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Markets Live: Investor gloom prevails

Date

Patrick Commins, Jens Meyer

Shares failed to bounce of early losses despite the release of strong GDP figures, with gold miners and listed property the standouts.

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That’s it for Markets Live today.

You can read a wrap-up of the action on the markets here.

Thanks for reading and your comments.

See you all again tomorrow morning from 9.

Proof that Australia’s economy performed better than expected in the first quarter of 2014 was not enough to buoy the sharemarket as stocks sold off, with global investors cautious ahead of an expected announcement of more stimulus from the European Central Bank on Thursday.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both lost 0.6 per cent, on Wednesday to 5444.8 and 5426.8 respectively after local shares took a weak lead from Wall Street.

Nomura interest rates strategist Martin Whetton expects most of the liquidity from any ECB stimulus announced at the June meeting to flow into eurozone bonds. “But higher yielding markets, like Australia, could also benefit if investors see an appreciation in the local currency against the euro,” Mr Whetton said.

The ASX continued to grind lower despite Australian Bureau of Statistics data that showed gross domestic product grew 1.1 per cent in the March quarter, up 3.5 per cent from a year earlier. The dollar pushed close to US93¢ following the release of the GDP data.

“We still see the Reserve Bank’s easing phase as done and the next move as up, perhaps as soon as around year-end,” HSBC chief economist Paul Bloxham said.

Discretionary consumer goods and services was the worst-performing sector, down 1.3 per cent as a monthly Australian Industry Group survey indicated retail spending declined in the wake of May’s federal budget.

Read more.

Leading investment banks have sounded out interest among media companies for Lachlan Murdoch's radio business Nova Entertainment.

Bankers have approached at least one media company in recent months in the hope of finding a buyer for the operator of the Nova and Smooth FM networks.

It is thought that banks have not been mandated at this stage and there is no guarantee of a sale. However one media executive told Fairfax Media: "They were certainly under the impression Lachlan is a seller."

It is believed Lachlan Murdoch would be after at least $400 million.

Read more

And here are the best and worst performing stocks today.

 

 

Best and worst performing stocks in the ASX 200 today.

Best and worst performing stocks in the ASX 200 today.

Oil Search has upped its production guidance for the 2014 year to 17 - 20 million barrels of oil equivalent from the previous estimate pf 14.5 - 17.5 mmboe.

The boost comes thanks to production from the PNG LNG project, operated by ExxonMobil PNG Ltd, starting ahead of schedule.

Due to economies of scale, the company also said in its announcement to the ASX that operating cash costs per barrel would fall to $US18-22/boe from $US21-26/boe.

Macquarie Group has revealed Helen Nugent and Peter Kirby will retire from the investment bank's board at the annual meeting scheduled for July 24. They will not seek re-election having served as independent directors since 2007.

It takes more than a blockbuster three months of economic growth to impress investors who gave shares a bit of a bump after the release of the better than expected GDP figures sold down shares to close to the day's lows.

The ASX 200 dropped 35 points, or 0.6 per cent, to 5444.8, and the All Ords 34 points, again by 0.6 per cent, to 5426.8.

Judging by a 1.9 per cent jump in gold miners - by far the best performing sector - shareholders' minds may have been turning to Thursday night's ECB meeting, where the Euro may start along the path to joining the QE party.

Listed property was the only other corner of the market to record gains, and not just because of string gains in Australand (+5.6 per cent) and its erstwhile bidder, Stockland (+1.8 per cent).

Woolies was one of the worst performing bluechips, down 1.4 per cent, while AMP dropped 2 per cent.

Fellow grocer, Metcash, advanced 1.8 per cent.

The big banks all fell around 1 per cent, aside from Westpac which retreated a more modest 0.3 per cent.

BHP fell 0.7 per cent and Rio 0.4 per cent.

Has Joe Hockey's federal budget hurt new car sales? After a record 2013, new car sales in Australia continued on a downward trend last month for the worst May result since 2011.

Figures released by the Federal Chamber of Automotive Industries on Wednesday revealed 94,562 vehicles were sold during May, a 2.3 per cent fall compared with same period last year. The result culminates in the fifth consecutive monthly decline for 2014.

The overall market is now down 3 per cent compared to 2013, with analysts citing the fallout from last month’s federal budget as a major trigger.

“It unquestionably looks like a weak result,” Australian Automobile Association chief executive, Andrew McKellar, said.

Read more

 

The 30 per cent plunge in iron ore prices since the start of the year is an overreaction, ANZ says but warns that picking the bottom of the market is ‘‘like catching a falling knife as speculators take over’’.

‘‘Current levels look oversold with a 10-15 per cent price rebound expected in coming months,’’ ANZ says adding that a relief rally is likely to fall short of the bank’s near-term price forecast of $US120 per tonne.

The bank notes that the huge increase in Australian iron ore exports that are coming on quicker than expected could trigger the permanent closure of higher-cost Chinese producers.

"As a result, we think the key industry floor price, driven by China, is now closer to USD100-105/tonne rather than USD120-125/tonne in 2013," the bank's economists say.

That’s prompted ANZ to revise down its price forecasts over the next three years by 10-13 per cent:

  • We now forecast iron ore prices to average USD110/tonne in 2014 from a previous forecast of USD120/tonne. We think current spot levels around USD90/tonne will be the low point of the year despite ongoing high supply - with a near-term relief rally and stronger fourth quarter restocking propping up end of the year prices.
  • Larger downgrades to 2015 (to $US106, from $US118) and 2016 (to $US98, from $US113) forecasts reflects the lower global industry floor price of USD100/tonne and the expectation that Chinese iron ore supply costs could be further reduced under a more efficient consolidated industry.

Incorporating the downgrade, ANZ now expects Australia’s terms of trade to fall around 8 per cent through 2014.

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A good year for the economy, but it's downhill from here, writes BusinessDay columnist Michael Pascoe:

Well that was nice – a year of above-trend economic growth with rising labour productivity and profits, low inflation and interest rates, capped by falling unemployment and real labour costs.

Just don’t expect the more vocal members of the business lobby and conservative politics to acknowledge it.

And too bad it’s downhill from here.

Today’s better-than-expected March quarter national accounts economic scorecard effectively rules off the pre-Hockey economy.

According to what last month’s budget promised and the best guesses of the Treasury and Reserve Bank boffins, the year to March 31 was as good as it gets until 2016.

And we all know how hard it is to forecast a couple of years out.

The report card tells us some good things about how the economy was travelling, but it only hints at the factors that matter in divining the year ahead.

It’s great that our investment in the resources industry is paying off so handsomely – the mining industry accounted for 80 per cent of the lift in GDP - but the fall in our terms of trade is likely to worsen this quarter.

(There is a tendency in some quarters to say “if you don’t count exports, the economy’s bad” – but exports are a key part of what we do right now. It’s like telling a farmer his business is in a bad way if you ignore what he grows and sells.)

The most immediately important bit is what’s happening with household consumption, which makes up the majority of the economy.

It grew by 0.5 per cent in the March quarter, but since then we’ve had sharp falls in consumer confidence leading up to and after the budget.

Read more.

Mining contributed the lion's share of the economy growth in the March quarter.

Mining contributed the lion's share of the economy growth in the March quarter. Photo: Michele Mossop

The minimum wage will increase by $18.70 a week to $640.90, under a decision by the Fair Work Commission.

The 3 per cent rise strikes the middle ground between $27 extra a week being sought by unions and a maximum of $8.50 being pursued by the Australian Chamber of Commerce and Industry.

Three per cent is higher than the 2.6 per cent awarded in 2013 and $2.9 per cent in 2012.

Employer groups had urged restraint and the federal government said the decision should be one that “supports jobs growth”.

Fair Work Commission president Iain Ross said it was a “modest improvement” in the real value of wages contained in modern awards.

He said the economic outlook remained sound and employment growth was forecast to be stronger, with the unemployment rate expected to rise “only slightly”.

“The increase . . . we have awarded in this review is lower than it otherwise would have been in the absence of superannuation guarantee rate increase,” he said.

“We have not taken into account the repeal of the existing carbon price or changes to tax transfer system announced in the 2013-14 budget.” 

This was because the commission had to consider existing policy settings, not future ones.

Inflation has been contained and is anticipated to slow in the period ahead,” Justice Ross said.

The decision directly affects more than 1.5 million employees in Australia.

The Australian Council of Trade Unions had been seeking a boost of $27 a week or 4.3 per cent. This would have lifted the minimum wage to $17.08 an hour, or $649.20 a week for a full-time worker.

The Australian Chamber of Commerce and Industry urged an increase of no more than $8.50 a week.

Read more.

Low-paid workers are set for a pay rise, as the minimum wage is set at $640.90 a week.

Low-paid workers are set for a pay rise, as the minimum wage is set at $640.90 a week. Photo: Jim Rice

While the Chinese economy has progressed rapidly, 25 years on from Tiananmen Square, the new repression in China is a bitter echo of the past, writes Asia-Pacific editor, John Garnaut:

China’s President Xi Jinping was 13 years old when his father was abducted, tortured, forced to confess and then publicly paraded with a wooden placard around his neck.  In those days children were used as hostages. Doctors denied medicine to sick prisoners while prescribing hallucinogens to make the healthy mad. No tool was too barbaric to force the Communist Party’s victims to submit.

After Mao’s death when Xi’s father, Xi Zhongxun, returned to power he advocated for laws that could guard against unbridled power and protect those who spoke unwelcome truths.

“Everyone likes to hear nice things and agreeable words, but many of these words are lies,” he said, while pushing for a speech-protection law, in his role as director of the legal affairs committee of the National People's Congress.

This and other endeavours to create a more inclusive polity were suddenly aborted on this day 25 years ago, when peacefully protesting students were gunned down around Tiananmen Square.

A surprising proportion of the lawyers, journalists and intellectuals who are leading today’s citizens’ rights movement in China are veterans of the Tiananmen protest movement. Some have been sent back to prison, like writer Liu Xiaobo, whose crime was to circulate a charter in 2008 that called for the Party to abide by its own laws.

Others chose to stay just inside the line, believing that useful work could still be done. That’s why the May 5 arrest of one of Liu’s close friends, the celebrated free speech lawyer Pu Zhiqiang, is so significant.

Read more.

This day 25 years ago: Peacefully protesting students were gunned down around Tiananmen Square.

This day 25 years ago: Peacefully protesting students were gunned down around Tiananmen Square.

Australian banks are “not as expensive as they look,” say analysts at Deutsche Bank.

