dh_banks-20121107071110354984-620x349aussie abnks

 

It’s all about the banks stupid. Wasn’t it always! Australia and New Zealand Banking Group Limited (A$30.56, +2.2%) kick started the banks reporting season with a great results for the three month period. Commonwealth Bank of Australia (A$75.92, +1.4%) tomorrow and expect more of the same, cost cutting up,bad debts down! However Macquarie Group Limited (A$53.52, -3.8%) failed to impress today with an update of their forecasts. But the strength in the banks was the big driver. After a lacklustre start to the day, down 17, the gathering strength saw the banks drag us into a very positive 32 up day to finish at 5255 The big green blob accounted for 75% of the rise today with BHP Billiton Limited (A$36.55, +0.1%), Telstra Corporation Limited (A$5.05, +0.2%) and Origin Energy Limited (A$14.67, +2.0%) putting in some hard index point yards too. The big story of the day was the Aussie dollar which screamed through 90 cents having been banging on its door for some time. Good business confidence figures ensured a positive warm glow and shorts covered in the currency. It has been one-way traffic here since the last RBA meeting and the jaw boning to get the Aussie down is not working at all. End of the rate cuts really hurting local manufacturers again. That is the ones that are left!

Gold stocks continue to head higher as the shiny stuff puts in four straight days of gains. Who would have thought? Well maybe readers of my morning or afternoon rants as I suggested that with everyone short and bearish, it may be a good time to push higher.

As well as the usual shenanigans in the market we had the unusual issue today of the market actually closing for a period of time. Can’t be the volumes causing the issue but big fail from the ASX.

In the sectors, financials and insurers the winners with even QBE Insurance Group Limited (A$11.39, +3.5%) rallying as did AMP Limited (A$4.36, +1.6%) and Insurance Australia Group Limited (A$5.47, +1.9%). Today’s disaster though was Cochlear Limited (A$53.68, -8.8%) whose story is falling on deaf ears. As one of the most heavily shorted stocks on the exchange they are open to some serious downside moves given half an excuse. Today we got that excuse too with numbers disappointing. But their loss was ResMed Inc. (A$5.06, +2.4%) gain as the stock picked up some lost ground today on switching to snorers rather than the deaf ears. In other health stocks Acrux Limited (A$1.95, -4.9%) fell away as did Mesoblast Limited (A$5.77, unch) and Greencross Limited (A$8.18, -6.0%), the vet people.

In resource land, Newcrest Mining Limited (A$11.45, +3.1%) continued their run today on the gold price, dragging others in their wake. Silver Lake Resources Limited (A$0.69, +3.8%),Evolution Mining Limited (A$0.82, +3.1%),Kingsgate Consolidated Limited (A$1.29, +7.5%) and Beadell Resources Limited (A$0.81, +2.5%) all doing well. Seemed to be a little switching out of RIO Tinto Limited (A$66.64, -0.6%) into BHP Billiton Limited (A$36.55, +0.1%) but Fortescue Metals Group Ltd (A$5.64, +0.9%) held steady and we saw gains in Iluka Resources Limited (A$9.15, +2.2%), Panaust Limited (A$1.685, +2.1%) and Oz Minerals Limited (A$3.40, +0.9%).

Infrastructure stocks improved with AGL Energy Limited (A$15.17, +1.1%),Duet Group (A$2.08, +0.5%) and Energy World Corporation Ltd (A$0.355, +7.6%) to the good. Consumer stocks were mixed as the focus is the banks and results.However retailers were a little on the nose with Myer Holdings Limited (A$2.56, -1.9%) leading them down with Harvey Norman Holdings Limited (A$3.07, -0.3%),JB Hi-Fi Limited (A$18.25, -1.1%) and DJS# following in sympathy.

Big podium finishers today included lots of golds Oceanagold Corporation (A$2.50, +8.7%),Independence Group NL (A$3.85, +2.7%),Newcrest Mining Limited (A$11.45, +3.1%),Evolution Mining Limited (A$0.82, +3.1%),Regis Resources Limited (A$3.00, +3.4%),Beadell Resources Limited (A$0.81, +2.5%) whilst G8 Education Limited (A$3.65, +4.3%) ,Bank of Queensland Limited (A$11.55, +3.8%),Ainsworth Game Technology Limited (A$4.31, +3.6%) and Lynas Corporation Limited (A$0.275, +3.8%) got in on the act in the biggies and FAR Limited (A$0.059, +40.5%) was far and away the best mid cap along with Saracen Mineral Holdings Limited (A$0.35, +9.4%) and APN News & Media Limited (A$0.43, +10.3%). Crashing out in the finals, catching an edge were Bougainville Copper Limited (A$0.47, -13.0%),BGG#,Acrux Limited (A$1.95, -4.9%) and Boart Longyear Limited (A$0.455, -3.2%) in the smalls whilst bigger disasters were Macquarie Group Limited (A$53.52, -3.8%), Bradken Limited (A$4.72, -9.4%),Cochlear Limited (A$53.68, -8.8%),Greencross Limited (A$8.18, -6.0%) and TABCORP Holdings Limited (A$3.49, -2.2%).

