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After a weak start following the FOMC news and headlines on the banking sector in the Financial Review this morning, warning on pay outs to shareholder the market opened weaker and tested the 5400 level. National Australia Bank Limited (A$35.31, -2.5%) results this morning, whilst on the right track, failed to provide the impetus needed to kick them higher. At one point NAB were down 3.5% before some rethinks took place and the stock made up some ground. Other financials were similarly afflicted with only Australia and New Zealand Banking Group Limited (A$33.84, +0.4%) showing a clean pair of heels. Industrials though were the star performers as healthcare stocks, consumer and Insurance stocks rose. Stand outs included Csl Limited (A$69.50, +1.2%),Mesoblast Limited (A$6.60, +9.6%),Wesfarmers Limited (A$42.97, +1.6%),Woolworths Limited (A$34.90, +0.1%)(sales numbers helped) and Insurers Insurance Australia Group Limited (A$6.18, +1.1%),QBE Insurance Group Limited (A$14.80, +0.7%),AMP Limited (A$4.74, +0.9%)Clearview Wealth Limited (A$0.655, +7.4%),Suncorp Group Limited (A$13.38, +0.1%) all did well. Big resources were mixed as BHP Billiton Limited (A$37.66, unch) were unchanged RIO Tinto Limited (A$63.99, +0.9%) rose and Fortescue Metals Group Ltd (A$5.21, -1.7%) eased.

Telstra Corporation Limited (A$5.18, +0.2%) was another winner as it powered up to 5.20 as the boys here have no APRA breathing down their necks with regulatory requirements. Up 20% in 2013.Future Fund did do well. Brambles Limited (A$9.30, +0.6%) were also better as they enter the home straight for Total Recall whilst other logistics companies also went well. Asciano Limited (A$5.82, +2.1%),Qube Holdings Limited (A$2.17, unch) and Transpacific Industries Group Ltd (A$1.145, +5.0%). Builders also had a really good day today following the housing numbers today with Fletcher Building Limited (A$8.69, +4.1%), James Hardie Industries PLC (A$10.93, +1.4%),Adelaide Brighton Limited (A$3.85, +4.9%),Boral Limited (A$4.94, +1.6%) doing well.

Smiling from ear to ear today were Drillsearch Energy Limited (A$1.295, +8.8%),Adelaide Brighton Limited (A$3.85, +4.9%),Navitas Limited (A$5.80, +3.9%),Treasury Wine Estates Limited (A$4.70, +3.3%),Transpacific Industries Group Ltd (A$1.145, +5.0%),Bluescope Steel Limited (A$4.99, +4.4%),Fletcher Building Limited (A$8.69, +4.1%) whilst in the losers circle were Peet Limited (A$1.40, -3.4%),Skilled Group Limited (A$3.53, -3.6%),Retail Food Group Limited (A$4.36, -4.8%),Whitehaven Coal Limited (A$1.62, -3.3%),Arrium Limited (A$1.385, -0.4%) and as usual Newcrest Mining Limited (A$10.30, -35%)(can’t win this one)

Volume was ok at around $4.4bn today which is better but October has been a quiet month on equity markets. Range today was 5398 to 5446 with a close around 5425.Tomorrow is a new month. Asian markets were slightly weary after a long month and decided to take a few profits. The People’s liberated Popular Bank of the Republic of China pushed some more funds back into the system today. Good to see and short term rates eased.
Stocks and Stories

National Australia Bank Limited (A$35.31, -2.5%) got the corporate report today. B minus I suspect. Could do better.UK bad debts improving. Cost cutting helping. Not much stress in the local mortgage book, 64 per cent of the bank’s home loan customers were ahead of their mortgage by eight repayments. On the minus side higher than expected restructuring costs, a rise in new impairments in the Australian business and an uninspiring result from its wealth management business. These banks will never learn, the wealth business is hard work.

Mesoblast Limited (A$6.60, +9.6%) had a great day today following  approval by the US Food and Drug Administration (FDA) of clinical trials for its treatment of chronic congestive heart failure. Speculation – mostly negative – about winning approval for the stage three trial had weighed on the share price for months on end. The approval came within the minimum 30-day application period following the submission by the company of its trial plans, which had taken some time to finalise.

Woolworths Limited (A$34.90, +0.1%) Woolworths has sold more than $15.68 billion worth of goods during the three months to October 6, an increase of three per cent on the same time last year.

Asciano Limited (A$5.82, +2.1%) had a site visit today for their Pacific National.

TABCORP Holdings Limited (A$3.60, unch) joined the list of companies reporting soft consumer conditions at its AGM today. The company told investors that overall group revenues were up 3.1 per cent to $503.9 million for the three months ending September 30, which was in line with its trading performance in the second half of last year.

Qantas Airways Limited (A$1.245, -1.6%) continues to be under pressure and today increased its holding in Jetstar Japan by tipping into the hat another$120m to support growth. Nah!

Still the one. Nine is set to raise some $600 million in an initial public offering and is expected to list on December 6.Expect lots of shiny happy people holding hands and pumping the beauty of this one.

Rising house prices and low interest rates are sparking a recovery in the building sector. Building supplies companies like CSR and the smaller Legend will receive a boost from this news.

Approvals for the construction of new homes rose 14.4 per cent across Australia in September, official figures show.

And hats off today to PBT punched the lights out with good news on its phase 2 trials helping to reverse memory loss and what was the other thing. It will come to me .Really, it will! No, don’t tell me..
Tomorrows News Today

Fixed rate mortgages are on the rise. Rate cut cycle looks like its over.

Across the ditch the next big thing GeoOp listed today. Only a compliance listing for sure. Not many around but issued at 1.00 and started life at 2.40 before closing at 2.20!Its 2001 all over again!

The European Commission said its Economic Sentiment Indicator (ESI), a measure of overall confidence, rose 0.9 points to 97.8 points in October but the pace of improvement was slower.

This is big news China’s top four banks posted their biggest increase in soured loans since at least 2010 as a five-year credit spree left companies with excess manufacturing capacity and slower profit growth amid a cooling economy. The top four banks have set aside an average 279 % of the value of their soured debt as provisions, up from 272 % at the end of June and ahead of a regulatory requirement of 150 %. China also requires banks to set aside 2.5 % of total credit as reserves.

In a day of banking news ICBC, the world’s most profitable lender, reported yesterday its weakest profit gain in more than four years as lending and fee income growth moderated. Net income rose 7.7% to 67.2 billion yuan inthe third quarter, missing the 69.4 billion-yuan average estimate.

Gonna be plenty to talk about at the Plenum! Still not sure what a Plenum is! Big games starting to appear in currency wars too.US on the offensive as they try to divert attention from the spying on your friends scandal.

And finally something to think about. In the last month there were 130k new jobs created in the private sector in the US.$85bn pumped into the system and 130,000 jobs. Works out at a whopping $654K per job. Well done Ben. Looks like it’s working a treat.

Clarence

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