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Morning sports fans,
A big bounce yesterday but as I suggested, suspect it will be short lived…Iron Ore, Gold, Oil down again so suspect we may see weakness again in the resource stocks…although financials may carry some positives…seems crazy that a so called blueish stock like Metcash has fallen 25% in two days!!!I mean WOW has fallen 15 -16 % in a month…no wonder punters like TLS and the banks!!
Anyway as real investors continue to be deluged with new get in before Xmas raisings ,the computers are taking over the asylum…average trade size is now $5400…and volatility is back baby…when we get volatility there are two choices for investors…ignore it and just accept that it is noise(not sure Metcash is noise!!!!) OR trade the markets…most ignore it and switch off …can’t blame you really…we are taught that a buy and hold strategy is a good one..invest for the long term in quality companies and count your divs…well you know what that game has changed…ask a WOW shareholder…or STO,WPL,BHP etc…it is a new world order..guess that’s why people love Real Estate because it is not marked to market everyday..crikey if it was that would scare a few people…anyway the market is heading down led by an inept government and falling commodity prices…we lack leadership and companies are investing all their profits into dividends to keep SMSF happy and the share prices up whilst the growth in the business is sacrificed on eth altar of CEO options and yield investors…
RBA yesterday buried their heads in the sand as ‘do nothing’ Glenn kept rates on hold…reminiscent of King Canute!!!
Trying to hold back the oncoming recession !!
Idea of the Day
Just as we have seen protracted falls in Coal and Iron Ore over the last year or so..don’t expect the falls in oil to go away..or even be over yet…there is going to be a lot of pain as the Saudis wage war on Shale…the boost to World Growth through cheaper energy though will come…but at what cost?Just as the world changed in the 70’s on an oil shock maybe this is a rerun..the other way!!!
Things to make me go mmmmmm!!
Australian Q3 GDP will be released at 11.30am. Economists are forecasting growth of 0.7% for the quarter, up from 0.5% in Q2, with the annual rate expected to hold steady at 3.1%.Watch for comments from Smokin Joe..always good for a laugh…then… China: Non-manufacturing PMI at midday; HSBC services PMI at 12:45pm
There is a shift going on in the World …it is happening now and we are not part of it..seems that there is a huge movement to renewables…sorry Tony but everyone else is doing it..even the Governor of the Bank of England,Mark ‘Circus’ Carney is talking about oil and coal assets becoming stranded assets in the years to come…Renewable energy momentum is growing ..we will be left behind ..more importantly though the stuff we have to sell like coal and gas is going to be in less demand…ok not tomorrow, not even the next day but in 10-20 years it will be…and that’s how long some of our gas projects are proposing to run…actually a lot more than 20 years to justify the huge investment..but the movement is starting and it will grow and grow..there are a number of high profile investors getting out of fossil fuel stocks ..maybe a tad early but 65 buck black gold is a sign perhaps!!
Storebrand, a Scandinavian financial services company managing $74 billion of assets, announced last year that it would divest from 19 fossil fuels companies.
Bank of England Governor Mark Carney said to a committee in Parliament that he had instructed his staff to review whether sizable losses from stranded coal, oil and gas reserves could hurt banks, investors, insurance companies and the rest of the financial system.
Two German utility companies are closing or mothballing more than 19,000 megawatts of coal and gas plants over four years, citing reasons including air pollution regulation and competition from renewables.
Who knew it could be this easy…we had a cold war for years with the Russians, but a mere collapse in the Oil price has sent their economy into recession…anyone thinking about parrallels with Iron Ore and Coal would be purely speculative…anyway the collapse in oil has killed RasPutin’s Russia…inflation is now 9% and out of control as the Ruble goes to rubble….sanctions killing them and winter upon them…the only good news is that much like when the UK economy collapsed in the GFC so did Zombieland Villa prices ,so the Russian economic collapse will keep the bloody Russians out of buying the rest of Europe!!!
Ruble or Rubble!! What a difference a letter makes!!!
The rout in global crude oil prices has derailed M&A activity in the sector, with an offer by Oil Search for assets in Papua New Guinea taken off the table while Apache’s multibillion-dollar sale of its Wheatstone LNG project in Western Australia is expected to be deferred.
From the WSJ yesterday to explain the drop in Middle class spending on Black Friday “we are buying less stuff,” because the basic costs of necessities such as healthcare, food eaten at home, rent, education, and iphones have surged. Overall spending for the group rose by about 2.3% over the six-year period from 2007, even as inflation totaled about 12%.
Aged care provider Japara Healthcare has said it neglected to pay employees about $5 million in overtime due to errors in the manual processing of pay.
Vocation is set to unveil yet another profit downgrade…think this one is in a serious death spiral..and a new Government in Victoria to boot..avoid like a Rolf Harris retrospective art show!
Woolworths has acquired a large alcoholic drinks distributor in China called Summergate, which also runs a wine subsidiary called Pudao Wines. Might be shrewd move…
The long awaited bid for TEN should be out soon…seriously…might even be below the current share price…tempted…well doesn’t really matter why a shareholders think except for Bruce, Gina, Lachlan and James!….another OneTel..
US debt hits $18 Trillion dollars!!!!Well done Obama…back to the golf course … it had taken the country 74,984 days (more than 205 years) to accumulate its first trillion in debt.But the last trillion was accumulated in 403 days .. the US government has been spending roughly 90% of its ENTIRE tax revenue just to pay for mandatory entitlement programs and interest on the debt…..won’t finish well!!
For those that follow the tea leaves ..apparently there is another Hindenberg Omen brewing on the US market…
Above my pay grade…but there you go anyway…
More interesting for me though was this report from a Fed Vice Chief..does that mean he is in charge of gluttony ,greed etc …not sure but these are his words….. he signaled officials are closer to dropping a vow to keep interest rates low for a “considerable time” and will stress economic data to guide the first increase since 2006.
It’s good to be an ex-king!! Former European Council President Herman van Rompuy will receive around $900,000 over the next 3 years as a “transition allowance” for doing absolutely nothing in retirement. And at a reduced tax rate…no wonder they want the EU to continue!!!
And where is all the Sydney traffic ..has everyone left for Xmas already!!!!Eerily quiet on the roads this morning..
Madonna poses topless…go Madge…
Vale Bobby Keys..one of the greats …
Have a great day…