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Markets Live: Big banks lead the way

Date

Australian shares have closed at a fresh 19-month high as firming expectations of a February interest rate cut helped banking stocks.

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  • "Australian stocks have been boosted by today's jobless numbers, which show unemployment rose in December."
    So if we can get to say 25% unemployment i should make a fortune; or have i missed something.

    Ed: Guessing it's more an expectations thing. Employment's up, but in line with forecasts. So stocks rise because, well, no news is good news.

    Commenter
    Another Grump
    Location
    Melb
    Date and time
    January 17, 2013, 1:17PM
    • I see the algo's are having a good day. There is no point in 'trading' any more. Just swing by the PC at 4 PM and see if you like the price or not.

      How long since the XJO had a daily 1% drop? Manipulated is an understatement.

      Commenter
      Lester
      Date and time
      January 17, 2013, 1:00PM
      • "Australia is expected to drop out of the world’s 20 biggest economies by 2050?" Uhmmm, Augmented by a rapidly ageing population, followed by sharp decline in property market values; is it time to leave? Perhaps so.

        Commenter
        Dan
        Location
        Sydney
        Date and time
        January 17, 2013, 12:24PM
        • "Bob had come up with the idea of outsourcing his own job — to China. So, while a Chinese consulting firm got on with the job he was paid to do, on less than one-fifth of his salary, he whiled away his working day surfing Reddit, eBay and Facebook"

          http://www.theage.com.au/technology/technology-news/software-developer-bob-outsources-own-job-to-china-and-whiles-away-shifts-on-cat-videos-20130117-2cuib.html#ixzz2IBsfXQ8W

          White collar jobs are now being offshored at a rapid rate. Accounting & IT salaries have already dropped 25% in the last few years. Australia is a high cost, low productivity country with the biggest property bubble the world has ever seen.

          Think you're worth $150K/yr? You're not. Think income will underpin bubble house prices? They won't. The recent census shows that the average household income is $64K.

          Commenter
          Allan
          Location
          Prahran
          Date and time
          January 17, 2013, 12:12PM
          • Does anyone have an opinion as to how bad things will get while the US fumbles about dealing with their debt ceiling.

            Obviously they will end up raising it as they have on the previous 90 odd occasions and the world will then rejoice. Until then though, is it really likely to cause pain in the markets?

            Commenter
            cranberry
            Date and time
            January 17, 2013, 11:48AM
            • The problem with raising the debt ceiling, again and again, is apparent for all to see. The idea that the US is too big to go broke seems to be lodged in the minds of the money managers and most analysts - they are wrong. We here in Australia are of the same ilk and living in the same fantasy world. We have a dishonest government who has to talk the economy up, remember, the only job of a politician is to get elected again, and eventually pass the parcel. Well at some stage you have only one wrapper left and you find that there is not enough money or productivity in the economy to pay the bills. When that happens you are like Mexico, Greece, Spain, etc. relying on international monetary funds to put food on the table i.e. a Welfare Nation. At this point we suddenly find we also have to tell the truth about unemployment, and from there on it’s a long, long recovery. When will it happen ? who knows; the politician and wall street lies are just as brazen, and the US seems to have gone back to sleep now that the so called fiscal cliff has been, temporarily, avoided. I originally predicted that we would have a collapse this Feb. but the way people seem to just be ignoring all the warning signs makes my prediction look wrong. I will make one prediction; when Gillard and Swan get justifiably turfed into the street and the books are opened for all to see there is going to be pain, not for the likes of Murdoch and the Packers and Hancock’s, no they will have done their squirreling well in time, but the salvos will be flat out like lizards drinking.

              Commenter
              Another Grump
              Location
              Melb
              Date and time
              January 17, 2013, 1:04PM
            • Markets rise on "hopes" and "plans" these days. They go up for no other reason.

              Commenter
              4500
              Location
              The New Black
              Date and time
              January 17, 2013, 1:26PM
            • Grump, too much realism please....

