Well, seems we are starting May in a sell mode as the market slipped away today, singularly unimpressed by the Australia and New Zealand Banking Group Limited (A$34.07, -1.2%) result, the Commission of (Courageous ideas) Audit, the Chinese PMI and the Wall Street death defying rally! The ASX 200 tumbled(love these emotional words. Trashed/ crashed/tanked; pick your favourite, all good!) 40 points to 5449 today having nudged 5500 early and failing to push through. Financials took a bashing with the big four all succumbing to profit taking and escaping hot air as we await more results next week. Yesterday’s Woolworths Limited (A$36.52, -2.1%) numbers continue to weigh them down and the struggling Iron Ore price did nothing to help either. Big resource stocks were in the sights today with RIO Tinto Limited (A$60.79, -1.5%),BHP Billiton Limited (A$37.50, -0.7%) and Fortescue Metals Group Ltd (A$4.85, -4.0%) all getting whacked. There were few places to hide in the sector as Arrium Limited (A$1.15, -3.4%),Atlas Iron Limited (A$0.865, -4.4%),Flinders Mines Limited (A$0.02, -4.8%),BC Iron Limited (A$4.21, -3.7%),Bluescope Steel Limited (A$6.26, -3.2%) and Sims Metal Management Limited (A$9.61, -1.8%) were all trashed. Golds fared little better either with Newcrest Mining Limited (A$10.29, -1.6%) leading the falls followed by Perseus Mining Limited (A$0.325, -7.1%),Kingsgate Consolidated Limited (A$0.865, -3.4%) etc etc!!
In the industrial sector Telstra Corporation Limited (A$5.20, -0.4%) held up pretty well, one of the few it seems as the steam was running out of the banks at an alarming rate. National Australia Bank Limited (A$34.71, -1.7%) and Westpac Banking Corporation (A$34.70, -1.2%) to come next week but despite making a motza Australia and New Zealand Banking Group Limited (A$34.07, -1.2%) failed to launch. Seemed to the untrained eye that the growth is coming out of the bad debts falling which cannot go on forever. Housing finance though one of the other bright spots with domestic lending up 6%.Other industrials like Amcor Limited (A$10.19, -1.0%) pulled back as did the builders like Csr Limited (A$3.57, -2.2%),Adelaide Brighton Limited (A$3.82, -2.3%),James Hardie Industries PLC (A$13.68, -0.3%),#BOR# and Brickworks Limited (A$13.33, -0.6%).Retailers were also disaffected with JB Hi-Fi Limited (A$18.86, -2.3%),Harvey Norman Holdings Limited (A$3.23, -1.5%),Myer Holdings Limited (A$2.17, -2.3%) and Premier Investments Limited (A$9.88, -0.4%) all weaker as the coming austerity sucks out the discretionary dollar.
So to the winners and losers. Gold stars today for Trade Me Group Limited (A$3.77, +3.0%),TABCORP Holdings Limited (A$3.80, +2.2%),QBE Insurance Group Limited (A$11.75, +1.5%)(finally),Bt Investment Management Limited (A$6.90, +3.0%)(good results yesterday)Mount Gibson Iron Limited (A$0.73, unch)(mystery to me!),AMP Limited (A$5.11, +1.2%) and Fairfax Media Limited (A$0.985, +0.5%)(won’t last ) whilst in the naughty corner with a black mark were Retail Food Group Limited (A$4.01, -4.1%),Syrah Resources Limited (A$3.70, -4.1%),Northern Star Resources Ltd (A$1.13, -3.4%),Independence Group NL (A$4.12, -4.8%),Fortescue Metals Group Ltd (A$4.85, -4.0%),Maverick Drilling and Exploration Limited (A$0.26, -7.1%) and Panoramic Resources Limited (A$0.59, -6.3%).
Volume was ok ish at around $4.3bn but not the stuff to get excited about as real investors continued to keep their cards close to their chests. Meanwhile in Asia the Nikkei was up 1% whilst China was not bothered and Hong Kong fell a little down 1.4%.Gold around $12.89 which is disappointing and the Aussie battler was 92.9 and the Bitcon was $490.
Stocks and Stories
The Commission of Audit is out and what did the markets do. Absolutely nothing! Lots of “Courageous” decisions to be made Minister! Good luck!
