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Market Morning

The good data continues to roll out of the US, with jobless benefits claims down, manufacturing expanding and most importantly, the new iPad coming out today sending AAPL to over $600: By the way, that’s a semi-log scale chart, not linear! Lets check out what happened in detail before the open of the local markets –

Latest posts

19

RBA: Bank funding costs have risen

By Leith van Onselen Last month, I wrote a series of articles (here, here and here) arguing that the Australian banks’ funding costs had risen since mid-2011 and that the banks were justified in raising lending rates independent of any moves by the Reserve Bank of Australia (RBA). Yesterday, the RBA released its Bulletin for

19

S&P500 and ASX200 are the same market

Cross post from Avid Chartist: Both the US S&P 500 and Australian ASX 200 bottomed in early October. Since then the S&P 500 has rallied over 25% and recently beaten its 2011 high, while the ASX 200 has barely risen 10%, and is almost 20% below its 2011 high. These figures of course assume that

35

More signs of a bumpy Chinese landing

So, the many meetings of the leaders of China have came to an end and the Shanghai stock market celebrated by falling 2.6% yesterday. There are a few things wroth noting from the past two days. As mentioned early on, Wen Jiabao has made it clear that GDP growth target for the year would be 7.5% instead

24

March 16th Links: Oil slips, Apple bubbles

Markets: Up: Stocks , ore, gold Down: USD, energies, euro Flat: Aussie,  Treasuries, CRB Sovereign Yields: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2 Year 5

10

Trading Day – 15th March

So here we are gain, with the local market, the S&P/ASX200 index rejecting the 4300 point level again, slipping down 0.2% to 4277 points: Note the lower lows in the last couple of weeks. This is not a bullish sign, but only a short term indicator, so highly unreliable. In my weekly “Trading Week” (posted

27

Consumer confidence up: Roy Morgan

Roy Morgan have released their latest consumer confidence figures, which has jumped somewhat, although the survey says “good time to buy” major household items, which is not good news for Harvey Norman and other big box retailers. The reduced house sales volumes are having a effect even broader than slumping Victorian budget deficits. Here’s the

8

Personal finance rebounds in January

By Leith van Onselen The Australian Bureau of Statistics (ABS) this morning released the Lending Finance data for January, which registered a nice bounce in the value of personal and lease financing commitments, although commercial financing commitments registered a small fall: In seasonally adjusted terms, the value of personal finance commitments rose 4.3% in January,

18

The PIIGS Strike Back

So, as I suspected would happen, the push-back against the suicide pact continues. This week Spain managed to convince the EU that it should be allowed to loosen its deficit targets for this year a little in return for a greater push in 2013. Eurozone finance ministers have given unemployment-ridden Spain more wiggle room in cutting

2

Flat car sales beat expectations

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released new motor vehicle sales data for the month of February: On a seasonally adjusted basis, new motor vehicle sales were flat in the month to be 1.7% higher over the year. The result beat analysts’ expectations, who had tipped that new car

0

China links

Courtesy of Sinocism: In China, once-thriving Apple scalpers are struggling – latimes.com – Smugglers and unofficial resellers of iPhones prospered when supplies were tight, but now, with the smartphone in abundance, they find fewer takers and lower profits. The Useless Tree: Confucius is Politically Bolder than Wen Jiabao – t's too bad Wen doesn't push

33

Capital rules drive bank profitability

By Leith van Onselen From a reader comes the below extract from Citi arguing that the profitability of mortgages on the banks’ books has risen strongly since the introduction of Basel II in 2006. For background, Basel II is the capital adequacy regime pertaining to Australia’s banks, building societies and credit unions (collectively known as

7

Australian dollar nears important support

The Aussie is doing as I’d expected at present and continuing to struggle, hitting what I think is a 2 month low overnight at 1.0427 against the USD. The wash off the oversold hourly move a couple of days ago pulled up exactly where it should have just below 1.0560/75 and last night saw it under

19

Mineral exploration explodes in WA

By Leith van Onselen Yesterday, the Australian Bureau of Statistics (ABS) released Mineral & Petroleum Exploration data for the December half/quarter and it’s boom boom time in the resources sector! Nationally, expenditure on minerals exploration hit an all-time high of $2,015 million in the December half, with petroleum exploration expenditure also rising to $1,677 million;

5

Market Morning

As I reported earlier, the Chinese Premier Wen Jiabio “surprised” the Asian markets with his comments about clamping down on China’s property bubble. The sell off didn’t continue in magnitude but Euro/US markets were subdued. Lets check out what happened in detail before the open of the local markets – remember to read Trading Week to always

