Friday afternoon report

Another sorry day in paradise as broad based losses in the big stocks swept the market. After flirting with a positive reaction to Super Mario’s cunning plan to cut rates to ever larger negative numbers, we succumbed to the woeful state of the Iron Ore market and the now weakening banking sector. Seems that punters are happy to take profits in the banks and the current issues they have politically are weighing heavily. My rudimentary bank index is now trading at 184 which is not that far off its all-time high around 188 so expect there is still some more leakage to come. It only takes one bad apple ,or in this case two Macquarie Group Limited (A$57.75, -0.7%) and Commonwealth Bank of Australia (A$81.30, -0.3%) to spoil it for everyone. In the end we closed near our lows at 5599 which is down 26 for the week. The biggest losers have been resource stocks this week with Fortescue Metals Group Ltd (A$3.92, -3.2%) at two year lows, BHP Billiton Limited (A$35.65, -1.0%),RIO Tinto Limited (A$61.30, -1.4%) and Newcrest Mining Limited (A$10.59, -3.2%) all feeling the pain.

In the industrials Telstra Corporation Limited (A$5.64, -0.5%) continues to hold up quite well but other widget makers fell with Tpg Telecom Limited (A$6.12, -0.5%),Macquarie Telecom Group Limited (A$5.70, -3.4%) in the telcos, Aristocrat Leisure Limited (A$5.52, -1.1%),Tatts Group Limited (A$3.30, -1.2%) and Crown Resorts Limited (A$15.16, -0.1%) in gaming stocks. Healthcare was also a battlefield ,taking casualties were Csl Limited (A$73.41, -1.3%),#SHC#,Ramsay Health Care Limited (A$52.37, -1.0%),Cochlear Limited (A$69.90, -1.5%) and ResMed Inc. (A$5.68, -1.2%) in MASH. In financials Challenger Limited (A$7.75, +4.0%) were a bright spot as were AMP Limited (A$5.66, +0.4%) and #QBE but rest were nasty. Property trusts off between 0.5% and 1%.

Big winners today were few and far between but Energy World Corporation Ltd (A$0.36, +1.4%),Challenger Limited (A$7.75, +4.0%),G8 Education Limited (A$5.58, +3.0%),Cabcharge Australia Limited (A$5.51, +2.6%) and #PBT#,Toro Energy Limited (A$0.091, +13.8%) and Poseidon Nickel Limited (A$0.225, +4.7%) in the smalls bucked the trend. However golds took a hit with Northern Star Resources Ltd (A$1.455, -9.6%),Oceanagold Corporation (A$2.65, -8.3%),Evolution Mining Limited (A$0.68, -8.1%),Regis Resources Limited (A$1.69, -6.1%) and Papillon Resources Limited (A$1.585, -4.8%) copping it plus Acrux Limited (A$1.61, -15.7%)(finally),#TIS# and Maverick Drilling and Exploration Limited (A$0.25, -7.4%). The Aussie dollar at 93.40 and the tulips at $522,gold at $1262.Volume was hopeless too at around $3.3bn!Nothing to get excited about at all.

Asian markets were mixed HK down 0.3% shanghai up 0.5% and Tokyo unchanged. The big battles will be in currency and bond markets as the world adjusts to Mario’s brave new world.

Stocks and Stories

There seems to be no stopping G8 Education Limited (A$5.58, +3.0%) which is powering ahead after settling another 14 childcare centres. It now has 375 childcare centres with nearly 27,000 places in Australia. That’s a valuation of $66,000 a place. Does seem quite a lot really!

Performance of Construction Index shows good solid growth again with fastest gains since November. The index rose 2.4 points to 55 last month, its third straight month above the 50 level that indicates growth and the highest level since November, when it was 55.2.

OZ Minerals has a new MD with ex RIO executive Andrew Cole appointed today. Cole will run the copper miner alongside its current chief financial officer, Andrew Coles, joining OZ on December 3 to replace outgoing managing director Terry Burgess. Base salary of $750,000 a year is not a bad earner.Let’s hope he can do better than the last guy.

Talking of great jobs. Qantas chief executive Alan Joyce has received a 40 per cent fall in his take-home pay to just over $2 million this year as the airline seeks to freeze wages across the company. Poor bloke.

Woolworths Limited (A$36.31, unch) says it will invest $750 million into reducing food and liquor prices in 2015.Aldi chomping at it’s heels. Woolworths, however, expects earnings to grow 4 per cent to 7 per cent this year and Mr O’Brien remains confident the group will eventually achieve its 10 per cent profit growth aspirations.Maybe they have learnt the lesson of Tesco in the Uk which have been hit hard by Aldi and issued four profit downgrades.

Tomorrow’s News Today

NATO summit in wales. Hope they all packed their clubs.

Non-farm payrolls tonight!!Big number required. 230,000 is expected any number above 200,000 jobs means it will be the 7th consecutive month of plus 200.solid performance.

US judge rules BP was “grossly negligent” and guilty of reckless conduct in the lead-up to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. BP has set aside $43bn to cover fines, legal settlements, and clean-up costs. Will need a lot more after this. Talk of $18bn!

New iPhone next week. Biggest event of the week!

If you would like to contact Henry Jennings about his Market Wrap, please call him on +61 2 9226 0067 or email hcj@bby.com.au

After the introduction this year of sales tax in japan ,things have gone so badly that Finance Minister Aso has dreamt up plan B to stimulate the economy.This story will gather a lot of interest. A supplementary budget perhaps.Joe, you watching?

Nickel is poised to advance for a fifth week on concern ore supply will decline as the Philippines considers banning exports of unprocessed minerals.The metal in London is set to rise 3.2 per cent this week.

Trouble for our NZ cousens as dairy prices have been hit by about 6% in August and now sit near a two-year low, partly due to troubles in the Ukraine and sanctions on Russia.

Lego is officially now more popular than Barbie! Biggest toy company in the world. Amazing for coloured bricks. Gotta love those films.

One day in prison for every €50m lost by the French rogue trader Jérôme Kerviel, who was freed by an appeal court on Thursday. Served just 110 days of a five year sentence.

That is all

Clarence

Xxxx

Advertisements