There’s a bear in there. And a chair as well. There are people with games. And stories to tell. Open wide. Come inside.Its the ASX 200! Well that finishes the week on a weak note..More like a bum note! Overseas capitulation on increasing risk that rates will rise sooner rather than later in the US and the UK hurt badly.The Apple bendy phone and IOS recall didn’t help sentiment either with punters overseas happy to lock in some profits Once again we saw across the board weakness with financials continuing to suffer the slings and arrows of the Murray report.For the week we are down a massive 115 points with todays 69 counting for over half of the falls to 5313.Continued US dollar strength/Aussie weakness and the Iron Ore price skittishness are a couple of the reasons but the market had got ahead of itself and the worsening local economy is front and centre in investors minds.Abbott may look good on the world stage but here with deficit of $48bn and a budget that seems to be going nowhere ,its hard to get excited about the transition from mining to whatever else we have.The only market currently booming is property and the RBA is about to whack that one too. Financials resources,consumer,telcos and healthcare stocks were mauled.No where to hide on days like today.The trouble with crowded trades ,like everyone long Aussie banks is that when you try to exit the gift shop in an orderly fashion it doesn’t seem to work that way!My call 5200.Not that far away now.
The winners for the day ,which is quite something were Cover-More Group Ltd Northern Star Resources Ltd (A$1.34, +4.7%),Aquarius Platinum Limited (A$0.365, +4.3%),Chorus Limited (A$1.675, +3.1%) and Newcrest Mining Limited (A$10.54, +2.1%) in large caps,Perseus Mining Limited (A$0.355, +9.2%),Medusa Mining Limited (A$0.89, +9.2%) and Silex Systems Limited (A$0.72, +6.7%) in the smalls.Losers were everywhere but Mount Gibson Iron Limited (A$0.56, -8.2%),Liquefied Natural Gas Limited (A$4.09, -6.0%),Nuplex Industries Ltd Cabcharge Australia Limited (A$5.51, -4.0%) and Vocation Ltd in the bigs plus Clinuvel Pharmaceuticals Limited announcement on an Oral explanation?),Range Resources Limited (A$0.02, -13.0%),Urbanise.com Ltd and Northern Minerals Limited (A$0.23, -8.0%).Volume was big at around $6.5bn after options expiry last night.Aussie dollar trading at 87.55 whilst digital tulips at $467 and gold at $1222.
Asian markets were weaker with Japan especially bad but then it has quietly ignored the doom and gloom around the traps .Tokyo was down 1.1%,HK down 0.4% and Shanghai down 0.11%.
Stocks and Stories
Clive Palmer’s company Mineralogy has moved to terminate its partnership with Citic Pacific, the the Chinese operator of its $10 billion iron ore mine in Western Australia.No wonder he is a grumpy bugger.Seems to have a lot going on.
As the big three Iron Ore companies continue to pump out record production numbers they maybe should pause for some thought with consumption now falling away as demand fell for the first time since 2000 on a slowing local economy.Keep digging guys.Maybe a grave for some that you are digging.Five year lows in the ore price.
Real Energy Corporation Ltd house favourite released some more encouraging gas numbers from their current US drilling campaign.Looks promising indeed.
Lynas Corporation Limited (A$0.115, unch) remain suspended pending an equity raising.
Japanese inflation has slipped to a ten month low despite all the yen being printed and the hike in sales tax.Not going to plan Abe?Stripped of the effect of April’s sales tax increase, inflation was 1.1 percent, according to the BOJ’s estimates.
Tomorrow’s News Today
Bank of England chief cashier ,Mark(circus) Carney is warning of higher interest rates ahead.Seems house prices have peaked too.Sterling forging ahead now after the Scottish question has been answered.
Legendary Japanese day trader has this advice “”Buy stocks that are being bought, and sell stocks that are being sold.”Simples!
This is a scary number 6.21 million people work in the U.S. financial industry and more than half focus on retirees!In China the ageing population accounts for 8% of GDP and by the year 2050 they will have a quarter of the worlds population over 60!Or nearly 500m people over 60!!Grey market is going to be high.Healthcare,financial services,services and travel to be big focus.
This is worrying as PIMCO ,the world’s largest bond fund is under the microscope,but the assets held by bond exchange-traded funds have ballooned to more than $270 billion from about $57 billion at the end of 2008.Not sure why its worrying except Bloomberg says so!So it must be.And on PIMCO,the former head honcho El-Erian has revealed that he quit when his daughter asked hims question.He seemed to have no idea he even had a daughter he was so busy!
If you go down to the woods today ,you might see some bears in Alibaba as the shorters have now sold around 9m shares or about 2.4% of the available stock.Think they are on to something!!
This is great.The finance man in charge of the TESCO fiasco in the UK is to receive a 1m pound payout as a golden goodbye for a job well done.He resigned in April so its not all his fault but he did get 400k in the six months for consulting to the new team.How do I get one of the those jobs!Stock down 15% this week as they reeled a 1/4 billion hole in the accounts.Back of the sofa perhaps?
And still in the UK ,loan sharks in nice suits company Wonga, is about to report horror numbers despite charging some clients nearly 6000%.The company is expected to report annual profits of about £50m for 2013 compared with £84.5m the previous year.
New virus to hit the net.Shellshocked.Prefer it to a physical virus like Ebola though.Yet another reason not to rush into the market at the moment.
Expect a bounce on Wall Street tonight and a better start to the week next week before we give up again.
And go the Swans!
That is all