And we started so well today. Then the triple whammy hit! Orica (A$18.19, -13.4%) downgrade, Santos (A$13.74, -3.6%) production cuts and the massive hit to the Nikkei as it plunged over 350 again at one point. Unfortunately this was enough to kill off any optimism from overnight. The results from Google and Microsoft didn’t help either of course and news that Detroit had gone bust just rubbed salt into the wounds. Not too flash all things considered but once again most players were happy to sit on the fence and ponder the markets. Volume was again hardly the stuff of dreams. So to the movers and shakers today. We actually had losses across the board with few exceptions. Newcrest Mining (A$11.12, +1.6%) were up. I know things must be bad when they rally. Telstra (A$4.91, +0.8%) also better as the dividend approaches and News (A$33.38, +1.8%) up to. We did get some strength in energy stocks despite Santos (A$13.74, -3.6%) production numbers with Woodside Petroleum (A$37.73, +0.7%) better and Oil Search (A$8.14, +0.7%) slightly positive but banks, financials, industrials all fell in light trading. Platinum Asset Management (A$6.09, +0.3%) bucked the trend in wealth managers and insurers but QBE Insurance Group (A$16.15, -1.0%), Suncorp Group (A$12.42, -1.8%) and AMP (A$4.63, -2.1%) did not fare so well.

Mining services were once again under pressure led by Bradken (A$4.72, -7.6%), Boart Longyear (A$0.54, -10.7%) and Ausdrill (A$1.14, -3.0%) as punters sold these to take up their stock in Als (A$8.88, -4.3%). In retail land we saw some modest gains led by Premier Investments (A$7.50, +4.0%), Myer (A$2.55, +2.8%) and Village Roadshow (A$5.64, +3.5%). Utilities were also in demand with Duet Group (A$2.31, +2.2%), SP AusNet (A$1.25, +1.2%), APA Group (A$5.90, -0.2%) and AGL Energy (A$15.01, +0.8%) improving whilst in defensives Woolworths (A$33.30, -0.1%) stabilized although Wesfarmers (A$38.95, -0.4%) fell away a tad. Media stocks were mixed with Seven West Media (A$2.12, -2.3%) and Fairfax Media (A$0.505, -2.9%) down whilst the News (A$33.38, +1.8%) was up.

On the “fun side of the Island” were Lynas (A$0.445, +7.2%), Aquila Resources (A$2.08, +1.0%), Amalgamated (A$8.29, +2.7%) and Duluxgroup (A$4.50, +2.3%) while on the “Jersey side of the Cesspool” were Orica (A$18.19, -13.4%), Bradken (A$4.72, -7.6%), Sandfire Resources NL (A$5.51, -7.9%), Senex Energy (A$0.70, -5.4%) and Ainsworth Game Technology (A$3.46, -4.2%). Love Madagascar!

Seems that the market is having a tough time trying to break through the glass ceiling at 5000.Tried once today and failed again today. Maybe next week after the Japanese election.

Stocks in the News

Orica (A$18.19, -13.4%) slap bang in the news with an earnings downgrade due to higher than expected costs and tough economic conditions. NPAT suggested to be down around 10% compared to 2012.

Santos (A$13.74, -3.6%) also joined in today with some production downgrades especially on the gas side of things were production was 6% lower due to lower production out of the Cooper, Carnarvon and Indonesia. Good news was the average gas price at $5.61 was a record.

Today we saw the return of Als (A$8.88, -4.3%) after their recent foray into the Oil and Gas business including a Renounceable rights issue of 1 for 11 at $7.80 and a placement to instos at $8.75 showing strong support for the company’s expansion plans.

More twists and turns than a Kelly Slater heat as Billabong International (A$0.40, +9.6%) heads to the takeover panel. US hedge funds Oaktree Capital Management and Centerbridge Partnerson Friday asked Australia’s takeover regulator to intervene in surfwear company Billabong International’s $359 million refinancing deal with Altamont Capital Partners. Oaktree and Centerbridge, whose own refinancing proposal was rebuffed by the company, are claiming elements of the deal including a hefty break fee “amount to lock-up devices that are anti-competitive and coercive.”

Sydney Airport (A$3.64, +2.2%) More than 18 million passengers passed through Sydney Airport in the first half of 2013, with the Lions’ rugby tour and growing demand from Chinese tourists helping to boost numbers. Sydney Airport CEO Kerrie Mather said passenger traffic was up three per cent in the first six months of the year, compared to the same period in 2012.

Gold has risen toward a three-week high and is set for the first back-to-back weekly gains since May!

Tomorrows News Today

More action from Lords this evening. The interest in the Ashes series has given GEM its highest ever audience numbers and will not be welcomed by Ten Network (A$0.295, +1.7%) and Seven West Media (A$2.12, -2.3%).

Japanese polls this weekend in their upper house. Abe looking to increase his hold and continue to implement the three arrows of his growth policy. I know I’m excited.

Dell has announced an eleventh-hour delay on a vote on founder Michael Dell’s plan to buy the computer maker. Thursday’s vote at a shareholders’ meeting at Dell’s Texas headquarters has been put back until next Wednesday so the board can drum up more support. Michael Dell has spent the past five months trying to persuade shareholders to approve the buyout proposal, rather than Corporate raider Icahn’s proposal.

China’s rating firms cut the most bond issuer rankings on record in June and brokerages said they are preparing for the onshore market’s first default as the world’s second-biggest economy slows.

A total of 38 issuers were downgraded last month, according to Guotai Junan Securities Co., the most since the nation’s third-biggest brokerage started compiling the data in 2005.

Nokia shares have tumbled 4% after the company released weak second quarter sales. The mobile phone company reported sales of 5.69bn euros ($7.46bn, £4.92bn) for the three months to the end of June, down 24% on the same period last year. The company sold 53.7 million mobile phones during the quarter, down 27% on last year.

While France has moved to ban shale gas while Hollande is the man, across the Channel, the UK Government has taken a different tack. The government has outlined plans to give tax breaks to companies involved in the UK’s nascent shale gas industry. It has proposed cutting the tax on some of the income generated from producing shale gas – found in underground shale rock formations – from 62% to just 30%.The plans would make the UK the “most generous” regime for shale gas in the world, the government said.

For those of us that can remember the markets’ reaction to the US losing its AAA status, here’s an interesting development. Rating agency Moody’s raised its US sovereign debt outlook on Thursday after a positive day on US stock markets. The agency raised its outlook for the US from negative to stable, citing steady growth in the economy.

Finally, the most unpopular man in Southern Europe took his life in his hands and visited Greece. Finance Minister Schaueble was in Athens to gloat over all the unemployed civil servants. Of course in true democratic fashion they have prohibited protests and gatherings of more than three people holding banners or shouting slogans. Draco would be proud!

Enjoy another wonderful weekend of International sport, Tour, Open and Ashes.

 

Clarence

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