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Morning sports fans,
Well thought the positive vibe was struggling a little but was taken by surprise on the viciousness of the market yesterday..100 down..nasty ..maybe the Sell in May has come early!!Reasons to be cheerful part three…no seems not…a killer combo of higher dollar ,banks getting whacked on APRA concerns,Goldmans calling no more AAA and a profit downgrade or two plus budget looming and UK election and Greece and Fed minutes…funnily enough the economic news out of the US has been pretty trailer trashy and would normally be seen a s a sign that the Fed is going to stay its wavering hand on the interest rate tiller..but apparently not this time…earnings have been lacklustre too although techs better..However Nil Desperandum my pedigree chums …the market is still supported by the Central Banks around the world…UK,ECB, Japan, now China and US may be in for longer too….adding to the nastiness was the feeling that the short squeeze in Rust was over and the price has crashed 4% ! You know what nothing goes up or down in a straight line forever…top had to be taken off.
So what to do in the carnage of yesterday..well I was kinda thinking that it had run its course but maybe not today early at least..we have fallen 140 points in a couple of days so all the closing on 6000 gloss has been knocked off…let’s face it the market is range trading..probably 5750 to 6000…until it breaks either of these on the up or the down, the playbook remains the same…buy the horror dips and then sell the stocks when we get close to 6000…
Idea of the Day
After suggesting a week or so ago that some puts may be prudent some listened some didn’t…those that did are breathing slightly better about the market falls and this insurance gives them some comfiort to be able to pick up some bargains in the turmoil…I did suggest that it was over done yesterday and the puts should be let go and the market may bounce on the Fed news…looks like I was wrong on that…still day aint over yet.But apologies to those that I sold out of their positions may be a little early…
So the banks? The big question…well my bank index is 200…topped out at 210 so it’s off a bit but numbers next week and lovely dividends to come..in fact in the next 13 months NAB will pay 3 bucks in dividends!!Fully franked…now I don’t think you can find a yield around 8% fully franked over the next 13 months in anything else can you…and we are in the middle of the biggest property boom the world has ever seen …and where do these guys make their money…lending money on houses…So maybe not today …or tomorrow but the banks should be starting to appear on your radar as an accumulate…if for no other reason than the income!!!
Things to make me go mmmmm!!!
Chelsea 3-Leicester 1 yay!!!Nearly there boys…hope to snag a ticket to see the boys play in Sydney ..anyone know how apart from the melee on ticketek?
Sydney property prices are just stupid…average home is now priced at $914,000…you have got to be joking…how are our young people ever going to be able to afford a home…just stupid…we need better infrastructure and more housing stock…it cannot be healthy to have to load up with huge amounts of debt to buy a home…coming on top of that Uni debt too…
Home prices jumped 3.6 per cent in the March quarter to a median of $914,056…seems the SMH has just become a property spruiking rag..no news anymore just commentary ..much cheaper than journalists!!
When did the price of Iron Ore dictate Interest rate policy…I know I am just a dumb broker but the revenue that Joe gets from Iron Ore is based on tax paid and royalties..plus of course jobs..(Not that they are hiring much anymore as FMG let go 700!!)…of course it would be marvellous if they paid the right amount of tax rather than shift it to Singapore but there you go…while production is at record highs surely the royalties are too…doesn’t the State Government get royalties based on what is taken out of the ground not what they get paid for it…would seem sensible to structure the fees that way…
Anyway surely an exchange rate above 80cents gives the RBA all the excuses it needs to cut rates?
Insurance Australia Group has lowered its full-year insurance margin guidance as the recent bout of severe storms and hail dealt blows to the company’s balance sheet Itsaid it now expects to book an insurance or profit margin of 10.5 per cent to 12.5 per cent, down from 13.5 to 15.5 per cent.
US economy on a tear…up 0.2%…wow…big stuff… Yellen and her colleagues blamed the winter slump partly on “transitory factors” and reiterated their belief that growth will pick up to a “moderate pace.” Bloody better!!!
Earnings reports included MasterCard, the number 2 debit and credit card provider, who reported a 17% rise in quarterly profits, and Time Warner with their report of quarterly profit at $1.19 per share and 10 cents above forecasts.
Looks like “Teflon” Hilary is good at feathering her own nest!!! More scandals than a ARL team!!
Now it seems that I maybe the only one thinking of this in the financial rags but the UK election has the ability to throw a real spanner in the works of Zombieland again..looks line ball and the real issue is what deals need to be done to secure power..SNP or UKIP…Cameron or Milliband…Labour could really upset things a lot!@!!
Finally some of the the talking heads in fixed interest are questioning why buy German bonds with a yield of bugger all to a jam tart…some of these negative rates are just plain stupid..all it does is encourage gearing and leverage and we know where that will end up..see the 2008/2009 play book..Jared?…Germa stock market took a direct hit last night…hardly a surprise…
Bright spot …oil ….Crude Oil futures settled at $58.97, reversing early losses and up $1.93 on the day and now up about 40% from the $42.03 low on March18.
And finally….some military quotes to keep you smiling!!!
‘If the enemy is in range, so are you.’
‘It is generally inadvisable to eject directly over the area you just bombed.’
– US. Air Force Manual –
‘Whoever said the pen is mightier than the sword obviously never encountered automatic weapons.’
– General Douglas MacArthur –
‘Five second fuses last about three seconds.’
– Infantry Journal –
‘Any ship can be a minesweeper. Once.’
– Naval Ops Manual –
‘If you see a bomb technician running, try to keep up with him.’
– Infantry Journal-
‘Yea, Though I Fly Through the Valley of the Shadow of Death, I Shall Fear No Evil. For I am at 50,000 Feet and Climbing.’
– Sign over SR71 Wing Ops-
‘The only time you have too much fuel is when you’re on fire.’
‘When one engine fails on a twin-engine airplane, you always have enough power left to get you to the scene of the crash.’
-Multi-Engine Training Manual-
‘Without ammunition, the Air Force is just an expensive flying club.’
‘Never trade luck for skill.’
‘Airspeed, Altitude and Brains.
Two are always needed to successfully complete the flight.’
-Basic Flight Training Manual-
‘Flying the airplane is more important than radioing your plight to a person
on the ground incapable of understanding or doing anything about it.’
– Emergency Checklist-
‘The Piper Cub is the safest airplane in the world; it can just barely kill you.’
– Attributed to Max Stanley (Northrop test pilot) –
‘You know that your landing gear is up and locked when it takes full power to taxi to the terminal.’
– Lead-in Fighter Training Manual –
As the test pilot climbs out of the experimental aircraft, having torn off the wings and tail in the crash landing, the crash truck arrives.
The rescuer sees the bloodied pilot and asks, ‘What happened?’
Have a great Thursday