance Australia Group (A$5.94, +1.7%) reported today and Suncorp Group (A$12.67, +1.7%) joined the celebrations. The index wafted around all day with plus or minus five points depending on which way the wind blew. Golds were back in favour with Kingsgate Consolidated (A$1.665, +8.8%) leading the way, even Newcrest Mining (A$11.47, +0.7%) had a better day today whilst Silver Lake Resources (A$0.745, +4.9%), Evolution Mining (A$0.725, +8.2%),St Barbara (A$0.625, +5.9%) and Medusa Mining (A$1.785, +6.9%) all looked pretty good.

Bit of slippage today in IT stocks with Computershare (A$10.08, -2.9%), Carsales.Com (A$9.32, -4.3%) easier, while health care were mixed. CSL (A$64.94, -1.1%), Australian Pharmaceutical Industries (A$0.40, -1.2%), down but Ansell (A$19.12, +1.8%) bounced as did ResMed Inc. (A$4.95, +0.2%) and Sonic Healthcare (A$14.56, +0.6%).

Boring old industrials were better with Toll (A$5.64, +2.2%), Sydney Airport (A$3.55, unch), Qube (A$1.725, +2.1%) showing good gains but as hopes of another rate cut recede the retail stocks have come over a bit gloomy and despondent! JB Hi-Fi (A$16.53, -1.9%), Myer (A$2.51, +1.2%), David Jones (A$2.47, -0.4%), Kathmandu (A$2.23, -3.0%) and Harvey Norman (A$2.50, +0.4%) were mixed in quiet trade.

Big winners today in larger caps were Atlas Iron (A$0.89, +7.9%), Fortescue Metals Group Ltd (A$3.71, +6.0%), Iluka Resources (A$10.91, +4.7%), Beadell Resources (A$0.69, +4.5%), Arrium (A$0.93, +3.9%) and Mineral Resources (A$9.29, +4.0%) whilst in the sorry camp were Hutchison Telecommunications (Australia) (A$0.044, -6.4%), M2 Telecommunications Group (A$5.49, -5.7%). Lynas (A$0.405, -6.9%), Linc Energy Ltd (A$1.595, -4.5%) and Carsales.Com (A$9.32, -4.3%).

Once again volume wasn’t enough to get any models out of bed.

Stocks in the News

Big news day for Billabong International (A$0.335, +34.0%) as the US hedge fund Altamont Capital took effective control and installed their man in the top spot. New CEO Laura Inman is being pushed off into the sunset with about $4m in her back pocket for doing such a brilliant job. Same sort of money Mickey Arthur is asking for and with similar results!

Good news for G8 Education (A$2.66, +2.3%) holders as the company announced that the analyst community were too pessimistic and that things were going to be better than expected. The stock continues to rise. In other house stocks Karoon Gas Australia (A$6.09, -2.6%) fell a tad after announcing their July Review whilst goldie Kingsgate Consolidated (A$1.665, +8.8%) had a good run following a presentation.

Insurance Australia Group (A$5.94, +1.7%) says it will beat its previous profit guidance for the recently-concluded financial year, thanks to lower-than-expected claims and favourable money market trends. The insurer today said its profit margins would be between 16.8 per cent and 17.2 per cent- compared with previous guidance of 12.5 to 14.5 per cent.

Wesfarmers (A$38.89, -0.1%) says production at its coal mines rose sharply in the June quarter after recovering from the effects of wet weather over the summer. The company said 2.84 million tonnes of coal was produced from its coal mines over the quarter, up 25.2 per cent from the previous quarter, Wesfarmers said in a production report. Metallurgical coal production increased by 28.9 per cent and steaming coal production was up by 17.5 per cent compared to the previous quarter.

Iluka Resources (A$10.91, +4.7%) reported revenue from its mineral and sands operations had dropped 42 per cent in the first half of 2013 after lower prices forced it to cut production.

Iluka said production so far this year was down 46 per cent on the previous six months, and that had contributed to the sharp fall in revenue.

Revenue for the six months to June 30 was $382 million, down from $663 million for the previous six month period.

Tomorrow’s News Today

More earnings from the US, more rumblings from the Fed as different chiefs have different views. But we get Uncle Bens tonight as he goes in front of the Star Council for his semi annual grilling. Expect more opaque doublespeak but probably won’t rock the boat too much. The whole thing will be as baffling as Kim Kardashian’s fame.

Singapore’s exports in June extended the longest run of declines since the global financial crisis, suggesting economic growth last quarter may have been less than the government initially estimated. Non-oil domestic exports slid 8.8 percent from a year earlier, falling for a fifth month, the trade promotion agency said in a statement today.

Commercial real estate investment in Japan spiked a whopping 78 percent in the second quarter from the same period last year, a new report shows, in a sign that the impact of the government’s radical reflating policies is gaining traction.

Yahoo! Inc. (YHOO) gave a revenue forecast that fell short of analysts’ estimates as Chief Executive Officer Marissa Mayer puts more focus on building products than drumming up immediate sales at the largest U.S. Web portal. As they say in that film at the moment ..”I give it a year”… Yahoo’s share of the $17.5 billion market for display ads, its core business, will slip to 7.9 percent in 2013 from 9.2 percent last year, estimates researcher EMarketer Inc. And don’t forget that she paid $1.1bn for tumblr.com.

Under a draft European Commission plan, seen by the media a ceiling would be introduced for charges on all consumer debit and credit card transactions, scaling back a multibillion-euro revenue stream for EU banks. Also New car registrations in the EU dropped 5.6 percent in June to 1.175 million cars from a year ago. Lowest level in 20 years.

Joining in the fun today, France’s Hollande will announce $3bn worth of cuts to the French Budget. Teacozy raised taxes by $70bn over three years which killed the economy. Let’s see what the “maître d”Hollande has in store now. It’s budget love! Budget!

Britain’s workers are suffering the most protracted squeeze on their incomes since the long depression of the 1870s and are now well into their fourth year of falling real wages. High inflation and stagnant pay for many workers mean that real wages have now fallen for 40 months, according to calculations by the TUC. It says that is the longest such stretch of financial pain since 1875 to 1878, when the world economy was mired in the so-called long depression.

And just to show that London is now pretty much a separate economy from the rest of the UK, Harrods has reopened its wine department. Few specials in there. At the extraordinary end is a bottle of Louis Roederer Cristal champagne – the highly prized 2002 vintage – nestling discreetly in a presentation box inside its own real gold “cage” on an open shelf. The jeroboam is the first of only seven being sold by Roederer in the UK this year, and will retail for £18,000.Dont see too many of those in Dan Murphy’s!

And here’s my quote for the day from the head of America for Barclays, “U.S. stocks are up close to 17 percent on a 2.5 percent earnings rise – it’s hard to make the case that that just can be done on fundamentals alone. It’s really money in motion” So be careful what you say Ben!!

Clarence

Xxxx