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It was all going so well as the market pushed through the 5400 level early on the back of better overseas markets and the BHP number. However the inflation number at 11.30 put the kibosh on the rally as it showed the RBA has little room to move on interest rates with fuel, travel ,utility rates and property all adding to the 1.2% rise against consensus at 0.8%. The Aussie dollar soared to 97.45 on the news and the market having topped at 5402 gave it all back and more closing down 17 at 5356.Stories of some program selling out of Japan, but we have had seven days in a row up and even God had to rest on the 7th day. So we have gone one better. Even he can’t keep it up for eight in a row!

In stocks BHP Billiton Limited (A$37.50, +1.2%) was again the stand out with Golds also joining the fun. Newcrest Mining Limited (A$11.09, +3.5%),Regis Resources Limited (A$3.90, +5.1%),Silver Lake Resources Limited (A$0.77, +12.4%),Evolution Mining Limited (A$0.875, +9.4%),Kingsgate Consolidated Limited (A$1.595, +5.3%) and Beadell Resources Limited (A$0.96, +4.3%) all posting good gains. Iron ore stocks backed and filled a little except for Atlas Iron Limited (A$1.075, +2.4%).Alumina Limited (A$1.06, +6.5%) also had a good day following its recent move and despite a speeding check from the ASX.

In financials the run had to end at some stage and so it did. Banks were a blob of red with numbers due soon. National Australia Bank Limited (A$35.47, -1.7%) the worst of the bunch followed by regional Bank of Queensland Limited (A$11.68, -1.8%). Insurers were slightly better performers but still a little in the red. QBE Insurance Group Limited (A$14.45, -2.4%),Suncorp Group Limited (A$13.08, -0.4%),IAG# all lower.

Industrials were moderately weaker with Brambles Limited (A$9.48, -1.0%),Csl Limited (A$66.36, -1.8%),AGL Energy Limited (A$15.30, -1.8%),Woolworths Limited (A$34.69, -0.5%) and Wesfarmers Limited (A$42.00, -0.5%) down plus Crown Limited (A$16.66, -1.8%) and other gamblers like Aristocrat Leisure Limited (A$4.74, -1.7%).Energy stocks also fell as oil continued to trade below $100.Oil Search Limited (A$8.47, -2.1%),Santos Limited (A$14.56, -1.8%),Linc Energy Ltd (A$1.565, -7.7%) and Aurora Oil & Gas Limited (A$3.29, -2.7%) in the naughty corner today, but Origin Energy Limited (A$14.46, +1.5%) bucked the trend as did Woodside Petroleum Limited (A$38.38, +0.1%).

Big winners today included Sirius Resources NL (A$2.54, +12.9%),Evolution Mining Limited (A$0.875, +9.4%),Western Areas Limited (A$3.02, +6.7%),Regis Resources Limited (A$3.90, +5.1%),Alumina Limited (A$1.06, +6.5%),BC Iron Limited (A$5.00, +3.3%) and Independence Group NL (A$4.02, +4.4%) and Newcrest Mining Limited (A$11.09, +3.5%)! Whilst the biggest losers included recent winners like Linc Energy Ltd (A$1.565, -7.7%),G8 Education Limited (A$3.07, -5.2%),Breville Group Limited (A$8.18, -4.8%),Arrium Limited (A$1.375, -3.2%),Bluescope Steel Limited (A$4.70, -4.3%),PMV# and Super Retail Group Limited (A$13.49, -2.7%).

Volume was better at a tad over $4bn  whilst Asian markets were weaker in the majors but only slightly.
Stocks and Stories

In house stocks APN News & Media Limited (A$0.495, +8.8%) continued to find favour, as did Buru Energy Limited (A$1.735, +5.5%) but Cockatoo Coal Limited (A$0.049, -16.9%) fell sharply as their takeover for BWD has been recommended. Hardly a surprise!

Telstra Corporation Limited (A$5.03, +0.4%) shuffles the deck chairs with a greater focus on the cloud, Asia and Apps in store for the company. Good to see the future fund release its performance figures today. Shame they didn’t keep their TLS! They could have bought the NBN with the gains! Have averaged 8.2% over the last five years. Investor day today though for TLS and chief executive David Thodey reiterated that the telco is expecting low single digit EBITDA growth.maybe a rise in dividend perhaps ,David?

Super Retail Group Limited (A$13.49, -2.7%) AGM today and the CEO Peter Birtles says the company’s auto division plans to open five new stores in the 2013-14 financial year, while 10 new leisure and 10 new sports stores are also planned.

Aurizon Holdings Limited (A$4.72, unch) quarterly today.

AGL Energy Limited (A$15.30, -1.8%) has signalled a broadly flat profit outlook this financial year due to an unseasonably warm start to the financial year coupled with competitive pressures. For the year to June, 2014, AGL said its underlying net profit will fall in the range of $560-610 million. In the year to June, 2013, the underlying net profit was $585.4 million.

Treasury Wine Estates Limited (A$4.62, -2.3%) the world’s largest pure-play winemaker, has warned that consumer demand for wine in China has softened as a result of August’s leadership change and a recent austerity drive by the communist government.

Uncle Joe Hockey (budget emergency, where?) has given the RBA a $8.8bn cheque to enable it to strengthen its foreign currency reserve fund. This has now pushed the budget deficit up to $40bn as a result. Thought there was a budget emergency under Labour. Seems pushing the credit card limit up to $500bn is ok now!
Tomorrows News Today
One of the reasons the market fell out of bed today. China’s biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what may be a fresh wave of defaults. Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan ($3.65 billion) of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier, filings showed. That didn’t pare first-half profits, which climbed to a record $76 billion, as provisions were set aside in earlier periods when the loans began souring.

Cuba is to scrap its two-currency system in the latest financial reform rolled out by President Raul Castro, official media report. Since 1994 Cuba has had two currencies, one pegged to the US dollar and the other worth only a fraction of that.

Seems that Starbucks is copping it for selling coffees in China for more than in the US. Isn’t that called market forces. In a report that aired on Sunday, it said a medium-size latte in Beijing costs 27 yuan ($4.43), or about one-third more than at a Starbucks in Chicago. Sounds like a storm in a tea cup to me.

JP Morgan looks like it is close to a deal with investors to settle for another $6bn.The way these settlements are going the Fed is going to have to bail them all out again! Robobank are staring down the barrel of a 1bn dollar fine too for their role in the LIEBOR scandal.

China signalled concern on Tuesday that ample credit could fuel inflation as a report showed house prices jumped the most in nearly three years, with double-digit gains in major cities. A policy adviser to the People’s Bank of China told Reuters the authority may tighten cash conditions in the financial system to address the inflation risks, while the central bank refrained from supplying cash to money markets for the second day running.

Clarence

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