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Morning all,

Last night we saw more backing and filling in the US as the numbers were positive..thus reviving the fears of the winding back of the free money..all the news coming out of US and even Zombieland is showing positive signs and in the US accelerating even. So the theory is September is the start of a gradual and I mean very gradual tapering of free money..if they take the patient off the crack too quickly the withdrawl symptoms won’t be fun!

Does feel like the Dow is a little tired though and may need some more consolidating before the fall rally.

And so to our market as interest rates tumble to their lowest ever…now it used to be that the low rate was a good thing…remember the Coalition saying that rates would be higher under labour…well have a look Hockey…of course the real problem is the economy is stuffed!The great transition that Uncle Fester wants us to believe will happen..won’t because there is nothing left to transition after the RBA missed their chance to get the dollar down sooner..in fact yesterday the dollar actually rose as now there is a though that this is the end of the rate cuts! Banks moved quickly to cut mortgage rates..will be a lot slower on business and credit cards I suspect but mortgages always grab the headlines..although only 1/3 of Australians have mortgages! Poor old depositors eh!!Anyway as the deposit rates fall the attraction of the share market will become irresistible…there is a record amount of cash sitting on the sideleines and so the theory goes, espoused by high profile(god knows why) commentators like Charlie Aitken that this money will come flooding into the market..seem to remember that theory from the 80’s…then it was a tsunami of Japanese cheap money looking for a home…anyway inevitably some of it will find its way into the market as deposits get squeezed…the ususal suspects will be the winners..banks,TLS,maybe WPL and BHP and RIO together with other high yielders .

So today..a bit of weakness perhaps ..we were so keyed up for the rate cut ,everyone has got set and with the level of interest this low in the market it’s hard to see who is going to dive in..election is the issue..these guys are not even spending like drunken sailors anymore..more like a drunk Premier league ,manager in the transfer season!

We will ease 20 early and then probably stay there …

And to give you a sense of the level of ho hum ness in the market here’s a list of today’s broker calls…

  Virgin Australia cut to underweight at JPMorgan, Morgan Stanley

  Alacer Gold cut to sector perform at RBC Capital

  Jetset Travelworld cut to underweight at Morgan Stanley

  Wotif.com cut to underweight at Morgan Stanley

  Qantas downgraded to equal weight at Morgan Stanley

  iinet cut to underperform at Credit Suisse

  Tatts Group cut to neutral at Bank of America Merrill Lynch

  Amcor raised to buy at Citi

  ASX raised to overweight at JPMorgan

Ideas of the Day

Competition is fierce now in the only money lending business in town..homeloans..see the banks are happy to lend in a rising market because if you don’t pay your repayments then they get the house and the asset is going up..easy right, so it becomes self fulfilling as they lend more and prices get pushed up..great spiral..until something goes wrong..ie GFC…so who wins out of all the mortgage money being sloshed around..well I reckon that Mortgage Choice started by my good friend Peter Higgins and his brother Rod are in a great place..good yield, takeover target for distribution and dividend coming up…figures too…so although I have been fan for a while I reckon it’s not too late…anything around 2.40 and under should be rewarded over time…

My little ADJ fell 4% yesterday after a 10 % rise the previous day..they are thin but do like the potential of this one..teh important thing is to have supply for agencies to buy banner ads from..they have 640 publishers now signed up…that is the key..would be nice to get 1000 by Xmas..that’s the thing to look for.

Things to make me go mmmmm!

1.Good to see the election bribes in full swing…Abbott has announced a company tax cut..bit confused though wasn’t he putting a levy on companies to pay for paid parental leave…give and take then…strange days indeed..

2.If you haven’t seen it the doorstop that Jaymes Diaz,the candidate for Greenway, did yesterday with the Channel Ten reporter is absolute gold…6 points to stop the boats…be good if he could have remembered at least one of them! The best bit is when it dawns on him that his political career is well and truly over before it has even started!

3.US housing is going gangbusters… Home prices (including distressed sales) climbed 11.9% year-over-year in June, according to CoreLogic’s latest home price report. This is the sixteenth straight monthly rise in home prices. Prices were up 1.9% month-over-month. Fastest pace since 1977!

house prices

Last night Obama told an audience where house prices are heading!!

Obama Housing 2

I caught a fish and it was this big!!!

4.The U.S. trade deficit narrowed more than forecast in June to the lowest level since October 2009 as crude oil imports declined and American companies shipped more goods abroad, showing second-quarter growth was stronger than initially estimated.

5.Cochlear says it has a strong product pipeline that will drive growth in the new fiscal year, despite sales in the key region of the US falling 4 per cent over fiscal 2013. Cochlear did not provide any full-year guidance but pivotal to the company’s success in fiscal 2014 will be the take up and acceptance of its newly launched Nucleus 6 sound processor, currently being rolled out in Europe. Regulatory approvals in other jurisdictions are anticipated during the year

6.This guy is speaking sense… MD Ted Pretty of Hills Holdings says official interest rates cuts aren’t relevant this time around as the local economy struggles and confidence ebbs away. “I’m not sure that what used to be axiomatic, rates get cut, everybody gets happy, I don’t think it applies this time,’’ Mr Pretty said that with unemployment rising and low levels of activity in the economy, the impact of a cut in rates was blunted.

7.21st Century Fox  has reported annual income of $US6.82 billion in the 2012-13 financial year, up from $US3.18 billion in the previous year. The result included $US3.76 billion of income primarily related to gains in the purchase of additional stakes in Sky Deutschland and ESPN Star Sports.

8.No one could ever accuse Lord Rupert of sitting on the fence come election time..apparently now he has split with Wendy he doesn’t have to pander to her left wing mates…so that’s why we have the Telegraph!

9. The US government filed two lawsuits against Bank of America relating to fraud on $850m (£553m) of mortgage-backed securities.

10.And in a new move from the Old Lady in Threadneedle Street.. “The new governor of the Bank of England, Mark Carney, is set to unveil a new strategy of “forward guidance”. Under the strategy, the Bank will periodically promise to keep interest rates at a particular level, until certain economic conditions are met.With short-term interest rates already at historic lows, the idea is to reduce longer-term interest rates.At its heart, forward guidance is a tool for boosting confidence.”Let’s hope he has done a plain speaking course or this will be as hard to read as Helicopter Ben!!

And finally……….

Thanks to all that have donated to my City to Surf charity…now have nearly $1,000 so good stuff…looking forward to completing it on Sunday even with a dodgy hamstring…Heartbreak Hill should be fun!!Love to get to 1500 bucks by Sunday if you are feeling generous…here’s the link.. https://city2surf2013.everydayhero.com/au/henry-jennings-1

And of course todays joke….

My budgie broke his leg today so I made him a little splint out of a couple of redhead matches.

His little face lit up when he tried to walk… unfortunately, I had forgotten to remove the sandpaper from the bottom of his cage.

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.

Get a Global take on things at www.ntmarkets.com

Get a Global take on things at http://www.ntmarkets.com

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