Australia and New Zealand Banking Group Limited (A$34.07, -1.2%) results showed a profit of $3.5bn.Not bad for the month! No, that’s six months really. Div up to 83cents.No specials, nothing else though .International business starting to kick some goals though.
Lynas Corporation Limited (A$0.165, unch) still in a trading halt. The tension is killing me. Capital raising perhaps?
Karoon Gas Australia Limited (A$2.46, unch) halted its shares from trading in advance of a “material” announcement on funding. Reports that it is in discussions with potential partners to help it fund exploration work in its Browse Basin and Carnarvon Basin ventures in Western Australia, in the Santos Basin in Brazil and the Tumbes Basin in Peru.
G8 Education Limited (A$4.64, -0.6%) looks like there are some suggestions from the Commission of Audit on Childcare. May have an impact if adopted.
Cabcharge Australia Limited (A$3.85, -0.8%) Reg Kermonde has sadly died today after announcing his stepping down from the company yesterday.
The Chinese PMI experienced a modest pick-up to 50.4 in April against 50.3 the previous month which was broadly in line with expectations.
Sydney’s median house price surpasses $800,000 for first time. Looks like the RBA is starting to realise that it cannot control the housing market in the old fashioned way with higher rates to prick the bubble as Chinese investor activity is all cash transactions. They apparently don’t care if rates go up or not.
Manufacturing activity has slumped again, new figures show the Australian Industry Group’s Performance of Manufacturing index fell 3.1 points to 44.8 in April, to its lowest level since July 2013.Yikes and this is before the Budget we had to have, to paraphrase Mr Keating.
Tomorrow’s News Today
Zombieland mostly closed for May day holiday today.
Portugal is to exit its three-year €78bn bailout without an emergency backstop, in a remarkable turnround for a country that only six months ago seemed destined for a second rescue programme.
This is why Pfizer wants to buy Astra Zeneca. Since 2007, the cost of brand-name medicines has surged, with prices doubling for dozens of established drugs that target everything from multiple sclerosis to cancer, blood pressure and even erections, according to Bloomberg News. While the consumer price index rose just 12 percent in the period, one diabetes drug quadrupled in price and another rose by 160 percent, according to the analysis by Los-Angeles based DRX, a provider of comparison software for health plans.
Starting prices for new drugs are escalating as well. Today, a cholesterol-lowering treatment for certain rare cases costs $311,000 a year and a cystic fibrosis medicine — developed partly with funding from a charity — costs $300,000 annually. Fifteen cancer drugs introduced in the last five years cost more than $10,000 a month, according to data from Memorial Sloan Kettering Cancer Center. Analysts, meanwhile, predict the first $1 million drug treatment may be just around the corner. As Jeff Goldblum said in Jurassic Park, “your scientists were so preoccupied with whether or not they could, that they didn’t stop to think if they should.”
More scary drug news. In 2012, Americans spent $263 billion, or 11 percent more than the $236 billion spent in 2007, according to U.S. government data. Considering 86% of all drugs are now generic that’s a huge amount! No wonder the west is slowing going bankrupt as health costs spiral out of control and the drug companies just keep getting richer.
Apparently Pigs don’t always fly as the huge piggy WH Group has cancelled its planned IPO in HK. It was supposed to be a $6bn float originally but then it was carved in half and now pulled pork it is!
The IMF has approved a $17bn bailout package for Ukraine. And where does the money go? Gazprom, which is Russian. All makes perfect sense. This one will end in tears.
Now I know we have a budget emergency according to the Chicken Littles, but my question is if we are in this crisis what about the rest of the world. They are far worse than we ever are. And if it’s a crisis why do we commit to $24bn of new planes,$5bn of PPL and Submarines. I mean submarines, what do we need subs for? Beats the hell out of me anyway.
China is poised to overtake the US as the world’s largest economy this year, earlier than expected based on projections. In 2011, America’s share of world GDP was 17.1%, using the purchasing power measure. China’s share was 14.9%. India overtook Japan to become the world’s third largest economy with 6.4% of GDP.
And finally, In the US, where else, the High Times Growth Fund aims to raise $200m to $300m to invest in the legal marijuana industry, which is projected to reach sales of $2.6bn this year. More than 80 per cent of cannabis related start-ups are self-funded by their founders. Hardly surprising really! Maybe they could do some Joint Ventures.
That is all