In a new note to clients the brave team at DB have addressed one of the more controversial topics in the market.

The crux of their argument is that “relative valuations and earnings certainty” suggests the sector is not expensive.

Sure, on a P/E basis the banks look expensive, at 13.7 times estimated earnings – a 12 per cent premium to the 10-year average and a 17 per cent premium to the five-year average. And that’s despite a slow-down in earnings.

But while the headline P/Es look “a little on the nose”, they overstate the valuation of the banks, which are “actually looking fair value/slightly cheap”, considering:

  • relative valuations to the market
  • dividend yields remain compelling; and
  • relative earnings certainty favours the banks and P/Es are based on conservative earnings assumptions   

There is a large dispersion among the Big Four’s valuations, ANZ and NAB trading on forward P/Es of 12.8 and 12.2, while CBA and Westpac are more expensive on 15 and 14.3.

And while there has always been a gap between the banks, the discount for ANZ and NAB is 4 per cent larger than usual, reckon the analysts: “NAB’s poor 1H14 result can explain its discount, however we believe the ANZ discount is hard to justify given its above peer earnings growth profile in the next 3 years.”

That makes ANZ (buy) and NAB (hold) their top picks, over CBA and Westpac, which both rate a “hold”.

Bank yields, while lower than historical averages, still look good against the market's yield and cash alternatives. Source: Deutsche Bank

Bank yields, while lower than historical averages, still look good against the market's yield and cash alternatives. Source: Deutsche Bank

CLSA has slapped a “buy” recommendation on Premier Investments, as it initiates coverage on the retail group chaired by billionaire Solomon Lew.

According to the analysts, the company’s strong balance sheet and proven flexibility will help shield it from increased competition and cyclical downturns.

Popular stationery chain Smiggle and sleepwear brand Peter Alexander are singled out as its chief strengths.

CLSA notes Premier’s cash surplus of close to $280 million, along with its $270 million stake in Breville, lowers its price-earnings multiple to 12.6 times from 16 times. Set against an 8 per cent, three-year compound annual growth rate, the analysts say that’s “not a demanding multiple”.

They also highlight this valuation against the backdrop of a potential IPO of Smiggle, as revealed by AFR’s Street Talk today.

CLSA views Premier as a tale of two halves, pointing out Smiggle and Peter Alexander are arguably two of the “best retail businesses you will find anywhere”, even though the “remaining retail offering faces increasing competition and varied momentum”.

The analysts argue Smiggle’s EBIT may double in five years if the chain achieves its 200-store expansion target in the UK.

Quantitative analysis is nothing if not honest. And so Citigroup's global quant team paints an unflattering picture of the "attractiveness" of Australia's sharemarket. The places to be are Korea and Germany; the markets that score poorly are Mexico and Japan.

What does it all mean? It's a measure of style, fundamentals and macroeconomics. Trading the spread earned by shorting the "unattractive" markets and being long the "attractive" markets would have delivered a year-to-date return of 3.7 per cent.

<p>

Goldman Sachs has described Australand Property Group’s fresh suitor, Singapore-based Frasers Centrepoint, as “very aggressive” and notes that in recent property deals in the region the company has paid 50 per cent more than the next closest bidder.

Frasers pounced on the long-standing takeover target this morning, offering $2.6 billion or $4.48 per security for the trust in an all-cash bid.

That compares with Stockland’s final $2.5 billion share swap proposal struck at $4.42.

Australand has granted exclusive due diligence to Frasers, which used to be controlled by Singapore’s sovereign wealth fund, Temasek, and the Overseas-Chinese Banking Corp.

In a trading note, Goldman Sachs’s analysts said the company, now controlled by ThaiBev, was “well funded” and that it “seems to have a decent amount of cash [that it is] trying to put to work outside of Thailand”.

The bank also points out that in recent bidding for “some mixed-use commercial-residential real estate in Singapore . . . [Frasers] paid a little more than $S1 billion [$860 million] and bid 50 per cent more than the next closest bidder”.

In her upscale three-story beauty salon in a middle-class suburb of Athens, Doria Tsirigotis used to charge 30 euros for a haircut. But when a wrenching recession set in, her competitors started cutting their prices, first to 20 euros, then to 10 and even as low as 5 — or less than $US7.

Ms. Tsirigotis tried to resist discounting her prices. But as her clients lost jobs or had their wages cut, she eventually lowered her rates. Soon, revenues dwindled and her debts mounted, and she had to let go of all but two of her 13 employees. Last month, she downsized to a tiny salon across the street, renamed Cheap ‘N’ Chic — more fitting to the times.

“When prices fall so much, you can’t not follow the trend,” Ms. Tsirigotis said, gazing at the now-darkened beauty boutique she ran for 20 years. “But in such an environment, no one wins.”

On Tuesday, Europe’s statistics agency reported that annual euro zone inflation slumped to 0.5 percent in May from 0.7 percent in April, falling further below the 2 percent level that the European Central Bank considers healthy. Even in Germany, which has been the euro zone’s stalwart economy, inflation fell to a 0.9 percent rate in May, its lowest level in four years.

The situation has grown so alarming that the central bank is expected on Thursday to take extraordinary measures to try to stimulate the economy. Not only is it expected to cut its main interest rate for the first time since November 2013, but analysts also anticipate it will start charging commercial banks to keep money in its vaults — the imposition of so-called negative interest rates — whose consequences might be hard to predict.

Read more at the NY Times.

On the cusp of the June index rebalance JPMorgan has put itself out there and identified, much like Ange Postecoglou, who is in and who is out. For the S&P/ASX 200, the ins are tipped to be Amcom Telecommunications (AMM), Japara Healthcare(JHC - the newly listed aged care operator however ineligible until eight weeks post-IPO) and Tox Free Solutions (TOX). Ready to say goodbye are Acrux (ACR) and NRW Holdings (NWH).

For the top 100, Transpacific Industries (TPI) is likely to replace Regis Resources (RRL) and in the tight-knit top 50, Seek (SEK) is ready to usurp Worley Parsons (WOR).

S&P's announcement is due on Friday.

Back to court ... John Gay.

Back to court ... John Gay. Photo: Peter Mathew

Former Gunns chairman and convicted inside trader John Gay is to be taken back to court in a proceeds of crime action that regulators say will be a nationally defining case.

Australian Securities and Investment Commission chairman Greg Medcraft said the Commonwealth Director of Public Prosecutions would bring the action against Gay.

"I think the whole country was" disappointed with the original penalty, Medcraft told Greens Senator Peter Whish-Wilson in Senate Estimates.

The Tasmanian timber company boss was fined $50,000 and banned from directing a company after admitting selling 3.4 million Gunns shares in late 2009 while he had price sensitive information in the form of a monthly management report.

In Gay's trial, the crown alleged his sales of Gunns shares netted $798,000, but Justice David Porter said he was unable to determine the amount.

The Australian Shareholders Association said the modest fine and automatic five-year ban from managing a company would not have much impact on Gay, and missed a golden opportunity to  send a wider deterrence message.

Read more

Household savings remain high at 9.7 per cent.

Household savings remain high at 9.7 per cent.

More tidbits from the GDP data this morning, this time around household spending, which grew only 0.5% q/q, much weaker than growth in the previous quarter, but "we know there is more softness on the way," says JP Morgan economist Stephen Walters.

Retailers have reported that the unseasonably warm weather has depressed sales of apparel and footwear, and there has been a post-budget slump in consumer sentiment, which we expect to be a headwind for spending.

Consumers already are cautious - the savings rate stayed high at 9.7%, albeit well below the peak of nearly 13% in 2009.

Telstra will offer its mobile customers lower prices or extra data allowances as the company fights back against Optus, an analyst says.

Optus recently launched a series of mobile plan changes that gave users the ability to share download data allowances across multiple devices.

But it also greatly increased the amount of data users can download and make phone calls free on plans costing more than $60 per month.

Credit Suisse research analyst Fraser McLeish told clients the move was a "significant structural shift in mobile broadband pricing" and that Telstra would most likely sacrifice revenue growth to react.

This would be good news for Telstra's 15.8 million mobile service customers and bad news for its shareholders.

"The change in handset plan prices on their own would not have represented a significant issue for Telstra," he said. "However, the ability to share data across devices for almost no additional cost does add significant value to the Optus offering.

"We therefore expect Telstra is likely to react to protect share."

As a result, Credit Suisse has downgraded its rating of Telstra from outperform to neutral with a lower target price of $5.61 per share.

This is still above Telstra's current share price of $5.32.

The bank also cut its forecast of Telstra financial year 2015 revenues by $231 million based on the looming fight with Optus.

Read more.

Like a bought one: Telstra contract allows a new phone each year.

Like a bought one: Telstra contract allows a new phone each year. Photo: Andrew Quilty

Private equity firm Ironbridge will proceed with a sharemarket float of Monash IVF Group worth up to $300 million after investors offered to buy the stock within the target price range, sources told Reuters.

Investors agreed to pay $1.80 per share for a two-thirds stake in the Melbourne-based fertility company, within the target range of $1.65 to $1.95, said the source who was working on the deal but not authorised to comment publicly.

The final price will be between $1.80 and $1.90, the source said.

Banks are granting deeper discounts to preferred mortgage customers, with some lenders offering the biggest reductions in advertised rates since before the global financial crisis.

As lenders compete for a bigger slice of the lucrative $1.3 trillion home loan market, mortgage brokers say discounts have grown to as much as 1.4 percentage points off standard variable interest rates for the most sought-after customers.

While standard variable mortgage rates have not moved since August last year when the Reserve Bank cut official rates, some borrowers have been able to get a better deal by securing a discount off the headline rate.

The discounts are typically offered by banks as part of a package deal, and the biggest reductions are reserved for people who borrow the most money.

Mortgage Choice, the country’s largest independently owned mortgage broker, says discounts have hit 1.4 percentage points recently, and the trend drove more borrowers towards variable rate loans in May.

A discount of this size would take the average variable home loan interest rate to just 4.55 per cent.

‘‘We haven't seen discounting like this since well before the GFC,’’ spokeswoman Jessica Darnbrough said. ‘‘Lenders are hungry for business and with rates sitting at historical lows, they are all being forced to out-discount each other in a bid to grow their market share.’’

With its shares hitting fresh five-year lows this morning, recent buying of Acrux shares by the likes of AMP and United Super is looking a little misplaced.

