Morning sports fans,
The trouble with everyone being long ,leveraged and in love with the same stocks is when someone shouts fire, there is a rush to the exit…in the US that love affair has been with the highly geared performance stocks like Faceplant, Twetter, Linkedout and the biotechs…
…now someone seems to have yelled fire!!On Friday we saw the Dow take another hit ..but let’s put it in perspective the Dow is 16,000 NASDEAD is 4000 and the S&P 500 is 1815…hardly a disaster….yet!!!Lots of coverage of Marc Faber ,Dr Doom, predicting another 87 style crash. Now I was there in 87 and in 2008…very different crashes…87 only really affected equities and other assets..no effect on the real economy whereas 08 was everything got smashed and worse the real economy took it much harder…give me 87 any day!
So the big question is ,Is Marc Faber gonna be right?….he has predicted 6 of the last three crashes correctly…let’s face it he must be right again sometime!!But not this time…true, things have got a little heated ,hardly surprising when you give 20’something hedge fund traders free money and tell them to go for it…always an accident waiting to happen like giving my 17 year old son a 911..sure he is having a ball, look so cool and it’s just a car right but we all know it’s going to get wrapped round a tree at some stage….that’s why we have insurance(and we hope air bags that save his life).And so it is with the markets…they have got overextended not so much here but I see the chance of a crash (20%plus) as remote..The chance of a 10% fall back down to 5050 again here is possible…we have a massive concentration here in the financials…they are our hot trade..everyone owns them so if there is a scramble for the exits then it could get messy for a while but would be a good chance to pick some up. Remember “Buy the Banks Die with the Banks!!”
Our market is going to be quiet today..my blue Mercedes made record time today as the city seems deserted…Easter is coming…ANZAC next week and school holiday have started…wish I was going to Byron for Blues fest like my son but I am banned as he will be there. Not cool enough apparently!!
Iron Ore down SPI down 14 …we may shed around 20 points again…5400 may hold us…Up by the lift down by the stairs?
The S&P 500 fell 2.6 percent to 1,815.69 for the week, as the benchmark gauge erased its gains for the year. The Nasdaq Composite sank 3.1 percent to 3,999.73 and the Russell 2000 Index lost 3.6 percent to 1,111.44.
Idea of the Day
I still feel that the market has room to get the jitters in May…we are in-line for a budget where logic goes out the window…increase of the pension age to 70 so we all have to work longer to pay for maternity leave to high income earners…maybe it should be backdated …or maybe there should be a cap on what the state gives you to have a child…..anyway the markets will get nervous about Uncle Joe and his merry band of razor men…more broken promises than the Rolling Stones on tour! ABC and SBS to merge but unfortunately will have no programs they can afford to make…Rage will run on an endless loop and with the BBC taking all the good stuff and putting on News Corp’s, Foxtel then there will not even be Midsomer Murders on it…Question Time will be downgraded to Query moment and Four Corners will be Three Points (of a triangle!).
Things to make me go mmmmmm!!!
Liverpool commemorated the Hillsborough disaster 25 years ago with a great win over Man City…think Chelsea may be out of it now…Liverpool or City will win…but we may win Champions league..
Over the weekend, there has been some questions asked over the report that the CEOs of the 6 largest US banks: JPM, BAC, GS, MS, C and WFC, collectively made $96.1 million in 2013, more than $86.3 million the year before and the most since the financial crisis.
US Economic data had little effect on the market with Consumer Sentiment rising to 82.6 from 81.0 while the PPI rose 0.5% which exceeded forecasts.
Mario Draghi commented that a sharp appreciation of the Euro would trigger more ECB stimulus. The DAX closed down 139 points to 9315, the CAC 40 fell 47 points to 4365, the FTSE lost 80 points to 6561 and the Stoxx 50 finished down 36 points to 3116.
German inflation hit a 3 year low of 1.0% p.a., continuing its slide for a 4th consecutive month. The slump continues from an annual rate of 1.2 % in February and 1.3% in January. Stagflation is a real issue coming to Zombieland!!!
The Greeks are so pleased that their Five Year Bond auction got away so successfully that they are going to do it all again…and again..and again…and again!!!Expect Moaning Mertle got a great reception in Athens too over the weekend..
Things are hotting up in Ukraine as the Russians have now been given the excuse they need to defend Russian speaking East Ukrainians…this could get ugly and civil war with Russia helping out seem more likely now!!May see some more gains in Gold…
Germany’s finance minister Schauble told reporters “It’s good that markets have become more confident again. But I’ve said that in parts they’re already exaggerating again.”
Meanwhile in Switzerland, The Swiss will vote in a national referendum May 18 on whether to create a minimum wage of 22 francs ($25) per hour, or 4,000 francs a month. About 90 percent of workers in Switzerland already earn more than that.
The International Monetary Fund official responsible for advancing financial stability reforms says it would be a big mistake to shield Australian banks from new global banking rules even though they survived the financial crisis relatively unscathed.
Nexus Energy says it will need to go into voluntary administration and take an $18 million writedown on its Longtom gasfield in Bass Strait if an agreement to sell the company to Kerry Stokes’ Seven Group Holdings falls through and a rival bidder does not repay Seven bridging finance.
Market manipulation appears to be rife on the Australian share market when compared to other major markets around the world, according to the country’s leading market researchers.
Melbourne based MMG is the focus of the global mining industry this morning, after the Chinese-owned miner finally completed the $US5.85 billion ($6.22 billion) purchase of Glencore Xstrata’s Las Bambas mine.
I am having a competition to see who can get the most followers on Twitter between my Melbourne Broker mate and me…I am in front and want to stay that way so if you tweet ot twit then follow me on @henryj007…love to have you along…
A recent article in the New Zealand Dominion Post reported that a woman, Anne Maynard, has sued Wellington Hospital, saying that after her husband had surgery there, he lost all interest in sex.
A hospital spokesman replied:
“Mr. Maynard was admitted for cataract surgery. All we did was correct his eyesight.”
Have a great day
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