And they are racing!! Big surprise from the Fed last night as Uncle Ben held back on tapering and once again reiterated that the US economy need to see unemployment at around 6.5% for him to take the sugar hit away from the children. Markets rallied across Asian and our market soared out of the blocks hitting 5300 briefly as the SPI expired today and then settled down to trade pretty much sideways all day finishing just below the 5300 level. The usual suspects were in demand, Financials led the way with National Australia Bank Limited (A$35.03, +1.1%),Australia and New Zealand Banking Group Limited (A$31.26, +1.7%) and Westpac Banking Corporation (A$32.98, +1.4%) all showing good gains whilst Commonwealth Bank of Australia (A$73.80, -0.2%) came in for a little profit taking and some negative vibes as its online trading platform was hit with a technical glitch .QBE Insurance Group Limited (A$14.70, -1.4%) fell as US rates fell on the Fed’s moves, whilst Macquarie Group Limited (A$50.00, +1.9%) were a big winner.
In resource land we saw BHP Billiton Limited (A$36.68, +1.6%) and RIO Tinto Limited (A$63.63, +3.1%) shine as did Fortescue Metals Group Ltd (A$4.58, +2.5%) whilst building stocks did well following #BRW# results this morning. Fletcher Building Limited (A$8.63, +1.6%) Adelaide Brighton Limited (A$3.60, +1.7%), Fletcher Building Limited (A$8.63, +1.6%) and Boral Limited (A$4.91, +4.2%) pushing higher on the cheap money sloshing around the housing markets. Retailers were also better Super Retail Group Limited (A$12.76, +2.7%), Harvey Norman Holdings Limited (A$3.31, +2.8%),Flight Centre Limited (A$49.80, +4.2%),JB Hi-Fi Limited (A$20.57, +3.6%),Premier Investments Limited (A$8.40, +1.6%) and Wotif.com Holdings Limited (A$4.68, +2.4%) all showing a clean pair of heals on optimism for consumer spending.
Energy stocks were also better on the improving oil price with Woodside Petroleum Limited (A$38.81, +1.0%),Oil Search Limited (A$8.71, +2.0%),Santos Limited (A$15.09, +0.6%) and Origin Energy Limited (A$14.07, +1.5%) in the biggies whilst REY Resources Limited (A$0.077, +1.3%) continued ever higher as punters looked at them as a cheap entry to the Canning Super Basin. Infrastructure and Airport stocks took off with Sydney Airport (A$4.00, +1.3%) hitting $4.00,Transurban Group (A$6.87, +1.3%),Auckland International Airport Limited (A$2.99, +3.5%) and Asciano Limited (A$5.97, +1.2%) all faring well.
The big winners today were Gold stocks which were written off this week but once again a huge bounce in metal prices and Gold hitting 1360 for a $60 rise was enough to force the bears out of the woods and abandon their picnic to cover. Kingsgate Consolidated Limited (A$1.91, +16.5%) was a standout but even heavyweight Newcrest Mining Limited (A$12.93, +7.9%) had a great day. Others to do well included Medusa Mining Limited (A$2.43, +18.5%),St Barbara Limited (A$0.655, +20.2%),Beadell Resources Limited (A$0.87, +17.6%),Regis Resources Limited (A$4.10, +5.9%) and Silver Lake Resources Limited (A$0.85, +9.7%).
Wearing the yellow jersey today in the Tour d’ ASX were Beadell Resources Limited (A$0.87, +17.6%),Evolution Mining Limited (A$0.90, +12.5%),Hutchison Telecommunications (Australia) Limited (A$0.048, +9.1%),Independence Group NL (A$4.13, +7.0%),Regis Resources Limited (A$4.10, +5.9%),James Hardie Industries PLC (A$10.90, +7.4%),Panaust Limited (A$2.34, +6.8%) and Oz Minerals Limited (A$4.50, +3.7%) .Mainly resources as see. At the rear of the Peloton were #ZIM#,Retail Food Group Limited (A$4.40, -2.7%),Goodman Fielder Limited (A$0.725, -2.7%),Bluescope Steel Limited (A$5.00, -2.9%),Kathmandu Holdings Limited (A$2.55, -2.7%) and NWS.
