Morning sports fans,

 roll

As they say ,nothing much to go on today with a negative lead from the US, plenty of Ex Divs and Zombieland recovering so expect not much to happen…well at least to the upside…the momentum is leaking out of the markets are we need another Sugar hit…maybe more news for ‘Do Nothing’ Draghi on Thursday will help but otherwise we are drifting a little and suspect this is the pullback we need to unwind some of the FOMO or irrational exuberance…should not come back too far as there are plenty of people who missed out so maybe low 5800 before steadying again and powering up with yield stocks…I get the feeling that the big knee jerk reaction to Draghi from around January 22nd is running out of puff..with a UK election, an Aussie budget looming it may well be a ‘Sell in May and Go Away’ type scenario in a month or two…my experience is that Easter tends to be a high point…

Things to make me go mmmmm!!!

 guy

The one question I get constantly asked, whenever I do TV, is what result was the most important from results season…just to be awkward and try to get people to think outside our little box,I say Hewlett Packard…I know it’s not even Aussie but it was  a “Canary in the Coalmine” for what happens to US company earnings now the Dollar is on the rise…from the boys and girls at HP… “they offered a disappointing forecast for the current quarter, warning that currency changes could have “a significant impact” on those upcoming results.”Just sayin’…

So who is buying the markets…well in the US the biggest buyers of the market are companies engaged in sharebuy backs!!!Yup that’s right folks the future looks so bright and the opportunities so great that the best thing to do with the cash is to buy your own shares..at least it is best for management who get rewarded now for Share Price performance…so long term vision..or maybe money is so cheap there is so much sloshing around and they can get plenty more when they need it to expand!!But last year companies bought back $550bn worth of their own stock…that’s half a trillion I think…they averaged $47 bn a month..no wonder the Dow is at an all-time high!!!

China’s top leaders are expected to revise down their 2015 economic growth target to around 7 per cent today when the annual parliamentary meeting begins in Beijing….hence the rate cut last weekend…

Looks like the battle for Rio is set to get underway in April as the six month moratorium is over and Glencore will be free to have a go at them…already the Glencore boys are cutting production in their coal businesses and talking the price back up…they seem to favour higher prices over just pumping and dumping…maybe that will be enough to get the Iron Ore price off the floor…if so FMG around these levels could be interesting…just announced a refinancing too…$2.30 is a place to start buying them for a seat at the big table of Iron Ore shenanigans…

Our GDP number yesterday was little worrying as the so called transition from mining to ???? seems to be elusive…only housing and the superannuation industries seem to be doing well at the moment..so Sydney is ok but not sure anout the rest of the country…

When I was a younger man in this business there was a old brokers rule of 20..that is the PE ratio plus inflation should be around 20..so anything over was suggesting that the market was too hot and obviously anything substantially under was cheap…now that inflation is nearly dead the Pes can push towards the 20 level with impediment but any higher and I would caution new money from entering…our current PE for the market is around 21…but looking out to 2015 calendar year we are on around 17 if everything delivers..big call  but certainly not out of the question…

MQG back today…

And finally…….

 

Irishman’s text to his wife:

“Mary, I’m just having one more pint with the lads.  If I’m not home in 20 minutes, read this message again.”

genius

Have a great Thursday

 

Henry

 

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