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Morning all,

Just a quick note today as I am out of the office for a couple of days. A very strong day yesterday as fears over Syria recede and the better than expected Chinese manufacturing data helped confidence. I was a little surprised with the strength but the US was closed so maybe that also helped. Zombie markets rallied strongly as well last night as they breathed a sigh of relief over imminent posturing from the coalition of the unwilling. Today then we will breech 5200.That has been my target for those that have been paying attention. We have rallied from 4650 to 5200 since Kev13 slipped on his slippers that say ‘Pres’.

Its been quite a ride..Reporting season has come and gone…whilst it has been tough in patches its pretty much exceeded expectations, before Impairments that is…on Sunday we will have ‘Tone13’ despite his lack of ticker and not appearing on Q&A. Guess its hard to stuff up if you are a mirage! So the question is will we kick after the election result. I am still of the view that up here at 5200 we need a rest..the risks to my mind are building and although I remain positive longer term feel like we could see some weakness in the next month or so..so much optimism is built in…now I have been advocating buying some puts..that does not mean I think we will have an end of the world experience just like I insure my car and don’t think that I am going to have the mother of all crashes straight away..its called insurance..it helps you sleep at night..if you have a portfolio that needs some insurance it may be a good time to look at it…

Gold slipped, metals up a bit, Iron Ore and Oil up a bit too..SPI up 24…expect a 5200 breech today!! Asian Futures are stronger and Nomura is saying that the crisis in emerging markets has finished!

Idea of the Day

Our analyst is quite keen on AGO, despite the disappointing number ,he thinks that this is masking a good underlying business and every day that Iron ore does not  go down is a big bonus…tend to agree with him on this one and at around 79 cents its worth a look..

  • We see Atlas as the company that is least understood, and which has the most potential to deliver major perception altering structural changes.
  • It has around 45mtpa of port capacity allocation, and would be a major beneficiary of any rail restructuring in the Pilbara.

We see rail as the key, and expect positive news on that front in the next 6 months.

I think you will get most bang for your buck on resource stocks in the next three months if we believe the Chinese numbers…low dollars, cost cutting taken place and projects deferred is all positive for resources!And the sentiment has been against them for so long!

 

Things that make me go mmmm..

Now I know that with the US going it alone (or with the French,same thing really) the urgency seems to have gone from the Syria thing and that has helped confidence but I think that the Russians questioning the evidence is actually increasing my concern..if the US does strike followed by the French then the Russians are not going to be happy..let alone the Syrians!! So maybe the risks are actually increasing of a wider issue than just a quick Tomahawk strike and say good night Al-Assad!…from a money perspective maybe Gold is not such a dumb idea!!

G20 meeting this weekend is going to be a doozy!!!Not sure Russia and the US will be teeing off in the same group!

RBA Meeting today-expect no change in the rate.

Billabong has declared it will push ahead with recapitalisation plans after a last-minute attempt to force a board spill from US-based investor Coastal Capital International. In a statement to the ASX, Billabong said it had received a request from Coastal, which has a 5 per cent stake in the company, to convene a general meeting of shareholders to vote on the sacking of all directors with the exception of company founder Gordon Merchant and long-time supporter Colette Paull, and the appointment of Coastal nominees to the board.

WOODSIDE and its Browse partners have officially selected floating liquefied natural gas technology to develop the gasfields north of Western Australia.The company said yesterday the groups involved in the project — Shell, BP, Japan’s Mitsubishi and Mitsui, and PetroChina — had agreed to progress the basis of design work on a concept using Shell’s FLNG technology.

Vodafone is to sell its 45% stake in Verizon Wireless to Verizon for $130bn in cash and stock, subject to regulatory approvals, comprising $61.4bn in cash and assumption of net liabilities, $60.2bn in stock (within a $47-51 per share collar), $5bn in a VZ loan note and $3.5bn ascribed to VZ’s 23.1% stake in Vodafone Italy. As the WSJ reports, this is the second-largest ever behind another Vodafone deal – the $172 billion acquisition of Mannesmann AG in 1999 (which is somewhat ironic in its largesse and timing).

Few events to watch out for in September..

  • Sept. 5: BoE, ECB announce monetary policy decisions
  • Sept. 6: U.S. Aug. change in nonfarm payrolls
  • Sept. 9: Italy Senate committee to start debate on Berlusconi’s expulsion after his tax-fraud conviction
  • Sept. 13: Euro-area finance ministers meet
  • Sept. 16: Portugal EU/IMF aid review mission starts
  • Sept. 18: FOMC meeting with rate decision and economic projections being released
  • Sept. 22: Germany holds federal election
  • Sept. 29: Portugal holds municipal elections

when sept

Prime Minister Shinzo Abe faces rising pressure to expand tax relief for Japan’s companies after the longest slump in business investment since 2009, setting up a potential battle with the Finance Ministry. Officials will unveil tax breaks for capital spending in coming months, a step Finance Minister Taro Aso has backed.

And following on from China’s Flash PMI reading at the weekend..Zombieland had their own..interestingly the big feel good gains were in the dog economies of southern Europe..

  • German Final PMI 51.8, down from 52.0 flash, and below expectations of 52.0
  • French Final PMI, 49.7, same as the flash reading and expectations
  • Italy Final PMI, 51.3, up from 50.4, and higher than the 51.0 expected: this was the highest since May 2011
  • Spain Final PMI, 51.1, up from 49.8: the highest since March 2011
  • Greek Final PMI 48.7, up from 47.0 – the highest in 44 months.

And finally…this from the very funny John Cleese on the Syrian situation..

The English are feeling the pinch in relation to recent events in Syria and have therefore raised their security level from “Miffed” to “Peeved.” Soon, though, security levels may be raised yet again to “Irritated” or even “A Bit Cross.” The English have not been “A Bit Cross” since the blitz in 1940 when tea supplies nearly ran out. Terrorists have been re-categorized from “Tiresome” to “A Bloody Nuisance.” The last time the British issued a “Bloody Nuisance” warning level was in 1588, when threatened by the Spanish Armada.

The Scots have raised their threat level from “Pissed Off” to “Let’s get the Bastards.” They don’t have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years.

The French government announced yesterday that it has raised its terror alert level from “Run” to “Hide.” The only two higher levels in France are “Collaborate” and “Surrender.” The rise was precipitated by a recent fire that destroyed France ‘s white flag factory, effectively paralyzing the country’s military capability.

Italy has increased the alert level from “Shout Loudly and Excitedly” to “Elaborate Military Posturing.” Two more levels remain: “Ineffective Combat Operations” and “Change Sides.”

The Germans have increased their alert state from “Disdainful Arrogance” to “Dress in Uniform and Sing Marching Songs.” They also have two higher levels: “Invade a Neighbour” and “Lose.”

Belgians, on the other hand, are all on holiday as usual; the only threat they are worried about is NATO pulling out of Brussels ..

The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy.

Australia, meanwhile, has raised its security level from “No worries” to “She’ll be right, Mate.” Two more escalation levels remain: “Crikey! I think we’ll need to cancel the barbie this weekend!” and “The barbie is cancelled.” So far no situation has ever warranted use of the last final escalation level.

Have a great Tuesday

 

Clarence

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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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