Henry Jennings’s Market Wrap

Alice Cooper got it right, ”Feds out for Summers!” Seems the shock announcement this morning that “Lounge Lizard” Larry would be withdrawing from contention for the top printing job in the World has been greeted by the markets with boundless optimism that the free money will now last forever under the Dovish guidance of Uncle Ben or maybe Aunty Janet. The market was catapulted ahead on the news hitting 5266 before settling back at 5248 up 28 points.Financials were as usual in demand although Westpac Banking Corporation (A$32.13, +0.1%) fared worse than National Australia Bank Limited (A$34.10, +1.7%) and Commonwealth Bank of Australia (A$74.05, +0.3%) whilst QBE Insurance Group Limited (A$15.00, -1.0%) fell.

In resource land BHP Billiton Limited (A$36.27, +0.2%) led from the front with RIO Tinto Limited (A$63.40, +0.5%),Iluka Resources Limited (A$11.66, +2.7%) and Fortescue Metals Group Ltd (A$4.58, +0.4%) also doing well as did Atlas Iron Limited (A$0.905, +4.6%). Gold stocks were a little firmer as the metal perked up on a lower US dollar and more printing to come!Newcrest Mining Limited (A$12.63, +5.1%) was the big winner with others like Kingsgate Consolidated Limited (A$1.79, +5.6%),Silver Lake Resources Limited (A$0.805, +6.6%),Beadell Resources Limited (A$0.815, -0.6%),Evolution Mining Limited (A$0.845, +4.3%),St Barbara Limited (A$0.61, +1.7%) and Regis Resources Limited (A$4.00, -0.5%) bringing up the rear. Energy stocks were also better despite oil coming off the boil due to the US-Russian accord on Syria.Woodside Petroleum Limited (A$38.88, +1.0%),Oil Search Limited (A$8.66, +1.9%),Santos Limited (A$15.10, +0.9%) and Karoon Gas Australia Limited (A$5.17, unch) especially in demand.

Media stocks were mixed with Ten Network Holdings Limited (A$0.32, -4.5%) taking a bashing after the latest ratings for ‘The Bachelor’ were in. Seems only the main man’s Mum is watching now!REA Group Ltd (A$38.58, +3.9%) continued higher as did Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$5.95, +1.5%) on the bid from Bega Cheese Limited (A$3.42, +3.6%).

Consumer stocks were also better today with the big two Wesfarmers Limited (A$41.75, +0.3%) and Woolworths Limited (A$34.99, +0.5%) up again with retailers also finding some “Karching” in their tills JB Hi-Fi Limited (A$20.42, +2.4%), and Harvey Norman Holdings Limited (A$3.18, +0.3%) the best of the bunch. Telstra Corporation Limited (A$4.91, +0.6%) also pushed higher as they look to be a winner from Tony Abbott’s Brave New (considered) World.

Asian markets were similarly impressed with the sound of Summers up around 1% on average.

Popping the champagne corks today were Lynas Corporation Limited (A$0.43, +6.2%),Ausdrill Limited (A$1.745, +4.5%),Newcrest Mining Limited (A$12.63, +5.1%),Kathmandu Holdings Limited (A$2.67, +5.5%),Energy World Corporation Ltd (A$0.45, +4.7%),Evolution Mining Limited (A$0.845, +4.3%) and Bega Cheese Limited (A$3.42, +3.6%) whilst confined to drinking homebrand UDL’s were Hutchison Telecommunications (Australia) Limited (A$0.043, -4.4%),Yancoal Australia Limited (A$0.65, -4.4%),Breville Group Limited (A$8.57, -3.3%),Ten Network Holdings Limited (A$0.32, -4.5%),Sirius Resources NL (A$2.89, -3.7%) and Paladin Energy Ltd (A$0.56, -1.8%). Volume was pretty typical for a Monday and again on the low side.

Stocks and Stories

Westfield Group (A$10.96, +1.1%) will sell seven malls in the US for $US1.6 billion to an affiliate of Starwood Capital Group, the investment firm led by Barry Sternlicht.

Lynas Corporation Limited (A$0.43, +6.2%) made a full year loss of around $1076m worse that last years $102m but crucially it did receive its first revenue of $900,000 from sales of Rare Earths.

G8 Education Limited (A$3.20, +2.2%) continued their push for the summit with news on some new childcare centres settling at Jannali and Waterford.

Tomorrows News Today

Expect US markets to celebrate the end of Summers and push to an all-time high before the FOMC meeting this week. Zombieland markets will also do well today as you would expect.

Britain’s top companies have boosted cash holdings by more than a third in the past five years, opening the door to future acquisitions or bumper shareholder returns, research showed on Monday. Gross cash holdings of FTSE 100 companies have risen by 42.2 billion pounds ($72.19 billion) since 2008, according to research by Capita Asset Services.

Meanwhile in the UK the property bubble is being pumped up again with leading real estate web site right move now forecasting house price rises of around 6% rather than the more mild 2% they had said previously.Cheap money fuelling property and asset booms around the World.

Spain’s public debt reached a record high in June, the country’s central bank said. The figure has risen to 942.8bn euros (£792.5bn; $1.3 trillion), equal to 92.2% of the country’s entire economic output, the bank said. This is nearly 15% higher than the same period last year and above the Spanish government’s target limit of 91.4%, despite severe public spending cuts.

Debt ceiling in the US is going to start getting more and more headlines as POTUS Obama does not seem to be interested in talking to the Republicans about raising it. October 1st is the deadline!

Saudi billionaire Prince Alwaleed bin Talal says he will not sell any of his shares in microblogging site Twitter when it goes public, and expects the firm’s IPO to hit the market later this year or in early 2014.Recently the grand Inman of the Mosque in Saudi Arabia tweeted that “Twitter was a threat to national unity.” Strange double standards indeed.

The Troika is back in Portugal this week to rubber stamp their austerity measures. Nothing dramatic expected out of Europe though ahead of the German elections this weekend.

The Indian prime minister’s economic advisory council has lowered the growth outlook for the current financial year.It now expects the economy to expand by 5.3% this year, down from its earlier projection of 6.4% growth.