Morning all,

More lackluster economic news last night from the US and some earnings misses helped the market ease back. Nothing dramatic but expect to see some of that here today. Yesterday was pretty anemic to say the least but once again the good old banks are shining through. It’s the yield stupidYup the yield chasers are back…CBA at a record high and the others all firing too. No such luck really for the rest of the market as we kick off earnings season today with Navitas..the bulk of the results don’t happen til mid August.

We are in wait mode at the moment and the looming FOMC meeting in the US on Wednesday doesn’t help either. Seems most analysts are now convinced that the Fed will start to taper in September some time. The Old Taper Trap…anyway as Ben nears the end of his time at the Fed it seems that the free money supply will be gradually withdrawn. He has already softened the market up for that day so its now just a matter of time.

Worryingly yesterday Asia was trashed, Japan has fallen a thousand points in the last week while China is the worst performing market this year and has fallen 25% since 2010..not too flash for an economy that is supposed to be growing at 7.5%.Myabe they should do like the US and recalculate their GDP based on Patents and R&D!

So where to today…I am expecting a mildly negative day with the banks giving back some of their gains and resources going nowhere really..Gold wasa little better and the Aussie dollar was weaker but Iron Ore stocks will underwhelm as we approach August..whats so significant about August aI hear you cry,well its my wife’s birthday but more importantly (not to us ) it was the month last year when Iron Ore fell significantly..so lets hope we get through this year without the 30% odd falls .

Volume will again be an issue with the sidelines a place to sit for a while longer!!

Idea of the Day 

Apparently the Sydney Residential property market is at a 10 year high..that has been driving REA yesterday…suppose it has got to be good for the Banks and other mortgage lenders…now one that has been hit hard recently is MQG after their numbers …I suspect that they are getting into more buy than sell territory..they are pushing hard into mortgages ,their FUM biz is still doing well and they are big US dollar earners..only problem they have is the securities biz..well I say only problem…sure there are some more but one to put on your watch page and look to buy sub 42.00 …our esteemed analuyst has a 49 buck price target on them too…

Things to make me go Billionaire watching!

1.I was intrigued last night to watch the Four Corners hatchet job on Big Nath…thought it was more worthy of Today Tonight and not Auntie but still…worth watching but would have liked to focus more on how he made his pile rather than the contractors he didn’t pay…made him look like a dodgy electrician…shocking really…anyway I cannot believe he spent it all…there must be some loot squirreled away!

2.Seems that the huge amounts of corporate cash that has been accumulated around the World is being spent on acquisitions rather than return to shareholders.News last night of a couple from the US and these are not small deals…plus the creation of the World’s largest ad agency too..there must be a few investment bankers and lawyers happy with all this activity.

3.Teck Resources Ltd., Canada’s second-biggest mining company, is among the remaining bidders for Rio Tinto Group’s controlling stake in Iron Ore Co. of Canada..uying Canada’s largest iron-ore producer would enable Vancouver-based Teck to diversify its production, which mostly comprises coal, copper and zinc. Rio’s 59 percent stake in IronOre Co. may fetch as much as $3.5 billion.

4.Perrigo Co. (PRGO), a U.S. maker of over-the-counter medicines, agreed to buy Irish drug company Elan Corp. (ELN) for $8.6 billion, gaining a low-tax base for international expansion.Buying the Dublin-based business allows Perrigo, based in Allegan, Michigan, to re-domicile itself in Ireland, where the corporate income-tax rate is 12.5 percent.

5.Meanwhile in China, Xiang Gang who is the top stock market regulator has been spotted in public with significant graying of the temples. Whether its because their market has fallen 25% since January 2010 and is the worst performer or whether its trying to balance the 700 companies seeking to list against the new austerity and new rules to protect investors…Judging by the market performance they need protecting!

6.Beadell Resources: reported production of 36,179 ounces of gold for the June quarter at a cash cost of $US679 an ounce. The company has guided for production of between 120,000 and 130,000 ounces for the remaining six months of calendar 2013.

7.OZ Minerals: has flagged a $200-240 million write-down on the carrying value of its Prominent Hill copper and gold miner in South Australia as a result of falling metals prices. The impairment is subject to further work to confirm the amount and to review by the company’s auditors as part of the process of finalising its financial year 2013 accounts, which will be released on August 14

8.Few things today to kick off reporting season…Woolworths fourth quarter sales…..ALS annual general meeting….Drillsearch Energy quarterly report….Navitas full year results.

9.Looks like there’s trouble at Maccas in the US as the Fast Food workers are on strike and demanding  100% wage rise from 7.25 an hour to 15 bucks…apparently they cant even afford to eat in their own outlets!!

10.And in yesterdays afternoon report I wrote about the cost of a bypass in India compared to the US…well heres’ a chart of the relative costs…and you wonder why the US has a $16 trillion dollar problem…

And finally……thanks Barry!!

An Irishman was terribly overweight, so his doctor put him on a diet.

‘I want you to eat regularly for 2 days, then skip a day, then eat regularly again for 2 days then skip a day … 
And repeat this procedure for 2 weeks.

The next time I see you, you should have lost at least 5 pounds.’

When the Irishman returned, he shocked the doctor by having lost nearly 60 lbs!

‘That’s amazing!’ the doctor said, ‘Did you follow my instructions?’

The Irishman nodded … ‘I’ll tell you though, be all the saints, I taut I was gonna drop dead on dat tird day.’

‘You mean from the hunger?’ asked the doctor. 

’No, from all dat bloddy skippin!’

Have a great day

Clarence

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