‘Twas the night before the night before the election and all around the house nothing was stirring except Clive Palmer’s sideshow .Few nerves pre Saturdays Coalition whitewash were in evidence today, as the market ignored the positive leads from Overseas and did its own thing. Concerns about Syria probably didn’t help! Volume was on the low side to say the least as we wait for Saturday’s Abbott Blitzkreig. After a mildly positive opening we slipped to be nearly 1% off before the rally to close only 19 points down at 5142, after the current account numbers helped sentiment. Computers were active, real investors less so. The biggest losers were the banks as their subordinated debt credit ratings were downgraded to slippery at best. National Australia Bank Limited (A$32.74, +0.5%) bucked the trend, as the other three fell, as they are leveraged to the rapidly recovering UK economy. Macquarie Group Limited (A$45.50, +1.0%) also bucked the trend as did Bank of Queensland Limited (A$9.97, +1.9%) The evil twins Wesfarmers Limited (A$40.20, -0.7%) and Woolworths Limited (A$35.33, -0.7%) were a little easier as were Telstra Corporation Limited (A$4.82, -0.6%) as doubts on the NBN going forward weighed on the stock. Insurance Australia Group Limited (A$5.54, -5.3%) was ex-dividend today and wealth managers eased with Platinum Asset Management Limited (A$5.67, -0.5%), Perpetual Limited (A$38.68, -2.0%),Bt Investment Management Limited (A$3.75, -1.3%),Henderson Group PLC. (A$2.98, -0.3%) and HFA Holdings Limited (A$0.725, -2.7%) the worse.
In resource land BHP Billiton Limited (A$35.28, -0.7%),RIO Tinto Limited (A$61.19, -0.6%) and Fortescue Metals Group Ltd (A$4.42, unch) mopped around all day like a teenager that has had his Playstation taken away. They were well off their lows but threatening to break down all the same. Bit like the teenagers.
In airline stocks Qantas Airways Limited (A$1.33, -2.2%) and Virgin Australia Holdings Limited (A$0.415, -1.2%) both suffered as Ryanair in the UK announced a shock downgrade to earnings due to frantic competition. Other industrials were better Brambles Limited (A$8.96, +0.7%),Downer EDI Limited (A$4.50, +4.7%),Seek Limited (A$11.43, +1.6%),Sonic Healthcare Limited (A$15.49, +2.0%),Ramsay Health Care Limited (A$36.94, +2.4%) and more warm and fuzzy feelings in mining services led by Boart Longyear Limited (A$0.495, +3.1%),Bradken Limited (A$6.23, +1.6%),Mastermyne Group Limited (A$0.98, +7.7%),ALS Limited (A$9.77, +2.0%) and Monadelphous Group Limited (A$20.59, +3.4%).
Big cheesy grinners today included Downer EDI Limited (A$4.50, +4.7%),McMillan Shakespeare Limited (A$13.67, +4.0%),Qube Holdings Limited (A$1.95, +3.2%),Seven Group Holdings Limited (A$7.88, +3.7%),ALS Limited (A$9.77, +2.0%),Trade Me Group Limited (A$3.95, +3.7%),Monadelphous Group Limited (A$20.59, +3.4%) and #CIN# whereas the days losers included Medusa Mining Limited (A$2.48, -7.5%),Oceanagold Corporation (A$1.805, -6.0%),Buru Energy Limited (A$1.765, -3.8%),Bluescope Steel Limited (A$5.16, -3.6%) and Acrux Limited (A$3.11, -3.1%).
Volume was rain affected, Kevin’s Reign that is, at around $4bn.
Around the grounds we saw the rest of Asia mildly positive with only New Zealand (Bondi) slightly down and the Philippines in the red too.
Stocks and Stories
Newcrest Mining Limited (A$13.20, -1.5%) announced the results of their inquiry into the selected briefings and the wholesale psychic powers of a large swathe of the broking community to all downgrade at exactly the same time. Not convinced Maurice has cleared them really of any wrong doing but maybe this is a lesson for others. Would just be really easy to require companies to record all their analysts briefings in case there were problems in the future. I mean if the NSA can monitor all our emails and text etc. this should be a breeze. There’s probably an app for it anyway, selling for 99 cents!
RIO Tinto Limited (A$61.19, -0.6%) has been busy showing analysts round its Pilbara Iron Ore business and they all seem to have come away with RIO backpacks full of optimism that cost cutting and production increases are easily doable.360m tonnes and $5bn of cost savings by the end of 2014.Simples.
In economic news Australia’s trade balance has dived into the red, posting a deficit of $765 million, a big turnaround from a surplus of $243 million in June. Analysts had expected a surplus of $100 million in June.
Australia’s manufacturing activity ranks among the lowest in the world, after the Australian Industry Group’s Performance of Manufacturing Index marked its 26th consecutive month of contraction in August.
In fact, we’re worse off than Greece, with its PMI rising to a 44-month high at 48.7, compared with ours sitting at 46.4.
Iron ore exports to China from Port Hedland, which handles about a fifth of the global seaborne market for the steel-making raw material, rose 9 per cent in August from July.
Ore shipments of 22.3 million tonnes, the second highest on record, were up a hefty 33 per cent on August last year and not far from all-time highs hit in May.
Tomorrows News Today
Finally the Coalition has released its costings and spending plans. After scaring everyone that there is a budget crisis,it certainly doesn’t seem like they are doing a lot to solve the crisis! Crisis what Crisis? Methinks, looks like the makers of Cadburys choccies in Hobart will be the biggest winners out of all this huff and puff!
And in more big news Serial streaker Wati Holmwood has been sentenced to three months’ jail following his naked 90-metre dash during the third State of Origin match at Sydney’s ANZ Stadium. He had nothing on but a smile. Not now though. May need to keep his clothes on in the big house! Where’s the soap?
Especially bubbly was India as the SENSEX surged the most in Asia, led by the biggest rally in lenders since May 2009, after central bank Governor Raghuram Rajan outlined plans to bolster the financial industry and stabilize the rupee. HDFC Bank India’s largest lender by market value surged 6.7 %! Good start to his new job!
Apple has announced it will make an announcement in tandem with China on 11th September. New iPhone, iPad or an iDeal with China Mobile..or all three?
And Kill Bill…PIMCO the World’s largest Bind fund is losing money faster than a Nathan Tinkler ,the fund has now lost $US41bn of its assets in the past four months through withdrawals and price losses Assets have shrunk by 14 per cent to $US251 billion at the end of August from $US292 billion at the end of April.
Big few days for US unemployment with ADP’s private sector payroll number. and weekly jobless claims early Thursday morning. And nonfarm payrolls on Friday.
As widely expected the BOJ kept its hand steady on the tiller with a much the same policy setting. They also revised up their growth expectations as the economy recovers.
Spare a thought for poor old David Cameron who will not get an audience with Obama this weekend at the G20. POTUS will instead be playing with his new best friend Francoise Hollande and hanging with the Frogs. Nothing upsets an Englishmen more than that, so expect now the UK to invade Spain just to get their attention. They have form in this! That will sort out Gibraltar!
So did you miss me?