After a tentative start to the session, things perked up immeasurably on the Chinese Inflation data and the feeling that China is well and truly on the mend. The celebrations for Abbott’s victory were more than outweighed by the moves in Asia. Tokyo rejoiced in winning the 2020 Olympics, whilst China is heading for its highest close since June. Our market struggled out of bed with a post election hangover but by the close had put on an impressive 36 points to close at 5181.
As usual the main thrust came from the financial sector which also basked in good local figures on the mortgage front. National Australia Bank Limited (A$33.18, +1.3%) and Westpac Banking Corporation (A$31.93, +0.9%) led the way whilst other stocks like Suncorp Group Limited (A$12.77, +1.6%) ,Insurance Australia Group Limited (A$5.61, +1.1%) and QBE Insurance Group Limited (A$15.73, +2.6%) also had a good day. In industrial land Woolworths Limited (A$34.62, -1.7%) was ex dividend today whilst Wesfarmers Limited (A$40.82, +1.0%) continued to push higher ,Telstra Corporation Limited (A$4.83, +0.6%) gained a little despite some concern about what an Abbott Government means for them. Under some pressure again today were Brambles Limited (A$8.76, -2.1%) following their disappointing results some weeks ago. Media stocks were better as they celebrated their role in the LNP victory Seven West Media Limited (A$2.40, +2.6%),Twenty-First Century Fox, Inc. (A$35.00, +0.5%),Fairfax Media Limited (A$0.555, +0.9%) and Ten Network Holdings Limited (A$0.335, +4.7%).Retailers also took heart hoping for improved consumer sentiment so for REA Group Ltd (A$38.40, +1.7%) better on housing joys and JB Hi-Fi Limited (A$19.44, -0.4%),PMV#,AP Eagers Limited (A$4.99, +2.9%),David Jones Limited (A$2.85, +0.4%) and Kathmandu Holdings Limited (A$2.45, +1.7%) all awaiting some wallet loosening.
In resources, Gold shares were sharply better given the rise in the metal and other commodity stocks also firmed.BHP Billiton Limited (A$35.64, +1.4%),RIO Tinto Limited (A$61.95, +1.4%),Newcrest Mining Limited (A$13.24, +3.4%) and Orica Limited (A$20.42, +2.6%) all to the good with Goldies like Silver Lake Resources Limited (A$0.885, +4.7%),Evolution Mining Limited (A$0.895, +5.9%), Kingsgate Consolidated Limited (A$2.06, +5.6%), St Barbara Limited (A$0.71, +5.2%), Regis Resources Limited (A$4.30, +2.6%) and Beadell Resources Limited (A$0.885, +6.0%) all doing well. Energy stocks also did well with Origin Energy Limited (A$13.96, +0.8%),Oil Search Limited (A$8.53, +1.5%) and Caltex Australia Limited (A$18.98, +0.9%) in the black whilst Woodside Petroleum Limited (A$39.20, -0.1%) remained pretty much unchanged.
Big grinners today included Mount Gibson Iron Limited (A$0.83, +8.5%),Senex Energy Limited (A$0.825, +6.5%),Evolution Mining Limited (A$0.895, +5.9%),Qantas Airways Limited (A$1.37, +3.8%),Ten Network Holdings Limited (A$0.335, +4.7%) and Seven Group Holdings Limited (A$8.14, +3.7%) whilst stuck in the naughty corner were McMillan Shakespeare Limited (A$12.68, -5.4%),Monadelphous Group Limited (A$19.90, -3.9%),Trade Me Group Limited (A$3.91, -1.3%),Envestra Limited (A$1.115, -2.2%) and BKI.
Volume was again none too flash at around $3.2bn. Must try harder B-
Asian markets celebrated Tokyo’s Gold medal performance rising 2.5% and in Shanghai the markets showed a clean pair of heels rising nearly 3.2%.
Stocks and Stories
Cash Converters International (A$1.23, +0.8%) is seeking to raise $50 million to $60 million through an issue of corporate bonds to repay part of the group’s existing debt and to fund further investments.
The number of home loans approved in July rose 2.4 per cent, official figures show.
There were 52,204 approvals in the month, compared to 50,983 approvals in June.One of the problems though is that most of the loans are for investors.With rates low,SMSF also allowed to now buy property and the share market not trusted to some extent,all that deposit money is now chasing the housing market.Good for banks.Good for mortgage brokers.Not good for affordability though.
Job advertisements have declined further, dropping 2.0 per cent in August after falling 1.1 per cent in July.They are now only 5% above where they were during the GFC.
Whilst in China, the inflation Dragon seemed to have been vanquished with its annual consumer inflation up 2.6 % in August, in line with market expectations.
Japanese GDP revision also helped things along today with first quarter growth now said to be more like 3.8% rather than 2.9%.
Tomorrows News Today
Expect Euro markets to open slightly better on the Asian leads and Chinese inflation and export growth in particular.
It’s going to be a defining week for the ‘Pres’ as he seeks to persuade Congress that he is right in attacking Syria.6 TV interviews today and then an address to the nation on Tuesday! The numbers seem stacked against him at the moment and although he could go it alone, looks like he will try for bi-partisan support for his own adventure. Interesting to see what he does if he loses that support!
Appears the German newspaper Bild has found evidence that Al Assad knew nothing about the chemical attacks.
Neiman Marcus, the US luxury retailer that filed for an initial public offering in June, is close to an agreement to sell itself to Ares Management and the Canada Pension Plan Investment Board for $US6 billion.
It seems that the physical demand for Gold is starting to slide and be replaced by the ETF buying. Perth Mint today announced Gold sales tumbled in August. Sales of gold coins and minted bars dropped 46 per cent to 30,430 ounces last month from 56,488 ounces in July, according to data from the mint. Demand in August was 73 per cent lower than the pace in April, when bullion started its slide.
The UK seems to be experiencing a Golden period of economic recovery at the moment with low interest rates feeding into house prices and the best growth since the 90‘s. Big question is,is this sustainable or the death throes of a dying economy propped up by loads of free money. George Osborne, the Chancellor, thinks he has saved the day and victory is within sight on the economy. However before he gets carried away, worryingly studies show that four in every five jobs created since 2010 have been in low-pay sectors.
Greek PM has declared crisis over. He reckons it is on track to regain pre crisis levels. And he said it with a straight face too! A true Peace in our time moment!”