Shares in the pharma junior slumped from around $1.70 to around $1 in a matter of weeks from late April on news the US Food and Drug Administration (FDA) had warned that it was looking into data which showed testosterone drugs could be responsible for increased incident of heart attacks, strokes and the like in men, with Europe also following suit soon after.

For Acrux, this has sliced $50 million off prospective revenues from a milestone payment for drug sales from 2014 to 2015-16.

Even though Acrux reckons the move will have no long lasting impact, investors aren't convinced, with its shares falling another 6.2 per cent to 79.7 cents so far today.

Japan's Nikkei is slightly lower in choppy trade as investors largely remain on the sidelines and digest a strong 7.5 per cent rally, which saw the index posting gains on eight of the past nine sessions.

The Nikkei is down 0.1 per cent at 15,013, after rising 0.7 per cent yesterday to 15,034.25, the highest closing level since April 4.

Market participants said investors are likely to refrain from building up further positions as they await events such as the European Central Bank meeting overnight and US jobs data on Friday.

‘‘The future is looking brighter for Japanese shares,’’ says Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities, citing factors such as a weaker yen and the relative cheapness of stock prices. ‘‘However, the danger of overheating is increasing. The Nikkei 225 is likely to trade in a range between 14,950 and 15,150.’’

Shares in Australia’s fifth-largest accounting firm by revenue, Crowe Horwath Australasia have jumped 14 per cent on the news the flagging firm has entered exclusive takeover talks with the nation’s biggest non-bank affiliated financial planning group, Findex Australia, backed by private equity group KKR Asset Management.

The Findex-KKR approach beat out private equity firm Anchorage Capital in a bidding war to acquire Crowe Horwarth by a scheme of arrangement for all the shares.

It emerged on Monday after Crowe Horwath entered a trading halt that Findex, which is part-owned by KKR Asset Management, the local arm of United States private equity firm Kohlberg Kravis Roberts, had made a multimillion-dollar takeover offer.

In the statement released on Wednesday, Crowe Horwath revealed it had been in talks with Findex since at least May 8, and had now entered an exclusivity arrangement to allow the suitor to conduct due diligence that will expire on July 30.

Hard on the heels of the latest profit downgrade in the drilling and mine services sector earlier this week from Ausdrill, Citi has taken the axe to its estimates for troubled contract driller Boart Longyear, slicing to 10 cents from 16 cents its target price for the shares, while also cutting its Emeco target.

Like Ausdrill, Boart Longyear is exposed to gold, copper and iron ore, with activity in each of these areas "subdued, suggesting potential further downside risk to exploration activity in CY14". At its recent annual general meeting, Boart Longyear noted there has been no recovery in capital spending by the major miners.

On the back of Boart Longyear's March quarter EBITDA of $8 million, Citi has cut by 19 per cent its calender 2014 forecast to $52.8 million from $65.5 million.

"We assume drilling services utilisation follows a similar trend to calender 2013 peaking at 45 per cent in 2Q and declining back to 40 per cent in 3Q and 31 per cent in 4Q," it told clients this morning.

Ditto for Emeco Holdings, a mining equipment rental group, where Citi has cut to 25 cents from 29 cents its target price.

"Mining services industry feedback and listed company updates all point to continued margin pressures," Citi said. "In addition, rental equipment providers face a market with oversupply courtesy of available equipment from both contractors and rental providers, although some kit is leaving Australia.

"Miners remain focused on cost management and contracts are fairly short-term in nature, often utilising only small parcels of kit."

Despite the downgrades, Boart shares are up 5 per cent at 20 cents, with Emeco ahead 2 per cent at 23 cents and Ausdrill off 1 per cent at 86 cents,  reversing part of Tuesday's gain.

Quick reaction to this mornings strong GDP figures, courtesy of ANZ's economics team:

A 1.1% q/q gain in GDP seems a particularly good result given the headwinds the economy is currently facing, however it overstates the underlying strength in the economy with more up-to-date information on the economy suggesting that growth is likely to step down in Q2.

That is, retail sales data suggests that household consumption may slow further, while net exports are unlikely to make such a large contribution to growth.

Moreover, the drag from the wind-back in mining investment is likely to be sharper over coming quarters as large-scale LNG projects approach completion.

That said, we continue to expect moderate growth in the economy through 2014 as the economy transitions from mining investment led growth to non-mining drivers of growth.

For policy, today's numbers look to be broadly in line with the RBA’s forecasts in the May Statement on Monetary Policy, with the Bank also expecting lower quarterly GDP growth in coming quarters.

The Governor's statement yesterday continued to suggest that the Bank is on hold for some time, with the slow gradual turn in the economy likely to generate little significant improvement in the unemployment rate this year.

Here's a piece of data we missed from this morning that will likely go largely ignored in all the excitement over the GDP numbers:

Businesses are starting to feel the pinch from the federal budget, saying spending and demand have been inhibited by policy uncertainty.

A new survey shows that while there has been a pickup in the services industry it is on shaky ground, amid business and consumer confidence volatility after the May budget.

The Australian Industry Group's Performance of Services Index rose 1.3 points to 49.9, just below the 50 level that separates expansion from contraction.

But Ai Group chief executive Innes Willox said businesses are concerned about weakness in the local economy and the dampening effects of the public reaction to the budget.

"Several respondents said policy uncertainties arising from the budget appear to be inhibiting demand for business-to-business services, while prospective changes to pensions, family benefits and public sector jobs already seem to be affecting consumer sentiment and local spending," he said.

The survey found that growth in the sector was confined to health and community services, finance and insurance, and personal and recreational services during May.

But the wholesale trade sub-sector, which has contracted every month since October 2011, continued to decline.

Retail trade was also hit by softer sales and new orders.

"Industry participants indicated that subdued consumer confidence and discretionary spending, a high Australian dollar, and warm weather this autumn/winter are the key impediments to growth," the AiGroup survey said.

Employment in the services sector also declined in May, as employers remained cautious about the near-term outlook.

The Australian economy grew 1.1 per cent over the first quarter of the year, according to ABS data, ahead of the consensus forecasts of 0.9 per cent.

Year-on-year growth printed at 3.5 per cent, again, better than the 3.2 per cent consensus expectation.

The dollar is up one third of a US cent to the day's high of 92.92 US cents.

Having already cut billions of dollars, mining companies are now scratching for savings wherever they can find them, from renegotiating rubber contracts for tires, to adopting driverless trucks and trains. Even menus aren’t exempt, Bloomberg writes.

Kinross Gold workers in Mauritania, West Africa, are losing their posh Nespresso brand coffee machines advertised by movie star George Clooney. And Rio Tinto has been cutting back on meat pies.

“The world is moving into surplus in most commodities. The focus absolutely has to be on cost-cutting and to cut out the excesses of the past five years,” says Deutsche Bank mining analyst Rob Clifford. “And you need to focus on the small stuff. Every pie counts.”

At a time when more flush industries are lavishing gourmet items on its workforce, from fresh sushi at Google to new “paleo diet” food stations at Apple’s headquarters, the mining industry is jettisoning everything from bottled water to barbecues.

With more than $US50 billion in revenue last year, Rio Tinto saved about $60,000 by reducing servings of hot meat pies and sausage rolls. That was part of a broader effort that stripped $US2.3 billion from costs last year in an overhaul of global operations.

Traders are selling down the Aussie dollar ahead of the 11:30am release of ABS data on quarter one GDP.

Stocks are also trending lower.

Economists generally added to their estimates for growth over the quarter following yesterday's strong export figures, with consensus forecasts around 0.9 to 1 per cent for the three months.

But other components of GDP look less impressive (see post at 10:12).

The Aussie is trading lower heading into this morning's GDP data.

The Aussie is trading lower heading into this morning's GDP data.

Australand shares are back trading, up 6.3 per cent to $4.58, 10c above the cash offer from Singaporean Frasers Centrepoint (see post at 9:33).

Australian fund managers are being given a lesson in New Zealand economics, as they work through Kiwi equipment rental company Hirepool’s pre-marketing research, reports the AFR’s Street Talk column.

Deutsche Bank’s report, dated June 2, tells investors that New Zealand is experiencing “a period of economic expansion that is becoming increasingly broad-based”, with the Reserve Bank forecasting 2.8 per cent gross domestic product growth in 2014 and another 3.5 per cent in 2015.

Too bad then Deutsche also notes the relationship between the country’s economy and Hirepool’s performance is not perfect, with revenue forecast to drop 7.6 per cent in the 2014 financial year because of the timing of some of the country’s big projects.

Fund managers were told that Hirepool would turn an $NZ25.6 million ($23.4 million) profit after tax in the 2015 financial year on a revenue of $NZ156.5 million.

Earnings before interest and tax is predicted to hit $NZ41.4 million, up 61.6 per cent on the current year.

Deutsche’s analysts valued Hirepool’s equity at $NZ260.2 million to $NZ319.6 million, or 10.2-times to 12.5-times forecast 2015 financial year profit. It also implied a 6.5 per cent to 5.3 per cent dividend yield.

Hirepool is owned by mid-market private equity firm Next Capital, which seeks to list the rental company in Australia and New Zealand in the coming months.

Brokers have analysts marketing Hirepool in the coming fortnight, before the float is priced and an offer opened.

Hirepool made 25 per cent of its revenue renting earthmoving equipment in the 2013 financial year, while 21 per cent was access rentals and another 18 per cent leasing tools.

Utilities may be well supported in the present low-interest rate environment, but a looming change to industry dynamics may help to change all that.

Regulatory changes aimed at squeezing returns on their assets in the electricity distribution space when their next round of spending plans are scrutinized is keeping many brokers on the backfoot in recommending clients buy into listed infrastructure plays such as Spark Infrastructure, Duet and SP Ausnet.

But a shift in the pricing approach of the sector may help to sidestep these pressures.

One of the largest transmission outfits, Transgrid, is leading the way by pushing for ‘peak’ pricing, as it moves away from pricing just on usage.

Other players will follow suit.

Read more.

 

Electricity

Electricity Photo: Louise Kennerley

After more than a month since the passing of Cabcharge founder Reg Kermode, the company has announced a new chief executive.

Company secretary Andrew Skelton will step up into the role. It comes weeks after Russell Balding moved into the chairman role.

Mr Kermode held the chairman and chief executive roles until the day before his death on May 1.

Will both roles filled internally, it’s unlikely the company will deviate much from its previous strategies, despite the company’s struggles.

Cabcharge shares are up 0.4 per cent to $4.11.

Shares in iconic surf brand Quiksilver fell a whopping 41 per cent overnight, as Wall Street reacted savagely to a dismal earnings report.

