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Morning sports fans,
Just when you thought it was safe to head back into the water….US tanks…mediocre economic numbers and an Ebola case in the US hit the market..Russell small stocks have officially entered the correction territory…I was somewhat surprised by the bipolar market yesterday which had a 100 point trading range as investors waded in to buy the banks…maybe they read my comments from yesterday..anyway they will get another chance today to buy them..expect the market to get whacked first thing but steady after that as bargain hunters reappear…its thin out there ..school holidays…lots of computers trading and chasing stuff but yesterday’s rally was fast and hard and all premised on bad retail sales and slightly better Chinese PMI and oversold banks…Aussie dollar was walloped down to four year lows…although it is more a matter of a stronger US dollar …
The big event this month is the Fed’s last gasp of QEIII…after six years and trillions of dollars spent, it’s finally over…the retreat from the stimulus program seems to me much like the withdrawal from Gallipoli…it is very, very important to ensure the enemy thinks you are still manning the trenches until the very last minute and then like the ANZACS..poof..gone…or like Keyser Soze!
So where to…my call remains..5200 then time to get back in…banks are the interesting one as they enter the final furlong with regards to the Murray Inquiry and the need for capital controls…I reckon they will win ..they usually do..yesterday showed the latent buying in the banks that is on the sidelines ..so as they fall just nibble away…
Iron ore and gold perked up last night too…so some good news out there…bid rumours for RIO too from Glencore…but even the pretty girls get hurt in the bus crash!
Idea of the Day-Volatility is set to return to more normal levels-VIX 16.7 after hitting 10.2 at its lows! Will get to 20 soon!!
We have now entered a traders market..volatility is back!!100 point range yesterday…more to come…use baby…use it…work it….
Read a research piece today that Aussie banks are 30% overvalued as US rates rise…really?…rates will rise a smidge and they will ignore 6% yields here…muppets!
And let’s face it if rates rise in the US, which they will, I suspect that Aussie Banks will look (4) pillars of safe haven compared to US tech stocks..and others…
Things to make you go mmmmmmm!!!
Market worries are growing that Chevron will decide to drop its unconventional gas exploration venture with Beach Energy in the Cooper Basin, which would come as a severe blow.
So much for dairy to China… Whole milk powder auction price falls to 5-yr low.Ouch for Fonterra…and NZ!
Lend Lease has defied figures released yesterday pointing to a cooling in housing markets, selling 160 units in four hours at the weekend launch of a Brisbane unit project.
Peter Bond is stepping down as CEO of Linc Energy..remember them…genius move to head off to Singapore…some poor buggers still have shares..
Wotif.com awaits the ACCC’s final decision on Expedia takeover expected today.
Meanwhile in Zombieland, new orders contracted for the first time since June 2013, with firms impacted by Russian sanctions and a weakening economic environment.
You could not make this stuff up…in the US a man walks into a hospital; and says he is feeling pretty unwell and has just flown back from Liberia..what do they do..send him home with a Lemsip…so now 12 kids are in isolation awaiting results of Ebola tests and half his family!!
Seems the US government is taking the threat seriously as they have bought 160,000 Hazmat suits from a US company…they are available to other US citizens at $1200 each on ebay!!!You can get cheaper(do you want the Walmart version?)… of course I did look…and they are soon to be the new fashion item!!And Tony thought that Burqa’s were confronting..what about Hazmat suits….or his speedos!!!
In fact the Burqa looks a bit like a Hazmat suit? Coincidence?
And while we are on Ebola…West African economies are gone..this is scary.. “Annual inflation rates have doubled, fuel sales are down 35%, Liberia’s productivity is down 50-75%, and “micro-trade” financing is “completely depleted.”
And the Head of the US Secret Service has fallen on her earpiece after ‘JumpingOver the Fencegate!!’Why must we have so many …gates!!Anyway after a bloke jumped over the fence to the White House and ran into the building ,she has done the noble thing and resigned for this security breech!!!He pleaded not guilty too!!
I have a friend who believes in the global conspiracy to subjugate a docile population with media mind control and ensure the domination of the ruling class…not sure the ruling class could organise a drink up in a brewery!!
The Pimco Total Return Fund, managed by Bill Gross until last week, suffered an estimated $23.5 billion of withdrawals last month, its worst month ever for redemptions.
In US economic news, the ISM index dropped to 56.6 in September from a reading of 59 in August which was a weaker reading than the expected 58.5 by economists.
And yet another Aussie Biotech success story…looks like a company called Hatchtech has finally developed a cure for every parents night mare…headlice…final trials now with the FDA but looks promising…one treatment and they are gone…
In Argentina ,the head off the Central bank has quit…results…the stock index collapsed over 8%, bond yields spiked and the black-market peso dumped to record lows at 15.65 to the USD (drastically worse than the 8.51 official peso rate).
The trend is your friend until its ends…
And finally……a few quickies today..
Murphy says to Paddy, “What ya talkin into an envelope for?”
“I’m sending a voicemail ya fool!”
Paddy says “Mick, I’m thinking of buying a Labrador .”Blow that” says Mick “have you seen how many of their owners go blind?”
19 paddies go to the cinema, the ticket lady asks “Why so many of you?”
Mick replies, “The film said 18 or over.”
The Grim Reaper came for me last night, and I beat him off with a vacuum cleaner.
Talk about Dyson with death.
I went to the cemetery yesterday to lay some flowers on a grave. As I was standing there I noticed 4 grave diggers walking about with a coffin, 3 hours later and they’re still walking about with it. I thought to myself, they’ve lost the plot!!
And thought for the day from Head Honcho at the Bank of England, “Volatility has become compressed and asset valuations stretched across a growing number of markets, increasing the risk of a sharp reversal.”
Have a great Thursday