Volume was good today but was seriously boosted by Futures expiry this morning but nice to see a $6bn day! Finally. Aussie Dollar 95 cents again.
Asian markets and especially long suffering emerging markets were strong too on the Tapering no show. Thailand ,Indonesia and the Philippines were especially good but Tokyo also enjoyed a day in the rising sun!
Stocks and Stories
Billabong International Limited (A$0.475, +5.6%) has accepted a refinancing proposal from a group including Oaktree Capital Management and Centerbridge Partners, saying it offered better terms than a rival plan to repay debt.It also annlunced Neil Fiske as its new CEO.
Prima Biomed Ltd (A$0.04, -50.6%) when good Bio Techs go bad! Huge drop today as its CVac phase II shows pretty dismal results. At least it doesn’t make the cancers worse I guess.
RGS listed today and after a brief flurry of trading around 28.5 cents settled with a small premium as a few stags exited stage left pursued by a bear.
Two directors of the ASX Limited (A$35.26, +0.4%) have resigned in the wake of a share trading scandal in the United States. Shane Finemore and Russell Aboud resigned from the ASX board after their hedge fund, Manikay Partners was fined by the Securities and Exchange Commission in the US.
Mining services contractor NRW Holdings Limited (A$1.47, +3.5%) has secured a $620 million contract to prepare earthworks for a rail project between Gina Rinehart’s planned Roy Hill mine and Port Hedland.
Employment fell by 26,500 over the three months to August – the biggest quarterly loss in almost 13 years, ABS data out today shows.
KordaMentha have been appointed receivers to Sydney’s Cross City tunnel, marking the second time in eight years the insolvency firm has overseen the debt-stricken toll road.
Tomorrows News Today
The American economy has shed 347,000 jobs over the past two months, roughly comparable with the rate of loss seen during the Great Recession. The labour “participation rate” dropped to 63.2pc in July, the lowest level since the late 1970s. The rate for men is at an all-time low. Hardly surprising then that Uncle Ben kept printing then. 47m American live in Poverty! 27% are Black and 22% are Hispanic. Not sure this was the dream that Martin Luther King was hoping for.
The billionaire creator of Beanie Babies toys could face up to five years in prison after agreeing to admit a charge of tax evasion. Federal prosecutors said that Ty Warner “went to great lengths” to hide more than $3m (£1.9m) of income in a secret Swiss bank account.
The Bank of England has upgraded its growth forecast for the UK economy. Minutes from September’s meeting of the Bank’s Monetary Policy Committee show that third-quarter growth is expected to be 0.7%, up from 0.5% forecast in last month’s Inflation Report.
Air France is cutting 2,800 jobs. Blackberry is cutting 40% of its workforce or about 5,000.
Apple may be troubled tonight as its roll out of its new smartphone operating system iOS7 seems to have hit some road bumps as people couldn’t download or upgrade. Also it seems that orders for the iPhone 5C and Gold one may not be the stuff Steve Jobs would have approved of. Why buy a new phone when you can get the software upgrade for free for your old one!
China’s massive credit boom is rapidly growing to unsustainable levels and over-extended financial institutions risk being pushed over the edge by rising interest rates, according to rating agency Fitch. According to Fitch’s calculations, annual new credit in China climbed to 21 trillion yuan (£2.15 trillion) in August, up from 19 trillion yuan in August 2012, the fifth year that net new credit has exceeded more than one-third of GDP.
Bubble Trouble in Little China as property prices soar 20% in the big cities! Property developers have scaled back projects in the last two years creating a shortage which is pushing prices up as speculators jump on board.
And on day two, Tony Abbott has stopped the boats, sorted Climate change and balanced the budget. Now for that bike ride!