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Morning sports fans,

Overseas last night the Dow rallied as Yellen (not screamin) came out and said that things weren’t that flash really and she was going to pump in more free money for longer! Result Dow rallies!

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Internet stocks though didn’t fare too well with things like Twitter just collapsing…it sank another  3.7 % after leading a selloff in Internet shares yesterday with an 18 percent tumble. AOL (Christ are they still around) were down 21% after missing estimates..Yahoo(seriously) were down too, despite owning a large slug of Alibaba (and the forty thieves) which is set to become the world largest IPO ever…maybe a bit of fund raising to pay  for it but it’s a bit early!

 

 

Today will probably be even quieter than yesterday as we head into the Budget on Tuesday. The big news out this morning is the NAB number which surprise surprise is huge…isn’t it always so…the big driver was the reduction in bad debt charges for both here and more importantly the UK where they own their problem child. Last report from Cameron so no real surprises and no sale of UK assets but then this is turning into a good thing as the UK economy is punching well above its weight.

 

Expect to see our market rally in thin trade with the banks probably underwhelming after the NAB number…its confession season soon so expect a few companies to fess up pre the year end with sins and this to sap confidence …and there’s the budget which is shaping up to be a doozy…sure Gerry Harvey will be squealing and the RBA will have to keep rates on hold for much longer as the economy stalls…

Still expect the market to trend down and my target is 5300 by months end.

Idea of the Day-Sticking with UNS despite falls in the US…starting to get interested in LYC !!( I know I have finally lost it!!!!!)

To err is human (so I must be erring a lot) but it seems that my bullishness on UNS has been a little costly to one or two punters that have followed me in..yes I do own them myself so I share your pain!!last night they got whacked another 6% so it’s not much fun out there but I remain positive and reluctant (maybe stubborn ) on this one..they are due to report their numbers on Monday and our analyst (kiss of death I might add) is baffled as to why they have been so weak ever since he released a buy recommendation on them….think the biggest reason they have fallen is he likes them! Anyway I am sticking with it cos that’s the kind of numb skull I am but can understand those that are nervous…

Anyway I am going to go out on a limb with another Spoodle today…Lynas!!!LYC recently announced they are raising $40m through an SPP and a placement to restructure some debt and buy them time as the plant ramps up…the stock is 14c at the moment and I would expect that it will remain under pressure until the fund raising is completed as existing shareholders sell some shares to afford their SPP ,crystalising the loss for tax purposes and allowing them to fund the $15,000 worth of shares…also the bears are out in force but I would expect the stock to pick up after the pricing period for the new shares which are being done at a 17.5% discount to the stock over five days…expect weakness in those five day from 21st to 27th May…now I would be looking at accumulating and of course taking up the SPP if an existing shareholder  during this time…they are now going to be in a better position going forward with this funding deal..legal challenges look to be over and the production numbers are ramping up as is the demand for rare earths and the Chinese are clamping down on polluting rare earths production…and the final positive is the Japanese are behind the company with the funding arrangements…and they don’t like the Chinese having the monopoly…very speculative but if they get to 12 and they probably will then it’s time to get the buy button in action…..again though very speculative but could be worth a punt for the braver souls out there

Things to make me go mmmmm!!!

The Liverpool choke…Man City look home and hosed..4-0!

NAB has lifted its cash earnings by 8.5 per cent to $3.15 billion in the six months ended March 31, meeting expectations. The company boosted its interim dividend by 6¢ to 99¢, ahead of expectations for a 98¢ dividend. The company’s bad and doubtful debts charged fell 52 per cent from the previous corresponding period to $528 million.

Good to see that Abbott and Jokin Joe are going to sweeten the pill with infrastructure spending…course that infrastructure is going to be more roads to clog up..nothing like clean energy or hi tech stuff just tarmac and cars to fill them…nation building my foot!

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Bank stocks in Europe were weaker after Europe’s largest bank, HSBC said 1st Q profit fell 20%, on lower investment bank revenue. Its shares dropped 1.3%.

 

The Micex Index of Russian stocks surged 3.4 percent for its biggest gain since March and the Ruble strengthened 1.4 percent versus the dollar as RasPutin pulled back his troops from the border and suggested that the East Ukrainian referendum should be delayed…gold got whacked as these tensions eased…I suspect that the booing of the Russian contestant in the much anticipated Eurovision song contest has got him worried! Obama should have threatened that straight away..no one will vote for the Russian Grannies…Europe means business! Rasputin is scared!!!

I am doing a project on Healthcare at the moment so have been doing some research ..here a few thoughts….Global spending on cancer drugs alone rose 28 percent to $91 billion in 2013 from $71 billion in 2008. Many health plans sold through exchanges established under the Patient Protection and Affordable Care Act are requiring patients to pay a percentage of the total cost of high-priced drugs, rather than a fixed co-payment. The change means the higher the price of the drug, the more patients may have to pay — until they reach their out-of-pocket limit….no wonder the price of drugs is escalating out of control..this is what is causing budget stress throughout the West and here downunder.

Drug costs have become a significant issue as a new treatment for the liver-destroying disease hepatitis C, which afflicts almost 3 million people in the U.S seems to be pretty expensive. The new drug called Sovaldi, costs $84,000 for 12 weeks of treatment, or $1,000 per pill. It usually cures the disease when used in combination with other drugs. Getting Hep C cured would cost $400bn in the US alone..so you can see what the prize is but how do we pay for that…research suggests that the Hep C drug could be provided for $136 for a 12 week course!!!!!!!!!!!!

 

The Fed reported that consumer credit number for March: at $17.5 billion, it not only blew out the expectation of a $15.5 billion increase ,but it was the highest monthly increase since February 2013.Trouble is all the consumer credit growth is coming through student loans and to a lesser extent car loans…here’s a scary graph …

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Of course some of that loan growth is from the Fed as well!

 

From last night’s afternoon report but it’s worth another run!!!

 

Not sure this is what the Fed does but a lady in the US has just been jailed for scrubbing five dollar notes clean and then running them through her inkjet printer and turning them into $100 notes…brilliantly simple..Janet? Over to you! The Greeks are on to this and have cleaned up some $100 bills and printed them with $5!Of course if you are a tech entrepreneur you don’t even have to have a $5 note just the mere thought that you may hold the $100 is enough to give you a billion dollar valuation. Because it’s different this time!

 

Think this is where I have been going wrong with my printer!!!!

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And finally….thanks to big Al for this one..hello Al…

A man walks into a cocktail lounge and approaches an attractive woman sitting by herself and asks, “May I buy you a cocktail?”

“No thank you,”  she replies, “Alcohol is bad for my legs.”

“Sorry to hear that. Do they swell?”

“No, they spread.

Have a great day

Clarence

XXXX

 

Any financial product advice contained in this email is general financial product advice only and does not take into account any one person’s objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.

 

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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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