32

Wen says whoa

If you caught my Trading Day piece last night, I explained that after the close of the local market, where the unicorns were prancing in verdant fields, the Chinese share market – the Shanghai Composite (SSEC) plummeted nearly 3%, closing down 2.6% (in comparison with the ASX200 which closed up over 1%). Here’s the intraday

0

Loan demand remains weak in China

As we have repeatedly noted,  loan demand remains weak in China as the economy slows.  As I have discussed before, cutting RRR is not easing (and PBOC’s governor has made the same point already), it should not be a surprise that new loans have disappointed the market for 2 straight months, and it seems that

42

The financial culture exposed

You may heard about, from the twittersphere/blogosophere or many hours later, the MSM, the fiery resignation of a top Goldman Sachs executive last night in the US. His take on the change in the corporate culture at what has been infamously called “the vampire squid” is eye-opening to the lay, non financial reader, but no

4

Nomura upgrades China GDP growth

Last year, Nomura said there is 1-in-3 chance for China to experience a hard landing by the end of 2014. For now, however, they are revising their 2012 GDP forecast upward from 7.9% yoy (real) to 8.2% yoy (real): We are revising our 2012 China GDP growth forecast up to 8.2% from 7.9% for three

12

March 15th Links: Golden Ides

Markets: Flops – again: gold and Aussie Up: USD,  VIX, ore Down: Treasuries, energies,  CRB, euro Flat:  Stocks Sovereign Yields: Greece 2 Year 5 Year 10 Year Portugal 2 Year 5 Year 10 Year Ireland 2 Year 5 Year 10 Year Spain 2 Year 5 Year 10 Year Italy 2 Year 5 Year 10 Year Belgium 2 Year 5 Year 10 Year France 2

24

Trading Day – 14th March

So here we are gain, with the local market, the S&P/ASX200 index rising nearly 1% to nearly 4300 points, so we’re nearly there: In my weekly “Trading Week” (posted on Saturday mornings after US/Euro session closed) analysis I reiterated that the local bourse needs to snap above this resistance level before moving into a new

21

The questions the stock pickers rarely ask

There’s always an awkward moment whenever I’m at a dinner party, or when catching up with friends or relatives, or even, most recently, at my local butcher. The moment comes after I explain what I “do” for a living – investing strategist causes confusion, and trader is too “Vampire Squidish“. After a quick summary I’m

37

QLD leads fall in dwelling commencements

By Leith van Onselen The Australian Bureau of Statistics (ABS) has just released dwelling unit commencements data for the December quarter, and it’s another poor result. In seasonal adjusted terms, total dwelling unit commencements fell by -6.9% in the December 2011 quarter, which follows a -6.0% fall in the September quarter. In the 12 months

0

China links

J.P. Morgan Chase’s Ugly Family Secrets Revealed | Matt Taibbi | Rolling Stone – In a story that should be getting lots of attention, American Banker has released an excellent and disturbing exposé of J.P. Morgan Chase's credit card services division, relying on multiple current and former Chase employees. One of them, Linda Almonte, is

13

Consumer sentiment dives

The Westpac/Melbourne Institute Index of Consumer Sentiment was down by 5% in March. This is from a high of 101.1 in February and at a similar level to the October survey before the two rate cuts by the RBA. So it seems, in the short term at least, that lowering rates hasn’t done much to

9

Professor Sinn strays off target

On my post a few days ago a couple of readers made comment about the current attention that is being given to the European TARGET2 system. I thought I would spend a little bit of time discussing the topic as I was given a timely reminder by Bloomberg last night: (emphasis added) German angst is growing as

3

Market Morning

Apologies for a truncated Trading Day post yesterday, but the day got ahead of me and cloning technology has not yet been perfected. It was a big night – that much is clear with a quick glance at the quote screens. But why? As I reported earlier, the FOMC decided to keep US interest rates

21

The Fed sits again

The US Federal Reserve’s Open Market Committee or FOMC for short, sat last night, in the equivalent of the RBA’s monthly meeting to decide the cash rate. The committee agreed that inflation was only a temporary issue due to high oil prices, and made no noises on QE3, deciding to continue its “Operation Twist” and

11

Palmer’s Guardian

Yes, I’m on holiday this week but wouldn’t you know it that’s always the time your industry enters meltdown! The AFR today has an incredible story about the latest move in the “miners versus the government” debate. Clive Palmer is proposing to establish a Guardian-like trust for Australian media assets. For those that don’t know,