At last trade on the New York Stock Exchange on Tuesday the share price was $US3.41, a loss of $US2.38 or 41.11 per cent.

On Monday the 45-year-old company released its second quarter earnings report, for the three months to April 30, reporting a 9 per cent drop in net revenue and a net loss of $US42 million.

Its biggest loss was felt in the American market, where net revenues decreased 18 per cent, followed by Australia-Pacific with a loss of 6 per cent.

Quiksilver chief executive Andy Mooney said in a statement that improvements in direct sales to consumers and reduction in expense structures were offset by "decreased net revenues in our wholesale channel, especially in development markets in North America and Europe".

"Consequently, pro-forma adjusted EBITDA decreased versus the prior year," he said.

Read more.

Funds management legend John Sevior has poured cold water on the idea that specialty retailer Premier Investments is working towards a rival bid for David Jones despite the recent share buying by Premier's executive chairman, Solomon Lew.

Following reports that Premier Investments’ chairman Solomon Lew may already control more than 5 per cent of the upmarket retailer, Sevior noted that the shares were being acquired by an entity solely controlled by Lew and not the retailer.

“That probably rules out a run by Premier,” he told Smart Investor. “David Jones would be a big bite and Premier has some things within its own business it has to work on.”

Speculation about Lew’s intentions have intensified ahead of a June 30 meeting of David Jones shareholders where a $2.2 billion bid for the department store from South African retailers will be put to a vote.

As Sevior points out, Premier has one of the healthiest balance sheets of any ASX listed company. With more than $600 million in cash at its disposal – including its equity stake in Breville - a play for David Jones would not be out of the question.

Premier was among the first companies Sevior took a stake in after he left Perpetual to start his own fund, partly because of the high regard he has for Lew and the management team.

But, as Sevior explains, Premier already has its hands full with its suite of diverse retail offerings.

In first of a two part interview with Smart Investor, Sevior reveals the process behind his simple stock picking strategy.

In addition to discussing his investment in Premier he also discloses why he thinks analysts have got the valuation on Caltex wrong and the stringent investment criteria he applies at Airlie Funds Management, the firm he established late in 2012 after a long sabbatical from former employer Perpetual.

For the full story visit www.afrsmartinvestor.com.au ($).

Fashion retailer Noni B says it is considering several takeover approaches.

The Kindl family, who own a 40 per cent stake in the company are in discussions with the retailer’s independent directors about alternatives to the capital structure of the company, according to an ASX statement.

Reports last week suggested that the Kindl family could be considering taking it private after a full-year loss report of $8 million. At current levels the company has a market capitalisation of around $16 million. 

Preliminary interest has been expressed in the company, “but there is no guarantee of the transaction proceeding” a Noni B spokesperson said. The company did not name the potential bidders.

Even so shares in the company have surged 10 cents, or 27 per cent, to 49.5 cents each.

Noni B currently has 212 stores across Australia, mostly catering to women over 40.

The company has forecast an annual loss of between $1.8 million and $2.2 million due to falling sales. Unseasonably warm weather has hurt sales at the group, down 7.8 percent for the past year.

A tough start to the day's trading, with investors moving towards tradition safehaven corners of the market such as utilities, listed property, consumer staples, and gold miners - the only sectors not to have gone backwards.

The ASX 200 and All Ords are both down 15 points, or 0.3 per cent, to 5464.7 and 5445.6, respectively.

Consumer discretionary stocks are the hardest hit, while miners have acted as the biggest drag on the market.

After some relatively weak data early in the week, views are mixed about this morning's impending growth figures for the Australian economy in the first quarter.

Expectations among economists are for a 0.9 per cent growth rate quarter-on-quarter and a 3.2 per cent rate year-on-year, but data on Monday showing approvals for the construction of new homes slumped 5.6 per cent in April and slowing momentum in retail sales, have added further headwind to growth expectations.

However, NAB senior market economist Spiros Papadopoulos actually revised up his GDP forecasts to 1 per cent for the quarter and 3.3 per cent for the year, but said that growth in areas other than the headline figure will be mixed.

''The headline growth of 1 per cent belies the very mixed picture below the surface with dwelling investment quite strong, consumption solid, while business investment and government will be close to flat in underlying terms,'' Mr Papadopoulos said.

''While the expenditure measure of GDP will be solid, the income measure is looking weak with only 0.2 per cent in nominal aggregate wage payments and a modest 1 per cent rise in gross operating profits,'' he said.

Much of the positive speculation surrounding GDP forecasts is centred around Tuesday's account deficit figures, which nearly halved to 1.4 per cent of GDP, driven by a strong improvement in exports.

The result pushed UBS economist Scott Haslem to revise up his forecast for first quarter GDP to 0.9 per cent, from 0.7 per cent.

Read more.

Accounting firm Crowe Horwath has signed an agreement in relation to a takeover proposal from Findex Australia, one of Australia's largest of the dwindling supply of independent wealth management businesses.

There was no mention of the offer price in the ASX statement.

Findex is partnering with KKR Asset Management - an arm of the private equity firm of the same name.

Crowe confirmed the company is no longer in discussions with rival bidder Anchorage Capital Partners.

Residential property developer Devine has increased its full-year profit guidance to between $12 million and $14 million profit before tax for the year ending 31 December 2014, up from prior guidance of $7 million to $10 million.

The lift in guidance is the result of "increased confidence" in expected earnings thanks to a number of projects have moved "substantially" forward and should be finished this calendar year, said the company in a statement to the ASX.

CEO David Keir said the company sold $110 million in assets over the past six months, which has "enabled the Company to investigate and negotiate a number of new development opportunities that will underpin the future of the business”. 

Amcom Telecommunications is in a trading halt pending the release of an announcement by the company in relation to a proposed equity raising.

The shares will be suspended until start of trading on Friday at the latest.

Stockland's offer for Australand has been gazumped by a foreign bidder after the property developer announced this morning that it had received a $4.48 per security cash offer from Singapore-based Frasers Centrepoint.

The bid trumps Stockland’s recently revealed scrip offer of $4.35, which Stockland boss Mark Steinart had described as “compelling”.

That would presumably make the new offer “very compelling,” and analysts had expected it to be the final one the company would make.

The Australand board "intends to recommend the proposal, in the absence of a superior proposal and subject to an independent expert opinion,” Australand said in a statement to the ASX.

Australand's share last traded at $4.31.

Read more.

Bidding war: Australand chief Paul Isherwood.

Bidding war: Australand chief Paul Isherwood. Photo: Michel O'Sullivan

Qantas chief Alan Joyce expects average airfares will begin to rise now that the long-running domestic capacity battle against Virgin Australia seems to have ended.

He said underlying demand growth in the local market was 4-5 per cent a year, but in the past few years capacity had grown by about 8 per cent.

''What that has meant is roughly for every percentage over the demand that meant a 1 percentage yield fall,'' he said in reference to returns on fares. ''And that is why our yields have been down by about 4 per cent.''

Qantas has said it will freeze domestic capacity in the first quarter of the 2015 financial year at a time when consumer confidence is low and demand in the resources sector slows.

Mr Joyce said the airline would still be offering attractive discount fares but the more rational capacity market meant fewer of those would be available once the airline was comfortably filling its seats.

Overall, domestic airfares have fallen by 21.6 per cent over the past decade and are at extremely low levels.

Read more.

It might have been the release of David Jones' best same-store quarterly sales growth in four years that triggered billionaire Solomon Lew's decision to begin scooping up shares in the upmarket retailer, appalled at the idea South Africa's Woolworths was about to buy the chain on the cheap.

Documents obtained from market participants by BusinessDay reveal Mr Lew, helped by a firm run by veteran stockbroker Brent Potts, bought David Jones shares on May 9, less than 72 hours after David Jones had impressed analysts with booming online sales and the strongest store-sales growth since the January quarter in 2010.

The quarterly result posted on May 6 was especially important as it was billed as the final public sales call from David Jones before the $2.2 billion takeover by Woolworths was expected to be finished.

David Jones chief Paul Zahra, normally very talkative, particularly with a good sales number to showcase, had cancelled the usual sales presentation as everyone believed by late June Woolworths would be its new owner.

No doubt Woolworths, which has a long and feisty history with Mr Lew through their fight over Country Road, was excited about its deal as David Jones trounced rival Myer in terms of sales for the three months to April and, importantly, started to show Mr Zahra's turnaround strategy was working.

But lurking in the shadows was Mr Lew and he struck only days later as everyone focused on Woolworths' seemingly unbeatable $4 cash a share offer.

Read more.

<p>

US stocks were little changed, following all-time highs for benchmark indexes yesterday, as investors awaited a European Central Bank decision on stimulus measures and a report on American employment in May.

On the other side of the pond, European stocks declined from a six-year high as a report showing lower-than-estimated inflation in the euro area prompted investors to weigh the outlook for interest rates before Thursday night’s ECB decision.

“All eyes are on the ECB meeting on Thursday,” Ion-Marc Valahu, a Clairinvest in Geneva. “Equities are mostly down as investors do not think that the ECB will do enough.”

Euro-area inflation slowed in May more than economists forecast, cranking up pressure on the ECB to deploy a range of measures to kindle prices and drive growth. The rate fell to 0.5 percent from 0.7 percent in April, the European Union’s statistics office in Luxembourg said today. The median forecast in a Bloomberg News survey was for a decline to 0.6 percent.

ECB president Mario Draghi said last month that policy makers were comfortable with taking action at their next meeting.

The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,924.24 at 4 p.m. in New York. The Dow Jones Industrial Average slipped 21.29 points, or 0.1 percent, to 16,722.34. Both gauges reached records yesterday. The Russell 2000 Index of smaller companies dropped 0.2 percent. About 5.2 billion shares changed hands today on U.S. exchanges, 18 per cent below the three-month average.

Traders are sitting on their hands, waiting for the response from the ECB before setting their bets up,” Chad Morganlander, a fund manager at Stifel Nicolaus & Co., said. “There’s an overall anticipation that the ECB will be aggressive and that the jobs numbers on Friday will be better than expected.”

Local stocks are poised to open flat ahead of GDP date this morning and after global equities paused ahead of the ECB's crucial policy meeting Thursday night.

