Seems we led the World down yesterday given our almost sanguine reaction to the big drops overnight on overseas market. At one stage today the market even pushed into strongly positive territory ,up 15 to reverse all engines but did slip gently towards the long weekend to close down 22.The big red blob of banks were the main culprit with the rally in Gold and Iron Ore stocks unable to lift the market out of the negative quagmire. Australia and New Zealand Banking Group Limited (A$30.65, -1.0%) and National Australia Bank Limited (A$33.82, -1.0%) the biggest losers whilst much (now ) loved Macquarie Group Limited (A$55.88, +0.2%) bucking the trend. Insurance stocks remained slightly unloved after yesterday profit up (down )grade by Insurance Australia Group Limited (A$5.60, unch) with QBE Insurance Group Limited (A$11.71, unch) easing as did AMP Limited (A$4.33, -1.4%) and Suncorp Group Limited (A$12.48, -1.0%). Having fun frolicking before the long weekend were Woolworths Limited (A$33.98, +0.4%) on a broker upgrade, Csl Limited (A$70.87, +1.1%), after Baxters numbers from the US showed good growth in blood products, and miners looking decidedly better on improving iron ore price and outlook. RIO Tinto Limited (A$65.16, +0.8%) and Newcrest Mining Limited (A$9.48, +3.8%) were the stand outs in big caps, whilst BHP Billiton Limited (A$37.04, unch) tried really, really hard today.

Golds piled on the cents today as the price of the shiny stuff rose to its highest level in 16 weeks. Silver Lake Resources Limited (A$0.62, +3.3%),Evolution Mining Limited (A$0.62, +4.2%),KCN#,Regis Resources Limited (A$2.69, +1.1%) and Excelsior Gold Limited (A$0.073, +5.8%) put in a great day. Beadell Resources Limited (A$0.71, -11.3%) unfortunately failed to inspire with its latest quarterly report showing a rise in costs and limited benefit from the Iron Ore by product they are trying to produce. Back to the drawing board Mr Bowler. Energy stocks Woodside Petroleum Limited (A$38.13, +0.3%),Beach Energy Limited (A$1.41, +2.5%) and Buru Energy Limited (A$1.915, unch) gained but Santos Limited (A$13.85, -2.1%) eased after positive vibes this week.

Shock of the day was The Reject Shop Limited (A$11.50, -32.0%) which kicked all hopes of a retail recovery in the guys today with an update of Xmas trading conditions. Anecdotally things in the sales went well but I guess if you are the Reject shop the sales aren’t quite as motivating, already heavily discounted whereas Myer Holdings Limited (A$2.50, -4.2%),David Jones Limited (A$2.90, -4.0%),JBH# and Kathmandu Holdings Limited (A$2.99, -2.9%) probably have a slightly better business model but were dumped none the less. Super Retail Group Limited (A$10.50, -1.8%) remained just that with (no) Funtastic Limited (A$0.165, -5.7%) copping a hiding too as did Breville Group Limited (A$8.21, -4.1%).

Media stocks were mixed with Southern Cross Media Group Limited (A$1.665, +3.4%),Village Roadshow Limited (A$7.50, +0.3%) better whilst Fairfax Media Limited (A$0.675, -0.7%) and Seven West Media Limited (A$2.07, -3.7%) slumped. Telstra Corporation Limited (A$5.15, -0.6%) also gave up ground as a new CEO was appointed to Vodafone and news of their recent Indonesian MOU failed to inspire.

Big winners today included Oceanagold Corporation (A$2.10, +9.7%),Mount Gibson Iron Limited (A$1.04, +8.3%),Newcrest Mining Limited (A$9.48, +3.8%),Oz Minerals Limited (A$3.61, +2.0%),Paladin Energy Ltd (A$0.55, -1.8%),Whitehaven Coal Limited (A$1.87, +1.4%),Beach Energy Limited (A$1.41, +2.5%) and EWC# whilst following in their wake swathed in red were Beadell Resources Limited (A$0.71, -11.3%),Breville Group Limited (A$8.21, -4.1%),ResMed Inc. (A$5.00, -4.9%),#CVO#,The Reject Shop Limited (A$11.50, -32.0%),$PNA#,Cochlear Limited (A$57.85, -3.7%) and Wotif.com Holdings Limited (A$2.38, -2.9%). Volume was around $3.6bn which is still sub optimal. Asian markets copped a hiding today following the 200 points off the Dow, The MSCI Asia Pacific Index lost 0.9 percent by lunchtime, Japan set for a fourth week of decline. Japan’s Topix index sank 1.3 percent after the yen jumped the most since September yesterday. Aussie dollar at 87.60 whilst Bitcons eased back to $1050 as Gold also fell from its overnight highs to around $12.60

For the week we have dropped 65 points odd! Feels like more doesn’t it!