Volumes today were slightly impeded by the ASX closing mid afternoon but at around $3.5bn were still on the skimpy side. Aussie dollar at 90.1 cents Bitcons at $634!!! Gold $1283. $1300 anyone?

Asian stocks were better as the MSCI Asia Pacific excluding Japan Index advanced 0.9 percent to 448.46 in Hong Kong, while the Nikkei was up 1.8% pre Yellen’s speech. The regional gauge has climbed 3.1 percent from a five-month low on Feb. 5

Stocks and Stories

Australia and New Zealand Banking Group Limited (A$30.56, +2.2%) That will do Pig! In the first bank profit update of the calendar year, ANZ today said unaudited cash profits rose to $1.73 billion in the three months to December, 13 per cent higher than last year. Expect a big number from CBA tomorrow. $4.1bn is the number to look for.

Macquarie Group Limited (A$53.52, -3.8%) reported today suggesting that they were happy with their forecast. Market seemed in no mood to be happy with the forecasts as they were expecting better as Global markets recover. This one is looking like a chance to get some stock. Expect a rally tomorrow!Well overdone.

Cochlear Limited (A$53.68, -8.8%) announced a 73 per cent fall in interim net profit and implied it will miss its full year profit guidance as well. Interim net profit slumped to $21.0 million due to cash put aside for a patent dispute, customers delaying purchases until new products are launched and foreign exchange contract losses. The company reported a 5 per cent fall in revenue to $371.1 million and a 54 per cent fall in earnings before interest and tax to $49.4 million, in the six months ended December 31.

In house stocks G8 Education Limited (A$3.65, +4.3%) continued to kick following yesterday’s announcement of the acquisition of 69 centres and APN News & Media Limited (A$0.43, +10.3%) had a great day after the sale of brands Exclusive for $2m.Not sure why they deserved a 10% jump but hey I’ll take it!

Bradken Limited (A$4.72, -9.4%) also posted disappointing interim results with net profits were down 18.5 per cent on the previous corresponding period to $38.1 million, against the consensus estimate of $32.1 million.

Forge Group Limited (A$0.915, unch) look like they have appointed an administrator! Ooops, Blackrock will not be happy as they were the recent buyers, although they have bailed on some recently, the ANZ’s patience appears to have run out.

GrainCorp Limited (A$7.71, unch) is investing $125 million into its edible oils and spreads manufacturing operations to create a strategic hub in Victoria, the company said in a statement.

Seems like the value of all Aussie houses has pushed through the $5 Trillion mark for the first time. Amazing stuff. That is a third of the US National Debt. 3 Australias. News today as well that investors continue to dominate the home lending market with 39.8% of all housing finance commitments in Dec-13, highest since Oct-03 which was record high proportion (41.2%)

David Jones Limited (A$3.12, +0.3%) today announced that their chairman Peter Mason Ex AMP will quit along with the two directors that bought the shares after Myers approached them. Finally some sanity!
Tomorrows News Today

This is the power of good research. In the UK the media used Morgan Stanleys’ numbers in a report about the forthcoming Barclays Bank profit report.They were so close that the bank had to report a day early! Not quite sure why they felt the need to come out early though. Maybe embarrassed about the leak of data this week!Anyway small miss on the numbers.

Yellen gets to talk tonight in the Fed’s Semi annual state of the nation address. Should prove interesting given the volatility of a number of economic indicators recently.She has only been in the job a few weeks so not expecting much change to the present course of action.

Always thought the whole Bitcon thing is a bit of a joke but volatility went ballistic last night as it experienced more than usual volatility overnight, tumbling as much as 21 per cent to $US535.55 before recovering to around $US660.Apparently a Japanese Bitcon exchange shutting down was to blame! Tulips anyone!

Australia’s 10-year yield climbed to a two-week high of 4.18 percent today. The Reserve Bank of Australia this month raised its economic growth and inflation forecasts, reflecting a weaker currency, and signaled an end to its rate-cutting cycle.

News today that Bull Market pundit Charlie Aitken has stopped writing his missive as he was concerned that it was too widely read and passed around for free.Didn’t hurt his profile any! Maybe he was worried about some of his calls! Anyway with Coppo gone and now Charlie, maybe my chance to shine. Email me if you are interested in my morning report. Better than theirs anyway!

Woman’s Day paid $20,000 for Schapelle drinking a beer! Has the World gone mad?

 

 

Clarence

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Get a Global take on things at www.ntmarkets.com

Get a Global take on things at http://www.ntmarkets.com

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