Here's what you need2know:

  • SPI futures up 10 points to 5492
  • AUD at 92.57 US cents, 94.92 Japanese yen, 67.95 Euro cents and 55.28 British pence
  • On Wall St, S&P 500 flat, Dow -0.1%, Nasdaq -0.1%
  • In Europe, Euro Stoxx 50 -0.2%, FTSE -0.4%, CAC -0.3%, DAX -0.3%
  • Spot gold up 0.1% to $US1246.02 an ounce
  • Brent oil flat to $US108.83 per barrel
  • Iron ore adds 0.4% to $US92.50 per metric tonne
  • LME three-month copper at $US6868 per tonne

 

What's on today:

  • Australia: GDP Q1 (11:30AEST); Ai Group services PMI
  • Japan: PMI services, PMI composite
  • EU: PMI service, composite, PPI, GDP; Germany PMI composite, services
  • US: Trade balance, ISM non-manufacturing index, Federal Reserve Beige Book

 

Stocks to watch:

  • BHP says it might cut iron ore jobs as part of a productivity review
  • Fonterra: Whole milk prices tumble 8.5 per cent
  • Kathmandu: trades ex-dividend
  • Papillon Resources: B2Gold signs merger pact with company
  • Perseus Mining AGM
  • Premier Investments may consider IPO for Smiggles brand, reports AFR
  • SMS Mgt cut to sell vs hold at Credit Suisse; price target $3.35
  • Spectrum Rare Earths cut to speculative buy versus strong buy at BBY
  • Thorn Group: Chairman to step down August 26

 

Read more.

Good morning and welcome to the Markets Live blog for Wednesday.

Your editors today are Jens Meyer and Patrick Commins.

This blog is not intended as investment advice.

BusinessDay with wires.

 

Quotes Search

Sort comments by:
  • Bad times are coming baby. People in vans bathing in the local pool making out they are "backpackers". Gonna get worse.

    http://www.theage.com.au/victoria/travellers-set-up-home-in-suburban-melbourne-street-20140604-39iwm.html

    Housing Van boom!

    Commenter
    Gordon Gekko
    Location
    Greg Coffey World
    Date and time
    June 04, 2014, 4:28PM
  • If you've had a good day trading, and aspire to music. Try a violin...like this one. Enjoy. GG.

    http://blogs.marketwatch.com/thetell/2014/06/03/goldman-sachs-ex-banker-wants-you-to-own-a-violin-shaped-pool-just-like-his/

    Commenter
    Gordon Gekko
    Location
    Greg Coffey World
    Date and time
    June 04, 2014, 4:22PM
  • Given other Share Markets are at or close to all time highs, what is it with the ASX?

    Peaked at 6,800 Points during the "Fool's Gold" period of the Mining Boom Phase 1 and now can not get past 5,500 Points.

    We need to look at those controlling our Listed Companies, their abilities their agenda's and regulation.

    Then there is the headwind created by an neo-conservative idealogical government which has not only crippled the economy - it has buried it.

    To the benefit of who exactly?

    Given the ASX mirrors the state of the economy and confidence, the record under the neo-cons (apart from 2004 -> 2007) makes interesting analysis.

    The performance has bern abysmal.

    Commenter
    Tony
    Location
    Date and time
    June 04, 2014, 4:16PM
  • Fact #2: A subscription to our market-crushing Motley Fool Share Advisor newsletter is likely tax deductible (please check with your accountant).

    bwahaha..so is that tip about forge group being a buy

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    June 04, 2014, 4:14PM
  • Why is it the ASX is the only market in the world that doesn't bounce up again through the day. I must admit it does its best on Saturday and Sunday and very smooth on Public Holidays. Good news doesn't matter Bad news down we go. Up less than 500 points in 5 years. Seriously someone is having a lend.

    Commenter
    Goldfinger
    Location
    Sydney
    Date and time
    June 04, 2014, 4:00PM
  • Guy claims the Japanese residential property bubble popped in 1991. How come in dropped @ 30% in real terms between 2000 and 2005? That's no debunk.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 3:59PM
  • Am i missing something in the minimum wage article @ 3:29pm? It starts by saying "minimum wage will increase by $18.70 a week to $640.90" but at the end of the article is says unions wanted a "$27 a week or 4.3 per cent. This would have lifted the minimum wage to $17.08 an hour, or $629.20 a week for a full-time worker." So a higher hourly rate equals a lower week wage?

    EDs: Good spot, DR. We'll look into it. Chrs

    Commenter
    DR
    Location
    syd
    Date and time
    June 04, 2014, 3:57PM
  • Well today's market reaction shows that no-one was fooled for long by the GDP number. That was based on the legacy of previous management. Future GDP will be all of the new govt's own work and won't look anywhere near as good. A contractionary Budget won't do an economy still in transition any good at all. Looks like Labor will have to clean up the coalition's neglect, yet again.

    Commenter
    mitch of ACT
    Location
    Date and time
    June 04, 2014, 3:54PM
    • Thanks Pascoe for backing me up.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 04, 2014, 4:01PM
    • do you really think so @Mitch?

      Commenter
      craig
      Location
      Date and time
      June 04, 2014, 4:04PM
    • @craig, we all know that you don't like to read anything critical of the economic vandals that you support.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 04, 2014, 4:24PM
    • Mitch - Current mess is the previous Governments continual mismanagement from both previous Governments term before... and the previous ones before that. Both parties are so equally blamable in all respects. The biggest point of difference is the sheer amount of legacy spending and costs Labor put in place. Australia is holding the bundle.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 4:34PM
  • So with an increase to the Australian minimum wage of 3%, effective from the beginning of next month; you would think that would be negative for Woolworths?

    They would have to be the largest employer in the 'minimum wage' demographic in the country, and that's a 3% hit to their cost of doing business.

    Commenter
    a
    Location
    Date and time
    June 04, 2014, 3:43PM
    • Woolies wages bill will go up but as Pascoe points out the people who shop at Woolies will have more money to spend. Employers who oppose wage increases for their own low-paid e/ees then cry foul when their customers stop spending because their wage packets can't keep up with inflation.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 04, 2014, 4:07PM
    • No, because their prices are increasing and are a component of cpi.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 4:08PM
    • just remember to use your checkout person and not the automated system.those kids rely on that money.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 4:43PM
  • Don't worry Super Mario is going to save us with some financial magic in Europe tonight!
    So get ready to go hard in June like a randy baboon.

    Commenter
    Nintendo
    Location
    Date and time
    June 04, 2014, 3:41PM
  • *yawn. i think i might go ahead with buying that holiday home up the coast. prices are relatively low and have been for a while, interest rates don't look as though they are going up any time soon more equity than i know what to do with and the ASX is boring me. thoughts on Lighthouse Beach in Port Macquaire? Lovely place. Thinking of retiring up there soon.

    Commenter
    Sydney
    Location
    Landlord x 1,2,3 (none of your beeswax)
    Date and time
    June 04, 2014, 3:11PM
    • Well done you!

      Commenter
      I I I
      Location
      me me me
      Date and time
      June 04, 2014, 3:45PM
    • Absolutely beautiful place lighthouse beach in PM, good luck with your purchase, is there anything for less than $1m these days?

      Commenter
      Viking
      Location
      Sydney
      Date and time
      June 04, 2014, 3:46PM
    • Joking...Keep it a secret until I buy more...I've got a couple over where the names are from ships...Mermaid...The halyard....great return, hospital...airport...Oakshot did a lot of good up there despite the bad he did to the country. I don't so much like the beach area...I live at the beach in Sydney and down the coast sometimes...It's not all it's cracked up to be......I wish there was a way I could get some great info to you without everyone knowing it....hey eds...any plans in the future to have private messages or something?....Catch you at the pub in 15 years.

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 3:48PM
    • port mac is a long drive from sydney.
      port stephens is much closer and come early next year with have an international airport.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 4:39PM
  • Today is a mirror image of yesterday, if this cycle continues tomorrow I am thinking the correction we had to have has started!

    Commenter
    cyril
    Location
    Date and time
    June 04, 2014, 3:07PM
  • S&P ASX 200 up 95 points YTD...thats so awesome....not.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    June 04, 2014, 2:35PM
    • True but up over 500 points from 4/6/13

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 4:26PM
    • Unless sales of Axiron really collapse, ACR will continue to be profitable and pay dividends. Currently 8c per share but that will drop. At some point ACR will be a good buy, IMO, but for now I'm waiting.

      Commenter
      Yin or yang
      Location
      Date and time
      June 04, 2014, 2:34PM
  • And so it will go...

    There once was a day
    When we all sold in May
    But now that's too soon
    So we all sell in June

    You've made a new friend
    With this strange annual trend
    So next year comes by
    And you sell in July

    The next year will come
    And it may fool some
    But you won't go bust
    You'll wait till August

    Now you're onto the game
    And keep doing the same
    But you must remember
    Don't sell till September

    The slow pundits say
    'September's the day!'
    But you're staying sober
    At least till October

    But then you lose all
    In a dramatic fall
    When you didn't remember
    This year was November :(

    Commenter
    Gareth
    Location
    Sydney
    Date and time
    June 04, 2014, 2:14PM
    • Brilliant!

      Commenter
      cyril
      Location
      Date and time
      June 04, 2014, 2:26PM
    • well done sir/madam

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      June 04, 2014, 2:32PM
    • Take a bow

      Commenter
      heybert
      Location
      Sesame Street
      Date and time
      June 04, 2014, 3:41PM
    • Thank you, Gents. On a day like today, it was a nice distraction from looking at my portfolio view.

      Commenter
      Gareth
      Location
      Sydney
      Date and time
      June 04, 2014, 3:56PM
  • "Some 95 per cent of the extra credit extended by banks since mid-2012 has financed residential or commercial property, according to an analysis that highlights the lopsided nature of the post-mining boom economic transition."

    Wow so much innovation. Clever aren't we?

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 2:13PM
    • I am actually concerned at the debts some of the people in my circle have taken on recently (although not my close friends)... If rates go anywhere near 8%... these same people will be in ruins. It just baffles me that the younger generation (30 or under say) is taking on huge debts on the back of advice from both financial planners and their own family members! Ha! Again, they have been warned.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 2:37PM
    • Liberator: Thanks for letting us know they were in the circle of people you know, but not your close friends. That really gave your comment an insightful bent and I'm glad we know your friend structure now....

      Commenter
      DR
      Location
      syd
      Date and time
      June 04, 2014, 3:13PM
    • Rates aren't moving upwards for a long time. So settle down. In the meantime pay off your loans using historically low interest rate. In 1 and a half years my partner and I have smashed off 8 years of a 30 year home loan. Not rocket science dudes. Stop putting the wind up everyone.

