As Martha Reeves once sang, ”Nowhere to run, Nowhere to hide” as the market fell away dramatically to finish down a solid 80 points at 5212.Wall Street did the damage and no amount of chirpy gold stocks could stop the rot. Banks were the worse hit as you would expect with the big four a nasty red blob in the corner of my market map. Other financials also suffered badly with Macquarie Group Limited (A$52.44, -2.9%) badly mauled as were the insurers AMP Limited (A$4.42, -0.7%),Insurance Australia Group Limited (A$5.65, -2.4%),Suncorp Group Limited (A$12.93, -1.7%) and QBE Insurance Group Limited (A$11.78, -0.9%). Resources to suffer the slings and arrows were BHP Billiton Limited (A$36.14, -1.1%),RIO Tinto Limited (A$63.35, -0.3%) and Woodside Petroleum Limited (A$37.35, -0.6%) (Fortescue Metals Group Ltd (A$5.15, +0.2%) though were a shining light in comparison!) whilst defensives Telstra Corporation Limited (A$5.20, -1.0%),Woolworths Limited (A$33.75, -1.3%) and Wesfarmers Limited (A$42.85, -1.8%) also got a hiding. #FOX continued to be in the dog house or is that the hen house joining other media stocks like REA Group Ltd (A$39.56, -1.5%),Seven West Media Limited (A$2.16, -3.1%),Fairfax Media Limited (A$0.64, -1.5%) and APN News & Media Limited (A$0.47, unch). Industrials were also under the knife today with Brambles Limited (A$8.89, -2.0%),Amcor Limited (A$10.16, -1.9%),ALS Limited (A$8.64, -2.7%),Seek Limited (A$12.75, -3.3%),Qube Holdings Limited (A$2.01, -2.9%) all trending down. Building stocks Amcor Limited (A$10.16, -1.9%),James Hardie Industries PLC (A$12.50, -3.4%),Csr Limited (A$2.68, -1.8%),Adelaide Brighton Limited (A$3.63, -2.4%) also had a horrid day. Maybe the Stones had it right with “Gimme Shelter”! Seems that the buyers are still on holidays with no one prepared to step up to the plate and sort through the rubble. Since New Years Eve, the market has fallen from 5352 to 5215 as Santa seems to have a bit of a hangover and investors around the world wait to see if ‘Hopium’ is going to translate into earnings growth rather than just PE expansion. All this bearishness whilst corporates around the world are spending like drunken sailors. Big bid overnight of $62bn for Time warner Cable, a Goldcorp bid for Osisko and Google to buy a digital thermostat company for $3.2bn!
Big winners today were hard to find but Alumina Limited (A$1.21, +4.8%),Western Areas Limited (A$2.67, +4.3%),Oceanagold Corporation (A$1.79, +3.8%),Lynas Corporation Limited (A$0.305, +1.7%),Fonterra Shareholders’ Fund (A$5.29, +1.3%) and M2 Telecommunications Group Limited (A$6.53, +1.1%) and Beadell Resources Limited (A$0.815, -0.6%) whilst joining the cast of the biggest loser were Mineral Resources Limited (A$10.59, -6.9%),JB Hi-Fi Limited (A$20.84, -5.7%),Henderson Group PLC. (A$4.03, -6.3%),Karoon Gas Australia Limited (A$3.78, -5.5%),Regis Resources Limited (A$2.90, -5.5%),Senex Energy Limited (A$0.67, -4.3%) and Bt Investment Management Limited (A$5.70, -5.8%). Volume was slightly better than yesterday but not enough to drag brokers off the beach at around $3bn.Asain markets gave up the ghost and fell away with the MSCI Asian index down 1% and the Nikkei the worse of them down 2.7% on a terrible Current account deficit ,the Aussie dollar hovering around 90.3, whilst Bitcon remained above $1010.
Stocks and Stories
Regis Resources Limited (A$2.90, -5.5%) dropped heavily after disappointing gold production numbers today, at around 72,000 oz due to ramp up issues at its Rosemont project.
RIO Tinto Limited (A$63.35, -0.3%) has maintained its shareholdings in Turquoise Hill Resources following the rights issue offering.
REA Group Ltd (A$39.56, -1.5%) announced today that it had acquired 1Form.com for $15m.1Form Online is a market leading rental app.
Newcrest Mining Limited (A$8.80, -0.8%) increased its bilateral bank loan facility and promptly fell! Newcrest Mining’s gearing ratio shows little sign of falling, after the miner took on its second debt package in the space of four months. The gold miner today announced a new three-year loan worth $US200 million, for the purpose of providing ”additional liquidity headroom”.
Woodside Petroleum Limited (A$37.35, -0.6%) has announced an agreement to sell around 1.5 million tonnes of liquefied natural gas over the next three years to Japan’s Chubu Electric Power. Most of the gas will come from the Woodside-operated Pluto project of the WA coast.
VWD now expects net profit before tax for the half year ending December 31, 2013 to be approximately $9.3million, up from $5 million as previously advised at the start of December.
Good to see Forge Group Limited (A$1.025, -18.0%) once again providing investors with a white knuckle ride as once again it found that $23m had slipped down the back of the sofa and the dog had got to it before they could. Has been a stock for traders this year but the fundamentals still appear cloudy with a touch of meatballs!
Samsung fell 13 percent since Nov. 29, losing more market capitalization than any other company worldwide.
Japans current account was the largest ever! The November figures show the current account gap was Y593bn, or more than four times larger than the Y128bn deficit a month earlier (the first deficit since January). Forecasters had predicted a gap of Y369bn.
Tomorrows News Today
From tomorrows FT, ”The US Congress has agreed a broad spending deal for the first time since 2009, but it has left the International Monetary Fund in disarray by refusing to fund its latest capital increase. The $1.012tn package lays out how the US will spend the budget agreed after tense negotiations in December.”
New Jersey Gov Chris Christie is looking like a shot duck after “Bridgegate”, he is now faced with an inquiry into how relief funds were spent on campaign funding. All over Red Rover. Presidential hopeful no more!
Suntory buys Jim Beam and Laphroaig whisky for $16bn.
After Dennis Lockhart last night, we get some more commentary from the Muppet Show with Charles Plosser from the Philadelphia Fed and Richard Fisher from Dallas, voting members of the Federal Open Market Committee this year, speaking tonight. Should be interesting and some Chinese numbers to come later this week.
The internet is funny place. In South Korea there are a growing number of food gorgers eating their way to a fortune every month by stuffing their faces with food while people watch and pay them! It’s called Mok Bang. Another giant step for mankind.
And with the Sochi winter Olympics just round the corner, it’s going to be the most expensive yet at a cost of over $51bn.Bejing only spent $40bn.And security has been guaranteed with safest games ever promised. Twice as many on security than London and twice as costly as Vancouver!
That is all