              But I do agree, the crunch is coming. If what happened last time the deb ceiling was debated over, the gold price started going nuts (the US got downgraded by S&P). If this happens again (i.e. another downgrade) the ESF and others wont be able to stop it, the bond market will implode and the collapse begins.
              Jim Rickards (author of currency wars) has some interesting comments on his twitter about the German repatriation of their gold too and the gloom coming down the pipe.

              Commenter
              Bye Bye Fiat Money
              Date and time
              January 17, 2013, 1:31PM
            • S&P futs flat but we've put on 1.5% in two days. Took care of all those buy stops above the recent high. Best play now would be a quick run to 4700 cash by XJO expiry to kill the calls.

              The four horsemen (BHP,CBA,FMG,RIO) are taking a breather as we select a daily stock to 'goose' - any news will do.

              Commenter
              lion
              Date and time
              January 17, 2013, 1:42PM
          • Looks like "Gangbusters" started at 11.00 AM but we'll see later Markets Live team. You certainly love these headings.
            Cheers

            Commenter
            Opto
            Location
            Hi
            Date and time
            January 17, 2013, 11:26AM
            • Every single morning the stock market is ramped. If you do not understand the ramifications of this on price discovery and efficient markets, the very underpinnings of the forcefeeding of super money into the market, you should probably not even comment on the market. The index should be seen as a cost level for the inflow of super money. This cost is manipulated upward by daily manipulation. Not one of you could reconcile the current ridonkolous oz market with any concept of efficient markets. But never mind. Please go on.

              Commenter
              I love manipulated markets, as long as they go up, what could possibly go wrong?
              Date and time
              January 17, 2013, 11:19AM
              • Shouldn't be a problem because not all super goes into our market. some into bonds, cash, overseas markets, etc. Besides the increases are not significant enough to distort the market due to it's depth. There may be a clustering around the ASX100 companies though but shouldn't be a statistical significance.
                Of course if you put it in the Fijian stock exchange it would distort it, but the ASX is large enough

                Commenter
                Econorat
                Location
                Sydney
                Date and time
                January 17, 2013, 12:07PM
              • The concept of efficient markets is a hypothesis and far from anything other than idealised wishful thinking except perhaps over the long term...

                Over the long term fundamentals play a far more significant role, though in the short term those who trade agressively and with enough money to move the market will always influence other traders and as a result be a very significant driver of share prices over the short term...

                At the end of the day most investors are cautious sheep... you could keep complaining or try to read the actions of traders to make some money yourself...

                Commenter
                Seriously...
                Date and time
                January 17, 2013, 12:16PM
              • The top 100 companies represent 80% on the market. The big 4 banks make up 26% of the total market capitalisation.

                Depth? Don't think so.

                Where's that trade surplus you said was coming 11 months ago?

                Commenter
                Allan
                Location
                Prahran
                Date and time
                January 17, 2013, 12:46PM
            • " Gains, but not gangbusters " !!!!!

              I'd call a 0.4% gain by 11 am pretty damned solid, especially given there is NO good news around. The same nearly everyday for months now, a steady climb up on the back of nothingness.

              Quite remarkable really.

              Commenter
              4500
              Location
              The New Black
              Date and time
              January 17, 2013, 11:18AM
              • "Iron ore extended its decline, posting its biggest daily drop in 14 months on Wednesday, on uncertainty over steel demand from top consumer China which curbed appetite for the steel ingredient.

                Iron ore with 62 per cent iron content, the industry benchmark, fell $US7.50 a tonne, its biggest daily drop since November 2011, to $US145.40 a tonne, according to data provider Steel Index."

                I've been predicting this for a while now. The spot price spiked on pure speculation and is not supported by the 12 month swap price (which is back below FMG's break even point) or the price of other commodities.