Stocks and Stories

The Reject Shop Limited (A$11.50, -32.0%) Shocker! Disappointing sales over the weeks leading up to Xmas particularly in major shopping centres.33 new stores opened. Sales up 18% to $386m.Gross margins well down though.

Nufarm Limited (A$4.09, -1.9%) announced a ‘down’date today with guidance now at the bottom end of the EBIT$50-60m range. They blamed the weather! Makes a change from the Australian Dollar!

ResMed Inc. (A$5.00, -4.9%) 2nd Quarter results .Below analysts guesses. Yes that is what they really are! The medical device maker posted a 12 per cent rise in net profit to $US167.6 million for the first half, but quarterly revenue rose just rose 2 per cent to $US384.3 million, which missed consensus of $US398.1 million.

Cochlear Limited (A$57.85, -3.7%) copped a $131m ruling against them in the US on a patent infringement matter. Looks like their defence fell on deaf ears in this one.

Echo Entertainment Group Limited (A$2.41, unch) will sell its Jupiters Townsville casino to hotel and brewery operator Colonial Leisure Group for $70 million.

Around the grounds, in house stocks Regeneus Ltd (A$0.48, -2.0%),#IMC#,Strata-X Energy Limited (A$0.375, -3.8%) and RLE had a mixed day.

Tomorrows News Today

Microsoft reported after hours in the US above expectation which may help the US market. Sales of Xbox and software to businesses appear to be the driving factor. No mention of their 5 month search for a new CEO.I hear David Brent may apply, just depends on the ‘Bunts’ and the company car plan! May have to google that one I am afraid. Obscure English humour at work again!

Bank of England head Carney is now moving the goalposts as UK unemployment looks like it is close to 7%.It is going to scrap forward guidance and ignore 7% threshold for a rate increase.

Still in the booming UK, PM Cameron, who is attending the World Economic Forum at Davos, will say fracking is already “flooring” energy prices in the US, and could be a “fresh driver” of UK growth.He will say fracking is essential to “make a success of globalisation”. Opponents say fracking can cause water contamination and environmental damage.

The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England. Certainly a lot of hot air comes out of Manchester!

Singapore’s fourth-quarter home prices slid for the first time in almost two years, trimming annual gains to the smallest since 2008 as mortgage curbs cooled prices in the Southeast Asian city.

Citic 21 rose the highest in intraday trading in almost 14 years after Alibaba Group Holding Ltd., the owner of China’s biggest e-commerce business, said it would invest in the company to enter the drug-data industry.

Shares in China’s Lenovo, the world’s biggest PC maker, have risen after the firm agreed to buy IBM’s low-end server business for $2.3bn.

In Zombieland, figures from the Bank of Spain showed the country’s economy grew by 0.3% in the last three months of 2013.It was the second quarter of growth in a row for Spain, although the economy shrank by 1.2% over the year as a whole. BUT, figures from Spain’s National Statistics Institute showed that the country’s unemployment rate edged up slightly to 26.03% in the fourth quarter of this year from 25.98% in the previous quarter.

And in far more frightening news Justin Bieber was arrested for drink drinking and assaulting a police officer (with his voice).Fox News interrupted a US Senator live to bring that story!

And still in the US the drought, followed by the snow has caused cattle prices and milk prices to hit all time highs. The size of the U.S. cattle herd has dropped to a 61 year low. Should bode well for Aussie wheat farmers and other Agri companies.This story will gather more legs going forward as the shortages and prices begin to really bite.

Things in the South China Sea are heating up and PM Abe is doing his bit to wind up the Chinese even more, comparing their relationship to a 1914 style British and German one. All this while China is trialling its very first aircraft carrier. With more to follow. “Goose, it’s time to buzz the tower.” Really?

Enjoy the long weekend.

Clarence

Xxxx

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