      Commenter
      SI
      Location
      Date and time
      June 04, 2014, 3:30PM
  • The consensus from my survey is that we need to drop interest rates to get the $AUD down to more accommodating levels, thanks for all you input guys!

    Commenter
    Xenaphon
    Location
    Date and time
    June 04, 2014, 2:07PM
  • Close SWM short for 24%.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 1:55PM
    • 24% = winning.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 2:41PM
  • Okay. So now we've established advice from here is far superior to massively government paid consultants....Here's what needs to be done.

    Implement company tax according to % foreign ownership. Wealth tax. Stop population growth., Fixed.

    Commenter
    JohnBB
    Location
    Date and time
    June 04, 2014, 1:47PM
    • I could fix the debt and tax issues in less than a day. Remove all tax loss write offs, concessions, negative gearing and just a few other false wealth creating words and the nation would function at real market levels. Investors would have to buy and sell just like real family home owners... except the tax payer is not funding their poor investment loss.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 2:44PM
    • Hey Lib, Im interested on your point of view on capital losses on share A being of set against capital gain on share B, if you do this, and if/why this should vary across different investment classes.

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 2:54PM
  • Are YOU getting 1.4% off your mortgage? If not, you have been screwed by your bank.

    Commenter
    Viking
    Location
    Sydney
    Date and time
    June 04, 2014, 1:29PM
    • All Banks have held back margin additions on cash rate drops which reflect directly with their disproportionate profit gains the last 5 years when compared with other business / industry. This is all at the expense of home owners and small business.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 2:06PM
    • anyone want to offer up what they are paying at the cba currently as an indicator?

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 2:15PM
  • Uncertainty rising, so will volatility, time to play defense & invest in commercial REIT's, Utilities, Staples, Telcos and Infrastructure.

    Commenter
    me
    Location
    sydney
    Date and time
    June 04, 2014, 1:27PM
  • @1259 comment
    Eds AMP have been reducing the stock not increasing of
    A
    Constant
    Risk

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    June 04, 2014, 1:25PM
  • Australia still in growth phase , what an incredible out performance against the rest of the western world.

    Congratulations to all those people who work hard and contribute and to the others well...I have to get back to work.

    Commenter
    Harry Rogers
    Location
    Date and time
    June 04, 2014, 1:21PM
    • Yep it's hard having a country with mineral wealth being handed to you. The real trick is to be born with Australian parents. That takes skill alright. LOL.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 1:45PM
    • When you've finished patting yourself on the back there are 650,000 unemployed who'd like a job.

      Commenter
      Herman
      Location
      Date and time
      June 04, 2014, 1:49PM
    • Yes. We are working harder than ever with no reward so business owners and CEOs can maintain their extravagant life styles. Little said for the average worker. I have never seen society so highly strung out, looking pale and sick on the trains, worried and no doubt aware things are not right.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 2:03PM
    • Harry you forgot the />sarcasm at the end of your post. As you can see, some people took it seriously.

      Commenter
      Davo
      Location
      Sydney
      Date and time
      June 04, 2014, 2:30PM
    • Davo,

      "And I think to myself...what a wonderful world"
      with apologies to Satchmo

      Commenter
      Harry Rogers
      Location
      Date and time
      June 04, 2014, 2:54PM
  • BSB

    Sorry I think I put wrong names in box. My apologies.

    Commenter
    Harry Rogers
    Location
    Date and time
    June 04, 2014, 1:18PM
  • "With its shares hitting fresh five-year lows this morning, recent buying of Acrux shares by the likes of AMP and United Super is looking a little misplaced."

    Why invest in your own SMSF when AMP will do the job so excellently for you eh?

    Commenter
    Viking
    Location
    Sydney
    Date and time
    June 04, 2014, 1:18PM
    • Unless sales of Axiron really collapse, ACR will continue to be profitable and pay dividends. Currently 8c per share but that will drop. At some point ACR will be a good buy, IMO, but for now I'm waiting.

      Commenter
      Yin or yang
      Location
      Date and time
      June 04, 2014, 2:34PM
  • "Citi has taken the axe to its estimates for troubled contract driller Boart Longyear, slicing to 10 cents from 16 cents its target price for the shares"

    An impressive effort from BLY. Not easy to go from a share price of $22.20 in 2007 to 20c now.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 12:35PM
    • isnt there a mining boom that will last for generations giving them work?

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 1:13PM
    • Agree Allan, mucho impressive effort. Maybe Billabong and Quicksilver will give them a run for their money?

      Commenter
      Viking
      Location
      Sydney
      Date and time
      June 04, 2014, 1:15PM
  • new market tool
    for many a fool
    sell in june
    is the right tune
    used to be may
    but sad to say, that's had its day

    Commenter
    cyril
    Location
    Date and time
    June 04, 2014, 12:35PM
  • Im watching my miner mates ( ex fifo's ) staying home and now desperate for work. a couple have been working on rigs in the timor sea since exploration work in oz dried up. read yesterday that the laws relating to 457's and workers on offshore rigs are about to change. those fancy cars are on the market and the renos have stopped. I tried warning them and they laughed me down. 1 month on and now 2 months off.

    Commenter
    smilingjack
    Location
    Date and time
    June 04, 2014, 12:17PM
    • I know a few people lost their FIFO work recently. I had the same warnings. Aug last year I told them to have plan B ready. One went plan C = buy 2 x new cars. Ah well be warned.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 1:13PM
    • Likewise fifo blokes working on Qld gas pipeline.
      Asking for Super back to live on.
      Big money eh?

      Commenter
      Red Rooster
      Location
      Darkened Room
      Date and time
      June 04, 2014, 1:16PM
    • sad but true, thing is its a specialized industry and the glut of work lead to taking on more under qualified to fill the gap.....taste the coin then chase it, but if your not worthy / savvy enough to get inside the industry....these were all temp jobs anyway, sure the onflow of work isnt a pick and choose anymore...but good times dont last. plan b,c,d and e should have been sorted last year.unfortunately.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      June 04, 2014, 1:32PM
  • been watching proceedings very closely, think this will go back to 5400 and then turn around and head for 5600

    Commenter
    screen watcher
    Location
    Date and time
    June 04, 2014, 12:03PM
  • Mining phase 1: prices boom due China's expansion from massive infrastructure spending.

    Mining phase 2: massive investment in expansion of new mines to capitalise on bonanza prices.

    Mining phase 3: China transitions to services to raise the standard of living of the 500M poor. Resource prices fall due to lower demand and higher supply.

    We are now in phase 3. 70% of the profits go overseas and employment in construction and services has crashed.

    Any GDP boost from increased supply is easily negated by massive immigration and lower prices.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 12:02PM
  • "The Australian economy grew 1.1 per cent over the first quarter of the year, according to ABS data, ahead of the consensus forecasts of 0.9 per cent."

    Forgive me for asking, but which businesses are growing?

    Commenter
    Viking
    Location
    Sydney
    Date and time
    June 04, 2014, 12:00PM
    • Data doesn't match my assumptions, therefore data is wrong.

      Clearly lots of businesses are growing. Isn't that the point of this share trading business?

      Commenter
      Got it
      Location
      Date and time
      June 04, 2014, 12:20PM
    • Financial services, pharmaceuticals & residential and commercial construction.

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      June 04, 2014, 1:10PM
    • Well if it was as easy as that 'Got It', the market would have been up today. My suspicion is that the data reflects increased volumes of exported iron ore. We all know that prices or iron ore is falling and is very likely to continue to fall in the foreseeable future. Based on this it is likely that the 'growth' will be hit by the famous inverted hockey curve and fall off a cliff in the third quarter.

      Commenter
      Viking
      Location
      Sydney
      Date and time
      June 04, 2014, 1:11PM
    • There is mild general growth and even the amazing, shrinking manufacturing sector is not shrinking as fast (but still is). The figures have benefited from the rapid increase in mineral production as the mining construction boom is replaced by the production boom. But it's too soon to get excited. That production boom is gonna hurt prices per tonne and its anybody's guess how fast the Chinese economy is going to "rebalance" away from infrastructure and housing construction. Also, much of the profits are heading OS. As the construction phase winds down, the number of workers in mining is going to drop fast and they're going to head back to the cities where more are being dumped by a shrinking manufacturing sector.How much housing and infrastructure can help rebalance our economy is a big question. We'll be able to judge if the export boom is enough to offset all this in the coming year. FWIW, at this stage, I don't think so.

      Commenter
      Catch 22
      Location
      Date and time
      June 04, 2014, 1:14PM
    • @Got it, is that why the sharer market is being sold off despite the good GDP figures. The market is looking ahead at the wreckage this Budget will cause and acting accordingly. That GDP figure at 1.1% will be the last GDP at 1% or over for a long time.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 04, 2014, 1:15PM
  • ASX down 40 points yesterday and 22 today so 62 points down in two days. Based on growth from the ASX over the last 5 years we just lost over a half a years growth in two days. GDP good news market goes up 10 points for exactly 60 secs and when there is bad news market goes down all day. ASX Stuffed.

    Commenter
    Macca
    Location
    Sydney
    Date and time
    June 04, 2014, 11:56AM
    • use your knowledge to your advantage and make money, you are not using the knowledge base you have built up if you are not making money with this information you are sharing with us!

      Commenter
      pragmatist
      Location
      Date and time
      June 04, 2014, 12:50PM
  • Ok all you market gurus, it is obvious the high $AUD is affecting the strength of the Australian economy, what action should we take to bring it down to around $US0.80

    Commenter
    Xenaphon
    Location
    Date and time
    June 04, 2014, 11:56AM
    • increase rates

      Commenter
      d d
      Location
      Date and time
      June 04, 2014, 12:13PM
    • Reset the RBA inflation target band to 4-5% temporarily.

      Print money while keeping a close eye on inflation.

      Spend it on the building a proper NBN, fast rail, public transport upgrades, water infrastructure and paying down debt.

      Commenter
      Jimmy
      Location
      Date and time
      June 04, 2014, 12:17PM
    • Print money and lower the interest rates. We are being screwed by the Americans who are racing to the bottom. If we print money, that will also fix out debt problem that Hockey keeps on banging on about. Will also devalue the aussie dollar, which will then make car manufacturing/all manufacturing more profitable. Upside in that people will keep the jobs they have. Downside, will make overseas holidays more expensive and imports more expensive.

      Commenter
      sad clown
      Location
      melbourne
      Date and time
      June 04, 2014, 12:22PM
    • can't do much. Maybe destroy the economy, protest, burn buildings, coup, or spread the SMH around the world, or show Chris Bowen, Swan, Shorten more.

