Inflation is dead! Long Live Inflation! Whilst the rest of the World is trying really, really hard to get inflation up, seems we have the opposite problem. Todays’ numbers on the CPI showed that things are tracking at the top end of the RBA’s band. So for all the jawboning and all the “I’m going out on a limb” Gerry Harvey comments, the next rate move will be up. But it will not be for some time. In the meantime commentators and bond traders will speculate on the move because otherwise they don’t have a job! The Aussie dollar was the big gainer on the numbers leaping 0.5 cents to 88.65 as the ball is now well and truly with the RBA. After a slippery opening we lurched like a drunk searching for a lamp post to hold onto before steadying up to close down 12 at 5320 after hitting a low of 5285 ,down 46.The reassessment of some of the big resource stocks was the primary driver for the recovery.

BHP Billiton Limited (A$37.63, -0.8%) set the scene with slightly disappointing production numbers especially coming from their US Shale operations(the one they paid all that money for, that’s right) plus the drop in the Iron Ore price to around $123.20.Resources generally were on the nose with Golds suffering too. Newcrest Mining Limited (A$9.34, -3.1%),Fortescue Metals Group Ltd (A$5.35, -1.1%),Atlas Iron Limited (A$0.955, +1.6%),Oz Minerals Limited (A$3.68, -1.3%) SLR,Kingsgate Consolidated Limited (A$1.155, -2.9%) and RIO Tinto Limited (A$65.29, -0.8%) all casualties whilst the hated banking sector was once again showing its resilience. The big four were all slightly firmer except for Commonwealth Bank of Australia (A$75.91, -0.2%).Macquarie Group Limited (A$54.93, +2.0%) also sprang into life as their name got bandied around for a deal to buy some of Shells assets in Australia. In recent months the Millionaire factory has been a lot more out and proud after its emergence from the GFC casualty ward, seems like they have a new spring in the step. Insurance stocks eased with AMP Limited (A$4.46, -0.7%)Insurance Australia Group Limited (A$5.77, +0.3%),QBE Insurance Group Limited (A$11.72, -0.3%) and Suncorp Group Limited (A$12.99, -0.8%) in the doggy house, whilst wealth managers like Perpetual Limited (A$49.37, +1.7%) lurched ahead as did Bt Investment Management Limited (A$6.36, +3.6%) and Henderson Group PLC. (A$4.27, +0.5%). Energy also ran out of fuel today with small losses in Woodside Petroleum Limited (A$38.15, -0.6%),Oil Search Limited (A$8.21, -0.8%),Santos Limited (A$14.26, -1.0%),Karoon Gas Australia Limited (A$3.75, -1.1%),Beach Energy Limited (A$1.395, -0.7%) whilst even defensives like Telstra Corporation Limited (A$5.22, -0.8%) Westfield Group (A$10.28, +0.1%),Woolworths Limited (A$34.20, -0.6%) and Wesfarmers Limited (A$43.39, -0.4%) came in for some red ink.

Gaming stocks fell with Crown Resorts Limited (A$17.84, -0.9%),Tatts Group Limited (A$3.03, -1.0%) and Aristocrat Leisure Limited (A$4.48, -1.1%) down while other retailers like Harvey Norman Holdings Limited (A$3.23, -0.6%),Myer Holdings Limited (A$2.63, -0.4%) and David Jones Limited (A$3.06, -0.3%) also eased on rate worries. Building stocks also took the CPI numbers badly with losses in Csr Limited (A$2.87, -3.4%),Boral Limited (A$4.75, -1.0%),James Hardie Industries PLC (A$13.17, -0.6%),Adelaide Brighton Limited (A$3.75, -1.6%) and Brickworks Limited (A$14.34, -0.4%) although to be fair they were weaker pre the number.Healthcare was also down and out in Surry Hills led by Csl Limited (A$70.14, -0.8%),Primary Health Care Limited (A$4.89, -2.2%),Sonic Healthcare Limited (A$16.90, -0.5%) and Unilife Corporation (A$0.95, -6.4%).