                Closed FMG short for 10% on the expectation that pollyannas will bid it up again because they now think it's cheap.

                http://www.theage.com.au/business/iron-ore-posts-biggest-slide-in-14-months-20130117-2cube.html#ixzz2IBdgy7cO

                Commenter
                Allan
                Location
                Prahran
                Date and time
                January 17, 2013, 11:12AM
                • Given the labour force participation rate is generally considered as not giving a accurate picture of the number of those currently looking for work, is the unemployment rate still a relevant statistic these days?

                  Commenter
                  Seriously...
                  Date and time
                  January 17, 2013, 11:00AM
                  • The way the stats are calculated are dismal.
                    None of them are relevant in their current format. The methods need to be overhauled in a major way, and similarly the data needs to be presented in a much more, lets say "honest" or "non-biased" fashion.

                    Commenter
                    Bye Bye Fiat Money
                    Date and time
                    January 17, 2013, 11:31AM
                  • The stats are not ridiculous. There are deficencies, for sure, but the ABS boys and girls are very well aware of them, they are statisticians, after all.They are useful for the trends they show and constantly meddling with the methodology will make them less useful in this regard. Of course, we could always adopt China's almost instant stat processes that is never prone to sneaky local and regional authorities....never, ever,,I mean its racist to say such a thing, don't you think?.

                    Commenter
                    Catch 22
                    Date and time
                    January 17, 2013, 11:58AM
                  • "The increased prominence of casuals across diverse industries may help to explain the very high rates of underemployment in the current labour market. As of February 2012, over 900,000 Australian workers had insufficient work (531,500 women and 384,800 men) comprising around 8% of the workforce (in addition to an unemployment rate of around 5%)."

                    http://theconversation.edu.au/labour-in-vain-casualisation-presents-a-precarious-future-for-workers-8181

                    Casual worker now make up more than 20% of the workforce. When you add in sham contract workers it is more like 30%. Casual workers can be sacked without notice meaning that any downturn in the economy will lead to a rapid increase in unemployment.

                    Commenter
                    Allan
                    Location
                    Prahran
                    Date and time
                    January 17, 2013, 12:05PM
                • OVERALL POINTS
                  NICK / Times Played / Accum Points / Points for place / PLACE POINTS (Combined) / OVERALL PLACE

                  Seriously... / 5 / 33 / 11 / 21 / 1
                  Another Grump / 4 / 21 / 10 / 19 / 2
                  Oragelo / 2 / 11 / 6 / 17 / 3
                  Catch 22 / 5 / 20 / 9 / 16 / 4
                  Snidery Mark / 5 / 20 / 8 / 14 / 5
                  Oracle / 1 / 8 / 4 / 12 / 6
                  The New Black / 5 / 11 / 6 / 10 / 7
                  Liberator / 4 / 16 / 7 / 10 / 7
                  Dan / 2 / 7 / 3 / 8 / 9
                  Jonaze / 1 / 4 / 2 / 4 / 10
                  Space Hippy / 1 / 3 / 1 / 2 / 11
                  Competitors = 11

                  Commenter
                  Snidery Mark
                  Date and time
                  January 17, 2013, 10:59AM
                  • RUNNING BALANCE / Times Played / Accum Amt Off / Average Amt Off / Points for place

                    Oragelo / 2 / 37.795 / 18.898 /11
                    Seriously... / 6 / 132.641 / 22.107 / 10
                    Another Grump / 6 / 142.625 / 23.771 / 9
                    Oracle / 1 / 26.848 / 26.848 / 8
                    Catch 22 / 6 / 192.584 / 32.097 / 7
                    Snidery Mark / 6 / 266.621 / 44.437 / 6
                    Dan / 2 / 152.341 / 76.171 / 5
                    The New Black / 6 / 464.473 / 77.412 / 4
                    Liberator / 4 / 313.543 / 78.386 / 3
                    Jonaze / 1 / 84.152 / 84.152 / 2
                    Space Hippy / 1 / 85.152 / 85.152 / 1
                    Competitors = 11

                    Commenter
                    Snidery Mark
                    Date and time
                    January 17, 2013, 10:54AM
                    • who was the analyst who a few weeks ago warned us that Iluka shares would drop to $6.50. Since then Iluka shares have jumped to now $9.86. Could this analyst please explain.