      Commenter
      Ben
      Date and time
      June 04, 2014, 12:55PM
    • what johnny said but use chinese companies and workers were possible.
      it worked for the yanks building a rail from west to east. you need value for money and with stralyan union controlled workers we have been wiped out. whats the pacific hwy costing. $40 million and a year per kilometer. unbelievable. it will then fall apart and require redoing within 5 years. china is talking about building a 13000km underwater rail line to the USA.
      they will have it done before we even half finish the pacific hwy.
      how can a country thrive with the worst roads rail and telephony in the developed world.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 1:12PM
    • knock the carry trade on the head.
      remove / reduce the govt guarantee for bank borrowings.
      then look at interest rates

      Commenter
      mushy
      Location
      Date and time
      June 04, 2014, 1:17PM
    • Conventionally the high dollar reflects (relatively) high Interest rates, low debt, a stable economy and good trade conditions and low inflation.

      We just have to stuff up one or more of those. Which would you pick?

      Commenter
      Peter
      Location
      Oz
      Date and time
      June 04, 2014, 1:18PM
    • Jawbone, Jawbone, Jawbone....

      Commenter
      me
      Location
      sydney
      Date and time
      June 04, 2014, 1:20PM
    • @smilingjack

      Actually, I think the proposed China-US rail line was to go via Russia and the Bearing Strait. A tunnel there would only need to be about 80-90km. Totally doable with off the shelf technology.

      Commenter
      Jimmy
      Location
      Date and time
      June 04, 2014, 1:27PM
    • In the long run the best way of keeping the currency competitive is to constantly run budget surpluses, in good times as well as bad times. The surplus is then invested in a gold and foreign currency reserve, strategic defence, and a sovereign fund that is only investing abroad (and as a benefit we can use the persuasion power that the ability to invest buys).

      The government should always look to favour work, child-bearing, saving & investment, industrial production, etc. over idleness and consumption. The government should always puncture any asset bubbles and always be ahead of the curve in planning and investing in spare capacity in infrastructure. The industrial policy should be aggressive, bordering on mercantilist. Policies should always favour the own ethnicity over foreigners. We need a government that doesn't ask where it wants to be now or in the next couple of years, but asks where we - as a people, as a civilisation - want to be in a hundred years. Short term paid should be endured for long term gain, power & glory.

      Does that answer your question?

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      June 04, 2014, 2:03PM
    • i think you nailed it doc

      Commenter
      naturopath
      Location
      Date and time
      June 04, 2014, 2:44PM
    • I am inclined to agree with most of what Dr No had to say with a couple of exceptions.

      Firstly, it is unrealistic and likely to be counterproductive to “…run budget surpluses in … bad times”. Surely the lesson of the great depression is that when private sector demand withdraws the government must, at the very least, keep spending, if not stimulate further. Keynesian economics may not be all powerful, but government spending can certainly have powerful effects at the margins.

      Secondly, I don’t see the Nationalist/Racial argument as being particularly strong. Why do we need to favour “child bearing” and “our own ethnicity”? We should have flexible immigration programs tailored to the needs of the country, importing people with the skills we need and in numbers that work to our benefit. Fairly treated people have never in history revolted. We don’t need to fear foreigners. But we do need to bring them into the tent, to give them a stake in society.

      But other than that I agree pretty much 100%, especially on infrastructure investment. The two main keys to sustainable economic growth are strong infrastructure investment and good quality public education. If we have that we should be able to build an economy that can be successful at any exchange rate.

      Commenter
      Jimmy
      Location
      Date and time
      June 04, 2014, 3:36PM
  • GDP - backward looking result - 1.4% of the 1.1% from iron ore before the fall...I feel like I'm stating a case for the bears when really I just want the shorts trampled to death. Stocks like ILU and DCG who have jumped on CEO's saying we are doing OK and quickly back into their sell pattern speaks to just 1 thing - shorts

    Commenter
    GK
    Location
    Date and time
    June 04, 2014, 11:54AM
    • boooooo to shorters driving everything with margin loans cant wait for the squeeze and the margin interest to mount up before being called away..........booooooo

      Commenter
      BooBoo
      Location
      The Bear
      Date and time
      June 04, 2014, 1:18PM
  • If LNP want a better form of advice, try reading the posts right here. on the SMH.....Only 3 years ago Gillard and Swan were on the tele telling us the mining boom's got generations to run....It was absurd.....Let's find out where they were getting that advice and see if the same clowns are in LNP's ear.

    Commenter
    JohnBB
    Location
    Date and time
    June 04, 2014, 11:53AM
    • with respect @JohnBB I think it is the last place the would look, you know wot i mean like...lol

      maybe they should look at what the Iron Lady did, that worked!

      Commenter
      craig
      Location
      Date and time
      June 04, 2014, 12:09PM
    • @craig...No it didn't Craig...They're going broke too.

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 1:06PM
    • @JohnBB, Stock market did well though while she was strutting her stuff and that is not a bad thing!

      Commenter
      craig
      Location
      Date and time
      June 04, 2014, 1:22PM
    • @craig..true.

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 1:49PM
  • Dear Eds, Your photo on cutbacks to perks at Rio Tinto and Kinross shows a pic of mince tarts, not meat pies.

    EDs: Ah yes, wrong pies. Thanks for the heads up.

    Commenter
    James_F
    Location
    Melbourne
    Date and time
    June 04, 2014, 11:39AM
  • So far on Sky Biz I've heard 5 different GDP set of figures. The market is already down 20 points so when the figure comes out officially how can anyone make sense of it. Will it be 0.7 or 0.8 or 0.9 or 1.0 or 1.1. No one knows . So it's 1.1% are we going to get our 20 points back. I don't think so;

    Commenter
    Goldfinger
    Location
    Sydney
    Date and time
    June 04, 2014, 11:32AM
    • @Goldfinger...Why would you believe any numbers a dept of gov brings out?.....Read the anecdotal numbers that add up to be your expenses, lifestyle, friends whinging, shops shutting, budget emergency, debt, etc and then think about all the money that's NOT being spent to catch up to population growth...Then think about where the money will come from to sustain it all...Where? Where's our next boom to equal the mining boom and more?....Far better indicators of what's going on...We're going broke.

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 12:04PM
  • QAN shares shed nearly 3% when overall Aussie market is down 0.35%.
    QAN was heading north when the CEO is MIA.
    Looks like when AL makes a statement, the shares dip.
    Either it's my imagination or coincidence.
    Only way to prove this is for AL to hint about his departure and watch QAN share rises.

    Commenter
    Is IT?
    Location
    Date and time
    June 04, 2014, 11:30AM
  • "Shares in iconic surf brand Quiksilver fell a whopping 41 per cent overnight"

    Rosy earnings forecasts can disappear overnight it seems.

    Clothes made for $1 per item and sold for $30/item is a business model that can't last.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 11:24AM
    • gen y are getting old fat and bald now and with those monster mortgages over their heads and mega apple contracts locked in cant afford "label" clothes anymore.
      hello k / wal mart.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 11:32AM
    • Incorrect. A 30 year old seen wearing surf wear would be instantly labelled a welfare receipient as surf wear never evolved with the greater market to align with euro standards of dress i.e plain clothing, plain colours minus the heavily branded almost childish slogan self serving propaganda laden clothing. People move on surf wear had its place. by the beach selling board shorts and singlets, should have stayed there. There was never going to be a happy ending moving stores to places like the UAE, ridiculous is being kind!

      Commenter
      Quicksilver stamp
      Location
      used to be cool
      Date and time
      June 04, 2014, 11:42AM
    • @Allan, Quicksilver may have been "iconic" back in the day...trends have changed and Quicksilver is just daggy now, the surf culture that was around in the '90s is gone, its not dudes with surfboards anymore its now hipsters with "fixies"...im guessing you dont know what a fixie is...

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 11:46AM
    • You guessed wrong and you missed the point of the comment completely. The point is people didn't suddenly stop wearing surf gear yesterday.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 12:24PM
    • A mate of mine asked me what I thought about Billabong about 1999 I think...I said I wouldn't touch it, it's fickle; if Slater says they're not cool, they'd crash overnight.....I was right....eventually....

      Very luckily we both made a heap of money from a share I stumbled upon....Pure luck.

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 12:29PM
    • Everybody followed Tony and bought budgie smugglers instead. You know the saying 'let the trend be your friend .. '.

      Commenter
      Viking
      Location
      Sydney
      Date and time
      June 04, 2014, 1:28PM
  • There's a bit of a sell off happening out there, Did someone leak the what must be poorer than expected GDP numbers early?!?

    Commenter
    JJ
    Location
    NSW
    Date and time
    June 04, 2014, 11:05AM
    • Probably a good GDP print, will mean less deficit spending in AUS, hence lower asset prices I guess (and also more potential for rate increases)....

      Commenter
      Bye Bye Fiat Money
      Location
      Date and time
      June 04, 2014, 11:28AM
  • clueless on why MRM is not finding love... any news that I am unaware of ?
    Testing my patience, will have to sell if it breaks $2.00 !!

    Commenter
    clueless
    Location
    wonderland
    Date and time
    June 04, 2014, 11:02AM
    • just looking at the chart i would hope they are not a recent aquisition

      Commenter
      chartist
      Location
      Date and time
      June 04, 2014, 11:22AM
    • SOLD... I am sure it will rebound now !!
      Chartist, they arent a new acquisition but made a new acquisition in April which should actually help the business !!
      Anyways, will revisit again...

      Commenter
      clueless
      Location
      wonderland
      Date and time
      June 04, 2014, 12:18PM
  • "“I think we’re going to have a very difficult time adapting to the decline in living standards that’s going to be a necessary part of the adjustment to the end of phase one and two of the boom,”"

    Must be talking about a serious decline then huh?

    http://www.afr.com/p/national/brace_for_falling_living_standards_flu2oHFYGZsmYCPZhOzKDJ

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 10:57AM
  • "Up to 65,000 university students - 30 per cent of graduates - will be jobless four months after finishing their studies, and those finding employment will be earning less, the federal government has forecast."

    Housing boom!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 10:51AM
    • Now they need to work on 'trade' costs. Charging out a barely qualified electrician at $80/hr... what a joke.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 12:09PM
    • OK, nothing stops you parrotting your housing boom! mantra, not even being exposed this week for a sham.

      To summarise, you believe a property bubble can exist for 20 years, grow at slightly above the inflation rate, and still be described with a straight face as a bubble. Bubbles burst, and quick, and if they don't, they're not bubbles.

