A quiet start to the week as the market meandered around with a slightly negative bias. We are in pause mode before the MYEFO and the FOMC meeting this week. After a pummelling at the start ,hitting 5059 ,we perked up a little and even went positive for a while before slightly worse than expected Chinese manufacturing numbers kicked us down again, to close down 9 points at 5090. Financials were once again the weak point in the argument led by Westpac Banking Corporation (A$30.77, -0.7%),National Australia Bank Limited (A$33.20, -0.4%) and Commonwealth Bank of Australia (A$73.63, -0.8%) whilst in insurance stocks QBE Insurance Group Limited (A$10.36, -2.3%) continued its march into oblivion as Insurance Australia Group Limited (A$5.70, unch) snared Wesfarmers Limited (A$41.51, +0.5%) insurance underwriting businesses for $1.8bn and went into a trading halt to raise $1.2bn to fund it. Good timing as bank dividends hit the door mats this week, although the bulk of the money will come from the Instos and only a $200m SPP.
• There were a few spots of green amongst industrials with Wesfarmers Limited (A$41.51, +0.5%) gaining WorleyParsons Limited (A$16.53, +7.1%),Metcash Limited (A$3.24, +4.9%),APA Group (A$6.36, +3.2%),SP AusNet (A$1.195, +3.0%),#MYT#,Amcor Limited (A$11.47, +1.5%) and Skycity Entertainment Group Limited (A$3.58, +6.2%).
• In resource land energy stocks slipped away as Woodside Petroleum Limited (A$37.22, -1.4%) led them lower followed by Caltex Australia Limited (A$17.40, -1.2%),Drillsearch Energy Limited (A$1.275, -2.7%),Santos Limited (A$14.03, -0.6%) and Oil Search Limited (A$7.93, -1.2%) and in the bigs BHP Billiton Limited (A$35.66, -0.5%) shrugged off reports that Abbott reckons they will expand Olympic Dam after all and slipped as did RIO Tinto Limited (A$64.91, -0.3%),Fortescue Metals Group Ltd (A$5.35, -0.2%) and Iluka Resources Limited (A$8.23, -1.2%) whilst Golds surprisingly put on some lipstick and came out to play, Newcrest Mining Limited (A$7.46, +0.5%),Beadell Resources Limited (A$0.795, +6.0%)Alacer Gold Corp. (A$2.42, +2.5%)Oceanagold Corporation (A$1.66, +3.1%) and even Panaust Limited (A$1.55, +2.3%) in copper stocks.
• Big Mitchel Johnson winners today included UGL Limited (A$6.91, +9.0%),Monadelphous Group Limited (A$16.51, +10.1%),AWE Limited (A$1.27, +7.2%),Skycity Entertainment Group Limited (A$3.58, +6.2%),WorleyParsons Limited (A$16.53, +7.1%),Bradken Limited (A$5.63, +6.0%) and Beadell Resources Limited (A$0.795, +6.0%) whilst looking like Alastair Cook today were Senex Energy Limited (A$0.705, -8.4%),#MQGDA#,#FLN#,#XRO#,Chorus Limited (A$1.31, -3.7%),#DSH#,Drillsearch Energy Limited (A$1.275, -2.7%) and Mount Gibson Iron Limited (A$1.00, -2.9%).
• Volume was pretty good for a Monday before Xmas at around $3bn as long as you look at the top ten stocks that is. Then not much! Asia was weaker with Tokyo down 1% and HK and China down around 1-1.5% too. The little Aussie battler was steady under 90 cents at 89.60 whilst Bitcon was trading around $1010 and Gold ,the original and the best was at $1235 off a tad in Asian trading.
Stocks and Stories
• From the slowest takeover in history Warrnambool Cheese & Butter Factory Co.Hold.Ltd (A$9.25, +0.5%) to the fastest today as AWE Limited (A$1.27, +7.2%) came back from a trading halt with a proposal from Senex Energy Limited (A$0.705, -8.4%) who baulked at not being welcomed with open arms and no fatted calf and then walked off back into the sunset with their tail between their legs..
• Insurance Australia Group Limited (A$5.70, unch) announcement on the Wesfarmers Limited (A$41.51, +0.5%) insurance underwriting business is just rubbing salt into the critical wounds at QBE Insurance Group Limited (A$10.36, -2.3%) at the moment.
• MQG ex distribution of the Sydney Airport (A$3.80, +1.3%) stake today which is the reason for the big fall.
• Chinese manufacturing came in unexpectedly weak at 50.5 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with a final figure of 50.8 in November and the 50.9 median estimate in a Bloomberg News survey of 11 analysts.
• In the recent IPO round up #DSH#,#NEC#,#FLN# slipped whilst #VED# put in a decent day as did #RLE# finally.
• Aussie shoppers are expected to splurge more than $8.7 billion on gifts and festive trimmings in the last week before Christmas. The Australian National Retailers Association Christmas Retail Index reports in-store sales will make up $7.8 billion of the total, up 23 per cent from last week’s sales.
• Japanese business confidence improved in the three months to December to its highest level in six years, according to the Tankan survey, boding well for the government’s stimulus policies aimed at conquering years of deflation.The headline index for big manufacturers’ sentiment improved by 4 points from September to plus 16,exceeding the median market forecast of plus 15.
Tomorrows News Today
• All eyes on the horror story that will be the Federal budget. Certainly won’t help us feel warm and fuzzy this Xmas.
• It’s beginning to look like Santa has dementia and has forgotten where his sleigh is and what time of year it is. Rapidly running out of time for an end of year rally. This December is the worse in 40 years so far!!Has to be said, Santa where the bloody hell are you?
• And Bloomberg has very nicely added up the cost of Xmas for us. Remember the song, ”Five Gold rings, four calling birds ,three French hens “etc..well the cost of all that is $27,393 as compared to last years’ cost at $25431..so up a good 8% on the year. And a Partridge in a pear tree!