                      Commenter
                      tbsm
                      Date and time
                      January 17, 2013, 10:51AM
                      • Who's dumb enough to listen to analysts?

                        It's like saying you listen to Goldman, they have been wrong more times than I could count over the last few years.

                        Remember the cat won the stock tipping game (an article from a few days ago).

                        Commenter
                        Bye Bye Fiat Money
                        Date and time
                        January 17, 2013, 11:29AM
                    • WEEK 6 21/12/2012
                      Nick / Prediction / Amt off / Rank / Accum Points Off / Accum Points
                      Catch 22 / 4630 / 6.422 / 1 / 192.584 / 6 / 30
                      Snidery Mark / 4650 / 26.422 / 2 / 266.621 / 5 / 20
                      Seriously... / 4595 / 28.578 / 3 / 132.641 / 4 / 33
                      Liberator / 4588 / 35.578 / 4 / 349.121 / 3 /
                      16
                      Another Grump / 4585 / 38.578 / 5 / 142.625 / 2 / 21
                      The New Black / 4500 / 123.578 / 6 / 464.473 /1 / 11

                      Competitors = 6
                      AT C.O.B. on 21/12/2012 4623.578 NOTES to Week 6:
                      Because I could not locate any comments from Liberator and New Balck, I used their predictions from the previous week.
                      2 tables to follow.

                      Commenter
                      Snidery Mark
                      Date and time
                      January 17, 2013, 10:48AM
                      • "All cutting rates will do is lead to a misallocation of capital within the economy and won't actually change the fundamental story." - Warwick McKibbin

                        Holy geebus, an intelligent comment regarding never-ending rate cuts and credit expansion! The pumpers of lower interest rates are the same people that stand to benefit - the bankers and real-estate shills.
                        If we want to get out of this debt mess we could raise rates to say 3.5% - 4.5% and speed up the recession a bit.

                        Commenter
                        Bye Bye Fiat Money
                        Date and time
                        January 17, 2013, 10:10AM
                        • The only benefits of lower interest rates go to the banks' (capital) funding. It surely doesn't affect my spending, if anything encourages reducing one's spending as (historical) lower rates implies...We're in trouble!

                          Commenter
                          Dan
                          Location
                          Sydney
                          Date and time
                          January 17, 2013, 10:31AM
                        • Why would you want to speed up a recession? What good does that do? It may clean out some of the deadwood in the system but it would be largely making us run at less optimal speed and cause large losses in efficiency in the economy? We are running in or close to the sweet spot now. The balancing act is to remain where we are.

                          Commenter
                          Econorat
                          Location
                          Sydney
                          Date and time
                          January 17, 2013, 12:10PM
                        • It cleans out the misallocations of capital at a faster rate, freeing up capital to be used in more productive areas of the economy.
                          Furthermore it discourages people from levering up as their interest repayments will increase.
                          Less buyers for overpriced property = falling prices, but also, more property on the markets = lower prices.
                          This leads to more money being freed up to support business. It's business that support economies, not debt-driven credit bubbles.
                          Raise rates, burst the bubble.
                          The longer we leave rates at low levels, the worse the conditions for business will get. Sure more people might have their houses, but there will be less businesses left, and hence less jobs.

                          Commenter
                          Bye Bye Fiat Money
                          Date and time
                          January 17, 2013, 12:49PM
                      • Interesting that the iron ore price came back a little overnight...

                        Will traders quickly forget that it's rallied a long way from 90 to 145 in recent months or will they fixate on the small drop over the last few days?

                        btw I stand by my last call for the iron ore price (made in dec) consolidating in a trading range of 135-145 before rallying higher over the next few months.

                        Should be an interesting session which may provide investors in FMG a decent entry price either later in the day or sometime over the next few trading days.

                        Commenter
                        Seriously...
                        Date and time
                        January 17, 2013, 10:07AM

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