Shiny happy people holding hands today included Oceanagold Corporation (A$1.99, +8.4%),#AAI#,Bt Investment Management Limited (A$6.36, +3.6%),#NEC#,#FLN#,#XRO# and Macquarie Atlas Roads Group (A$2.84, +3.3%) whilst dull, depressed and in the spare room were Sandfire Resources NL (A$5.91, -8.8%),Sirius Resources NL (A$2.23, -5.1%),Beadell Resources Limited (A$0.83, -4.6%),Western Areas Limited (A$2.63, -4.0%),Panaust Limited (A$1.80, -1.9%),Independence Group NL (A$3.29, -3.8%),NCM# and Bega Cheese Limited (A$4.80, -2.4%). Volume was around $3.4bn which is starting to pick up but still a little low.

Asian markets were a smidge weaker but nothing significant except for Shanghai which burst out of its stupor and is up 2% after authorities moved back into the money markets to ease liquidity concerns.Ausie dollar 88.60 and Bitcons were around $1090.

Stocks and Stories

Looks like the Mounties have got their man, with news today that Canadian Food company Saputo(sounds very Canadian doesn’t it ) have crossed the finish line with over 50% of the Blessed Cheesemaker.

In house stocks, Regeneus Ltd (A$0.51, +4.1%) today announced a tie up with Lonza of the US as they came on board to partner them for the trials of Regeneus’ canine CryoShot for the FDA. New Standard Energy Limited (A$0.16, +6.7%) also put in another good effort following the completion of their farm out. In other House stocks IMC announced a fully underwritten rights issue to raise a cool $10m at 0.5 cents.

BHP Billiton Limited (A$37.63, -0.8%) Numbers out last night showed record iron ore production from the Pilbara and they reaffirmed production guidance. Coal ok, Copper ok but Petroleum division was a little underwhelming.

Talking of oil and gas in the US, Aurora Oil & Gas Limited (A$2.78, -0.4%) the shale oil and gas developer produced 2.27 million barrels of oil or equivalent (mmboe) in the three months to December 31, up 15 per cent from the previous three months. Revenue from oil and gas sales rose nine per cent to $US157 million ($A178.77 million) over the December quarter.

Consumer confidence has slipped for the second straight month as concerns about unemployment weighed .The Westpac–Melbourne Institute Index of Consumer Sentiment fell 1.7 per cent this month to 103.3 points, a level not seen since July last year.

Bank of Japan Governor Kuroda’s board stuck to its pledge to expand the monetary base by an annual 60 trillion to 70 trillion yen ($671 billion) today after a two-day meeting in Tokyo.. The BOJ maintained its forecast that core inflation will reach 1.9 percent in the year starting April 2015, excluding the effects of sales-tax increases. They should have our problem.

Tomorrows News Today

Just a thought, but if this report is rated by FN Arena as the second best afternoon market report after Coppos’,then with his retreat from the industry does this make this report No 1.Perhaps?Or maybe just the only one! You decide!

Australian house prices have grown faster than those in any other major economy and are forecast to outstrip even countries recovering from the GFC in 2014.

Power Assets Holdings controlled by Asia’s richest man Li Ka-shing, raised HK$24.1 billion ($3.1 billion) in the initial public offering of HK Electric Investments at the low end of a marketed price range.

Disappointing number after hours from IBM may set the tone for the US markets.

You watching this Gerry, Argentina has introduced new restrictions on online shopping as part of efforts to stop foreign currency reserves from falling any further. Anyone buying items through international websites will now need to sign a declaration and produce it at a customs office, where the packages have to be collected. Each individual is allowed to buy up to $25 (£15) a year from abroad tax free, but it has been hard for custom officials to keep accurate records of each consumer. Once the $25 level is reached, online consumers in Argentina need to pay a 50% tax for each item bought from international websites.

And it was nice to see the COO of Facebook, Sheryl Sandberg join the billionaires club. Have to say Facebook is finished if my kids are anything to go by. They are deserting in droves to Instagram, Snapchat and others..Facebook just used for picture storage and events apparently. Once the parents embrace the ‘Cool’ technology the kids move on, bit like Billabong clothing !But is she happy? That’s what I want to know!

A new poll of 360 people from London-based data group, Colt Technology Services, showed that 63 per cent of
people, including brokers and heads of trading desks, believe the valuation of individual stocks can be directly linked to social media conversations on Twitter and Facebook, the online news site Finextra reported. I am sure the price of cute puppies and pussy cats is affected too!

Chief executives in the UK are among the most confident in the world, research by PricewaterhouseCoopers (PwC) has found. It said 93% of the country’s bosses were confident about their company’s financial prospects for the next year, compared to 78% in 2013.whereas our lot are a miserable lot worried about the lack of vision in this country. At least according to PwC.