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Morning sports fans,
Another reactive night overseas as nerves jangle going into the Fed two day meeting .Will they drop patient and replace it with some other word or will they confound us all..the tension is mounting and I for one can hardly contain my excitement…there is a new school of thought that is suggesting that because of the fuel price falls and the mixed economic reports the Fed is going to push back its “raise the rates- sink the market move!”We shall see….our market took off like a scolded cat yesterday with the banks leading the charge..what’s new…have been writing this stuff for three years now and the theme is the same…broken record…anyway TLS joined the fun..wrote about them yesterday…resources and oil remain the black sheep of the family…you see I seem to have a fundamental issue with commodity stocks..I may be simple but if the world’s second biggest economy is growing at 7% and the US is firing, how come commodities are so on the nose…what is going to change..Zombieland booming…nah…China will continue to grow slower ,Japan is an accident waiting to happen so what is going to change the dynamics in commodities..the answer is not demand ..It is supply…pure and simple..when the companies producing record quantities of stuff no one wants, stop doing it, then prices will rise ..but there is a whole world of pain to come yet..BHP,RIO still digging up red dirt faster than you can say Rachel Taylor can act and Coal companies out there digging away, oil companies pumping away so much that they are running out of storage.(how about the ground?) it’s hard to see a sustained rally in resources…
Idea of the Day-AFJ
Childcare-Have long been a fan of this sector…GEM has been a huge success and although way off its highs it is still worth a look but I have always favoured Affinity as the alternative Baby GEM..now the sector has clouded due to our glorious governments ineptitude and uncertainty in the sector due to the forthcoming budget but Affinity looks really really interesting…at the moment they are having a rights issue to raise 75m buckaroos…underwritten by CBA no less …this money is going to buy 9 new Premium centres and pay back debt…now I look at this one and see GEM in two years…they have the road map and the business plan..all they have to do is execute..and with their child places valued at 22,000 and GEMs at 44,000 there is some upside here…the rights issue is being done at 1.18 so there is a chance whilst the stock is heavy to pick up some cheap stock…this is a slow burn story and I expect it to gather momentum after the May budget and the rights issue has been digested…accumulate….
Things to make me go mmmmmm!!!
Boral share buy back…Orica CEO falls on his plunger…FMG abandons its bond issue…the big news today!
Nasty day yesterday for all the SRX bulls…I mean really nasty…that’s is the issue with market darlings especially those that are a binary bet..I have always been a little dubious about this one..their liver cancer treatment has been shown to be effective at prolonging life..not a cure ,just pushing it out for a few months and they were hoping that it would help in other cancers…seems it isn’t!!That is a real shame…it is a horrible disease and just seeing a good friend go through it and not winning has been harrowing…so any hope on an effective treatment would have been great news..but the market got so far ahead of itself it wasn’t funny..so where to now for SRX…well maybe their paper to the conference in May to the US cancer specialist will help otherwise its back to the 15-19 level for this one…OSL may be a better bet as they are trying to break into this market and now the competition is struggling it is an opportunity.
Good to see the Japanese Finance minister still bullish about the economy as they pump in ever more money…anyone noticed that the Nikkei is 20,000!!!It’s like the 80s again…thinking of getting my flares out again…
Oil continues to slip…get it oil slip…I am wasted on you guys…but the US is just awash with the stuff…how long can this price war go on..
US crude hit a six year low of $42.63 before paring losses to close down 0.2% at $43.79 and Brent crude eased by 1.3% to $53.22 a barrel.
Good to see the boys at BHP pushing the benefits of their Good Hills/ Bad Hills demerger…over $730m in fees…how is that good…if you can’t run a complicated company like BHP you should not have taken the job Andrew..bet his salary package isn’t cut as it’s now a simple company to understand.
Now I am not a fan of corporate criminals but the sentences for the Insider traders does seem a bit over the top…ok so knowing the ABS numbers before they come out is pretty useful but it still takes big kahunas to deal in the FX market on them..that is a very huge and unpredictable market …there are far worse things going on all the time in the ASX…far worse..so seven years seems a tad “Butterfly on the Wheel”…sends a message though…
How long have we been talking about the housing bubble..how long has the RBA and APRA had a chance to do something about it rather than wave a stick in the air and shout stop it…I mean really they have the means and the opportunity to severely curtail the housing price boom but have done nothing at all about it..just words and words are all they have to take the boom away…so yesterday they left the door ajar for more rate cuts..just what we need..
Looks like FMG are back in the hot seat as they abandon plans for their bond issue in the US…looks like the bears are well and truly in charge of that one…
Seems like the Greeks are turning to their Russian mates in an attempt to shore up their finances..not sure if the Ruskies have any money themselves but I guess at least they can print their own..and Bank of England Gov has told the media that there is no way Greece will ever repay its debts!!!
I know that we all are outraged by the IS beheadings but they seem to be taking their cue from our ally in the Mid East Saudi Arabia who have averaged a little over one beheading every 48 hours, putting the latest tally at 45 in 2015. Last year, they were only able to hit 87, but are clearly trying to make up for lost time. And these are our friends!!!!!
Close call in the Israeli elections….
Quote of the day from a US billionaire investor Stan Druckenmiller… “I am fearful that today our obsession with what will happen to markets and the economy in the near term is causing us to misjudge the accumulation of much greater long term risks to our economy.”
And finally…….thanks Roger and the boys!!!
Back on Sky at 12.00 today
Have a great day