Market Review

Another day of whoosh out of the blocks as the market powered to a 40 odd point gain before the Chinese PMI numbers. Seemed the market like what it heard from Uncle Ben. Free money to continue and rate cuts from the RBA made everything look cheap. The Aussie dollar below 90 cents also helped resources. But then came the quick one/ two of disappointing PMI, well the official one was ok but the HSBC one wasn’t ,and then we got the biggie. News started filtering out about the Kev13 update on the economy tomorrow and the whack for smokers didn’t seem to be the only thing on the Government agenda. A tax on bank deposits! Wong move. Yikes, not more taxes. A thinly disguised super profits tax perhaps. A revenue grab. A way of funding future bailouts or just kite flying. We will know soon but it was enough to put the wind up bank shares. From good gains to big losses and then rallied again. And with it the market, closing pretty square until the 4.10 match out when we put on a quick 10 points to close at 5061. So big range today on the index of over 60 points as the big green bank blob turned red. The rest of the market was a sea of green, skies of blue as the only blemish appeared to be banks, #CBA# the worst, followed by #NAB#,#WBC#,#ANZ# and #SUN#. Other financials had mixed fortunes with #MQG# down a bit but US dollar exposed #QBE# had a nice day out. #BHP# broached $35,whilst #RIO# ,#WPL#,#FMG#,#STO# and #TLS# all did well.

In the sectors Energy was firm as punters were attracted to #WPL# US dollar dividend yield. Healthcare also better with #CSL#,#RMD# and #SHL# firming.But the #COH# story fell on the proverbial today . Industrials in the green with #TCL#,#BXB#,#AMC#,#LEI# and #SEK# the standouts. However #JBH# down a tad as were #PBG#

So to the winners and losers. On the podium today were #HTA#,#MGX#,#LNC#,#MGX#.#HGG# and #MMS# while in the naughty corner were #COH#,#SIR#,#PTM#,#PBG#,#SGM# and #MND#.

Volume was better as the computers kicked in and sold the banks down, then bought them all the way back up again. Not sure much of it was real business from real people but what is these days! It is said that whatever the market does on the first day of the month will set the scene. Hope not. Small up! Could be a long month!

Stocks and Stories

Big news today from #AMC# as they look to jettison their Australasian Business. Sorry did I say jettison, I meant demerge. Slight positive for the stock but not sure it says much about the prospects downunder.

 

In reporting land #SUN# announced last night a special dividend and a not so special performance from its life business and general insurance business was underwhelming. Elsewhere #TCL# reported a doubling of profits and the toll on the M2 has now risen to over 6 bucks. Crikey! Sure that will please commuters from the North west faced with higher petrol, higher tolls.

 

In house stocks today, #LNC# rose after their quarterly. We also had news from #COK# with their Baralaba expansion. It’s now a prescribed project. #KAR# also announced a resource upgrade. Didn’t do much for the share price though.

 

Up in the air was #XRO# which reported today it was looking at bigger losses due to aggressive expansion plans as it takes on the world. Stock has doubled this year.

 

Chinese official PMI came in unexpectedly better and above 50 which is the first piece of good news out of China for some time. Unfortunately the unofficial HSBC one was weaker than expected and showed the slowdown was continuing. Which one is right?

 

In local economic news, the manufacturing index dropped 7.6 points to 42 last month, the biggest decline since April, the Australian Industry Group said in a survey released today. The last reading above 50, the divide between expansion and contraction, was in February 2012.Now the RBA starts to worry. May have left it a bit late.

 

The Australian Bureau of Statistics has revised down a key measure of underlying inflation after discovering an error in the data, suggesting there might be even more scope for interest rate cuts to stimulate the economy.The ABS said it has revised down the weighted median measure of consumer prices to show a rise of 0.6 per cent in the second quarter, from the originally reported 0.7 per cent.

 

Tomorrow’s News Today

 

Shell Q2 CCS adjusted earnings of $4.6 billion versus $5.75 billion forecast

 

Good to see that Kev13 now has his two sons advising him as part of the “Get Tony Team”. Good to keep all those fees in the family. Eddie was pretty good at that too.

 

And what do they say about power? Greg Pearce has been sacked from the NSW Gov for a conflict of interest. Really? Don’t these guys learn.

 

‘Faceplant’ has confounded the critics and for the first time it is above its float price. It’s up 40% in a matter of days to $38! Maybe Myers could do the same one day?

 

And in a land far, far away, Greece, the pace of change in the civil service is truly glacial! Disciplinary hearings, which often drag on for many months, are now to be wrapped up in two to four months. The government wants to remove from the public payroll any civil servants found guilty of committing offenses. At the end of June, 1,920 cases, including appeals, were being examined by disciplinary panels.

 

It’s good to be the king! Societe Generale SA, France’s second-largest bank, said second-quarter profit more than doubled, beating analysts’ expectations, helped by a surge in corporate and investment-banking revenue.Net income in the three months through June rose to 955 million euros ($1.27 billion) from 436 million euros a year earlier

 

We are constantly being told of green shoots in the Zombie zone and how things are improving. True they may not be quite as bleak as a few months ago but it’s going to take a while. there are an estimated 26.424 million men and women out of work in the European Union, and 19.266 million were in the euro area. Unemployment is falling slightly but not in the youth segment.

 

Couple of other big items out of Europe .After seven months of ducking and diving, Spain’s prime minister, Mariano Rajoy, will on Thursday answer questions in parliament about allegations that he and his party received illegal payments from big business in return for favourable treatment .Plus we get to here if Berlusconi is ‘Colpevole’ or ‘Innocente’. Hardly surprising we hate politicians! And the IMF is warning on losses from the Greek bailout again.

 

And is it just me or does the news that Kev13 will spend $30m on adverts for his PNG stop the boats policy, seem obscene. Surely we all know by now. You would have to be the Pinball Wizard to not know what’s happening. Sure all those people smugglers will be watching Channel Ten! Seriously!

 

Ashes starts again tonight. Will the Aussie dollar follow the team’s fortunes I wonder?

 

That is all

 

Clarence

XXXXX

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