Just because! Seeing Kirsten Stewart in a whole new light.

ASX 200 closes up 49 points to 5478 after the GDP print gave bulls something to ponder.  Banks and big miners again in control as industrials find bargain hunters. Asian markets slightly better with japan up 0.5% and China unchanged although HK up 0.36%. AUD slips 0.4% on GDP to 74.30c and US futures markets down 4.

STOCKS AND SECTORS

  • Resources once again the focus as trade in China showed good rises on iron ore again. BHP +0.98%, RIO +2.86% and Fortescue Metals (FMG) +4.28%. Iluka Resources (ILU) +4.38% had a good day too after a SRL merger update.
  • Energy shares suffered a little as analysts moved to downgrade Origin Energy (ORG) -2.58% on its planned IPO next year of the conventional assets. Brokers were disappointed it was not a trade sale.
  • Banks the driving force again too with the Big Bank Basket hitting $168.60 after a 250c rise. Insurers joined in with IAG Australian (IAG) +1.27% and Suncorp (SUN) +1.49% doing well. QBE Insurance (QBE) unchanged were in profit talking mode after the huge run it has been on.
  • REITS had a strong day with Vicinity Centres (VCX) +1.74% and Scentre Group (SCG) +1.18%.
  • Industrials had a good strong day especially in stocks that have been aggressively sold down in recent months. Stocks like REA Group (REA) +%, Aconex (ACX) +%, Bapcor (BAP) +% and Wisetech Global (WTC) +%. Maybe if we get a rate cut bind proxies will be back in fashion. Sydney Airport (SYD) +1.27% and Transurban (TCL) +0.50% showing signs of life.
  • Speculative stock of the day: HearMeOut (HMO) +39.47% after the IPO at 20c started trading yesterday and gave a presentation today. The company is an Israeli social media platform using a unique audio feature.

CORPORATE NEWS

  • Wesfarmers (WES) +0.47%+% have lost the main architect of what is now an institution today with news that the CEO of Bunnings was leaving. John Gillam has been with the company for 20 years 12 of which was head of Bunnings and has turned the division into a earnings machine  with a $1.2bn number these days. He will be missed. An army of middle aged blokes in red aprons will be shedding at tear tonight for Gillam.
  • TPG (TPM) +6.96% a positive reaction today in an oversold stock as the company moved to reassure the market that it was on the right track and reaffirmed guidance. David Teoh quelled investor concerns on shrinking margins and issues with the NBN.

ECONOMIC NEWS

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The highlights

  • Gross domestic product fell 0.5% from previous quarter, when it gained a revised 0.6%.
  • Decline was driven by slump in construction and government spending.
  • Result was worst since depths of global financial crisis at the end of 2008 and well below economists’ estimates of a 0.1% drop.
  • The economy grew 1.8% from a year earlier, compared with a forecast 2.2% gain.

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Economists are calling today’s third-quarter GDP contraction as a one-off, calling it “a flesh wound”, “a rough patch”, a “pothole” or “blip”.

  • GDP fell for the first quarter in 25 years as economists scrambled to try to defend even their bearish forecasts.
  • Not sure gloating is a good look on any politician, but Chris Bowen take a bow.
  • Rate cut talk back on the agenda but RBA will be keen to see if this is just a blip or are we in a recession. Some weather factors at play according to the brains trust.
  • Scott Morrison has told the markets that it is a wake-up call. More like ‘Wake in Fright’. AAA rating must be gone now.

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  • The number of first home buyers in the housing market has fallen over the September quarter reducing the number of first home buyers to just over 1 out of 10
  • Construction activity also falling.

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BOND CORNER

  • Local bonds had an interesting day (oxymoron?)
  • 2-year bonds lost 4 bps to yield 1.73%
  • 5-year bonds down 5bps to yield 2.27 and 10-year bonds yielding 3.24%

ASIAN NEWS

Iron ore has jumped more than 5 % to its strongest in nearly three years, steel was also up 5 per cent, while coking coal and coke also rose sharply.

The most-traded rebar on the Shanghai Futures Exchange rose as far as 3,428 yuan ($US498) a tonne before trimming gains to stand at 3377 yuan by midday, up 5%.

EUROPE AND THE US

  • More trouble brewing for UK PM Theresa May with the Brexit vote
  • Here is some rare good news. CFD trading companies took a huge hit as the London City watchdog has clamped down on CFD trading. The FCA consultative paper will materially impact CFD business.
  • One economist in Italy is drawing up plans to ditch the Euro and bring back the Medici Florin. Love Italy.

And finally…………..

A biologist, a chemist and a economist are out hunting. The biologist shoots at a deer and misses 5th to the left. The chemist takes a shot and misses 5th to the right. The economist yells “We got ’em!”

 

A stranger was seated next to Little Johnny on the plane when the stranger turned to the Little Johnny and said, “Let’s talk. I’ve heard that flights will go quicker if you strike up a conversation with your fellow passenger.”

Little Johnny, who had just opened his book, closed it slowly, and said to the stranger, “What would you like to discuss?”

“Oh, I don’t know,” said the stranger.

“How about nuclear power?” “OK,” said Little Johnny. “That could be an interesting topic.But let me ask you a question first.” “A horse, a cow, and a deer all eat grass. The same stuff. Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?”

“Jeez,” said the stranger. “I have no idea.”

“Well, then,” said Little Johnny, “How is it that you feel qualified to discuss nuclear power when you don’t know shit?”

Clarence

XXXX

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