      When asked to provide any similar example in economics history of such a bubble, you pointed to Japan. When advised that Japan's property bubble popped in 1991 after only 5 years, you resorted to goobledegook and bunkum. You dumped heavily on the evils of 'little landlords' but admitted you'd be one if only prices were 30-40% lower. When told this could only occur if Australia entered a deep recession, you claimed Australia was already in a recession. You claimed you 'picked the peak of property in 2011' despite property having continued to rise until this quarter.

      I've debunked you, but I know you'll keep popping up with cherry-picked snippets of info followed by 'housing boom!'. The fact that the fundamentals for either a boom or crash don't exist and won't exist anytime soon won't stop you. You love your stream of half-informed commentary too much.

      Commenter
      guy
      Location
      Pymble
      Date and time
      June 04, 2014, 12:41PM
    • Wow, love it Guy, very well said!

      Commenter
      Irish Phil
      Location
      Date and time
      June 04, 2014, 1:10PM
    • Nope. Japan's property bubble began in 1985 and peaked in 1990 and it has been deflating ever since.

      And nope, will never be a littlelandlord who thinks they're going to get rich by never ending capital gains when I am actually making losses.

      And nope, property has not continued to rise in real terms.

      So you see, not debunked at all.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 1:11PM
    • Nope. Japan's property bubble popped in 1991. But that is only one of your many errors requiring correction. It's been a labour of love and one I don't have endless time and patience for.

      Commenter
      guy
      Location
      Pymble
      Date and time
      June 04, 2014, 2:20PM
    • Nope. The index dropped by two thirds over 14 years and then flat lined but kept dropping in real terms.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 3:51PM
  • What happened to "good china data up she goes"?

    Commenter
    Allan
    Location
    Prahran
    Date and time
    June 04, 2014, 10:48AM
  • So mining exports are tipped to give GDP a boost. That would be fine but for the fact that most of the companies involved are international and quite capable of shifting profits off-shore to the detriment of our Budget by way of taxes not collected. Where's a good MRRT when you need one. Oh, that's right, it's going to be abolished while pensioners and those on low incomes pick up the tab.

    Commenter
    mitch of ACT
    Location
    Date and time
    June 04, 2014, 10:40AM
    • Ive been going through the local papers from the mid north coast. lake macquairie / great lakes / taree / gloucester and they are all reporting the multi millions in hand outs they had factored in have disappeared and all are after mega rate increases. then factor in that I think the nsw gov subsidises local councils for pensioner rates which have gone.the house of cards is collapsing. the only thing that will prop them up is allowing developers to come in and do big projects that supply infrastructure like roads sewer water parks and now schools have to be factored in. the days of a baby bomer or their parents coming in and clearing 100 acres and flogging it off for squillions are gone.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 11:36AM
  • Europe DOWN. US DOWN. SPI UP 10! Anyone who believed this is just nuts!

    Commenter
    Gumly
    Location
    Mackay
    Date and time
    June 04, 2014, 10:25AM
  • So if China and Europe are coming to join the U.S and U.K money printing party .......

    Will the U.S be able to taper ?

    Won't it become a race to the stimulatory bottom of the crap pile of international currency debasement?

    What's that going to do for Gold?

    Will KCN, SBM, and SLR go bust in the next year? Seems their financial positions are becoming more precarious by the day as each $ falls off the price of a Troy ounce.

    Commenter
    Joe the POM
    Location
    Geelong
    Date and time
    June 04, 2014, 10:23AM
    • looks like a giant game of who blinks first with the bankers running the show making themselves richer and taking the rest of the world down. so whats new there.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 10:43AM
    • that us taper reeks of smoke n mirrors to me.
      A major bidder has reduced buying but yields are down.
      pfft yeah right.

      Commenter
      mushroom
      Location
      Date and time
      June 04, 2014, 10:59AM
  • Investors are poised to push shares higher at open ahead of GDP data this morning, while Wall St slipped from record highs overnight.

    The value in that headline didn't t last very long !!

    Commenter
    Joe the POM
    Location
    Geelong
    Date and time
    June 04, 2014, 10:18AM
  • ASIC under the spotlight again for all the wrong reasons...re the LM investments debacle. Looking into things further i can see the need for not only focus on the actual case in question,but going by the "gravy train" produced for all those vultures sitting on the tree surrounding the carcass. Clarification as to why 4 insolvency firms all dip their toes in and take a fat chunk shows the whole process leads to more and more erosion of confidence. Surely the same process involving tendering and accountability for results would mean whoever overseas the process should be pending outcomes for payments that are justified. I cant see alot of transparency but admittedly i don't follow through on the paper trail or FOI if available. Would be very unfortunate for our global image to see all this unfold not only without results for those burned but the complete vaporization of ethics by the legal teams to grab a slice of pie.
    Another example of a bad feather in our business role model cap template there. @harryrogers.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    June 04, 2014, 10:12AM
    • As log as I have been in business the receivers and liquidators were always known as "cowboys" . I mean everybody in teh accounting and legal profession knows its but they all benefit from it.

      Pure and simple greed and I don't suspect anybody will change the laws or rules because as one commentator on this blog told me that you are a "mug" if you don't take advantage of the rules.

      Some people just have a strange idea of success!

      Commenter
      BSB
      Location
      Date and time
      June 04, 2014, 1:17PM
    • funny irony huh
      get taught law and ethics then go out into the business world and get shown....no moral code,no ethics just get in there and get it!
      seems not a focus of ASIC as they consider them on their side?....for some reason
      its a cartel.i might follow this one through a bit more myself.

      Commenter
      BearshapedBull
      Location
      Mugpunters Lounge
      Date and time
      June 04, 2014, 1:58PM
    • Sorry I incorrectly put "BSB" as poster. All my fault

      Commenter
      Harry Rogers
      Location
      Date and time
      June 04, 2014, 2:52PM
  • The best thing Sydney could do right now is to build a Metro this would ensure future property prices would be balanced and a large reduction in frustration as no need to take the car to work.

    Commenter
    Viking
    Location
    Sydney
    Date and time
    June 04, 2014, 10:00AM
    • Nooooo billions of dollars need to be spent building more roads.. roads and more roads.. with all the roads we can build with billions of dollars all out transport problems will be fixed.. in fact the billions of dollars being spent on roads will employ all those good for nothing Uni graduates .. pushing a shovel instead of using their very expensive educations.. indeed it will even boost property prices in places like the inner suburbs for those who no longer want to drive but will walk to work instead.

      Commenter
      Lean Too
      Location
      Date and time
      June 04, 2014, 10:19AM
    • @Lean, No, all those jobs on the roads will go to unskilled labourers on 457s and the roads will probably be built by o/seas companies. That infrastructure program is a golden opportunity to provide local jobs but this gov't just isn't interested in jobs for locals with the car industry as a classic case in point.

      Commenter
      mitch of ACT
      Location
      Date and time
      June 04, 2014, 11:36AM
  • Said a few months ago QBE was rubbish. Just a cork in the ocean now. If your growth model was undercutting your international rivals by under pricing climate change risk, reality will eventually hit you in the face. The management of today is being blamed but the reality was they were lucky to get as big as they did before the fertiliser hit the fan on multiple fronts.

    Anybody with an opinion on LYC?

    Commenter
    Catch 22
    Location
    Date and time
    June 04, 2014, 9:58AM
    • The APNZ part of the business is showing a really nice Net Combined Operating Ratio.
      Your view seems a bit negative to me.
      Natural Hazards also benign in Australia and weather forecasts support continued strength there for 3-4 years.

      Commenter
      Irish Phil
      Location
      Date and time
      June 04, 2014, 10:20AM
    • IMO - SP gyrations will proceed oblivion. Too much debt.

      Commenter
      YIn or yang
      Location
      Date and time
      June 04, 2014, 10:46AM
  • They speak of unemployed uni graduates, but nothing on the numbers actually getting jobs for which they are qualified. In Queensland, only 1 in 10 teaching/education graduates is actually employed as a teacher. That's just 10%. Where are the others employed? GG.

    Commenter
    Gordon Gekko
    Location
    Greg Coffey World
    Date and time
    June 04, 2014, 9:54AM
    • Best educated barristas and trolley pushers in the world mate. And they wonder why less educated kids are giving up on looking for jobs?

      Commenter
      Catch 22
      Location
      Date and time
      June 04, 2014, 10:15AM
    • Have you looked at the long range demographic models?
      We are going to have a SHORTAGE of new entrants to the job market within 10 years as Baby Boomers retire.
      The big firms in the city are fighting hard to attract the best graduates. I should know, I sat in our all our graduate recruitment centres and I work for a company that employs 15,000 Australians.

      Commenter
      Irish Phil
      Location
      Date and time
      June 04, 2014, 10:22AM
    • Thanks for the reply on LYC. As for the demographics, well, I file that under crystal ball prophecies and ageing scaremongering. A lot of jobs are going to extinguished by robotic and expert systems in the next couple of decades. The third world is also a bottomless source of grads. Top companies will always fight hard for the top grads unless there is an out and out depression.

      Commenter
      Catch 22
      Location
      Date and time
      June 04, 2014, 10:42AM
    • the word got out it was the highest paying cushiest job for little education with 16 weeks annual leave so everyone jumped on board. people from other fields were jumping on board. I know lawyers who bailed sick of working 10 hour days wearing expensive suits and ties to become sandal wearing teachers doing 6 hour days.
      And seriously who is going to hire a teacher outside the school system? I dont know of a single teacher that could or has left the education system.
      no we have a glut of grads with useless teaching degrees.

      Commenter
      smilingjack
      Location
      Date and time
      June 04, 2014, 10:50AM
    • the shortage of teachers are science and Maths teachers which is hard to do.

      Commenter
      will
      Location
      melb
      Date and time
      June 04, 2014, 11:00AM
    • No we won't have any shortage of workers. More and more work is off-shored, computerised or done by robots. Massive immigration is good for property developers and their mates.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 1:47PM
  • ..."Optimism on GDP"....

    It's all fake. Of course GDP rises with 500k bringing money in every 13 months..(it's also why the AUD is persistently high....Then what? What do we do when that's not an option? Per capita GDP is going backwards. Our lifestyles are in reverse while our nations wealth is being shared with more and more and more people. Not even mentioning the hundreds of billions in infrastructure arrears. Resign LNP, you've not only failed to realise the mess you and those other idiots have caused, you want more of the same.

    Commenter
    JohnBB
    Location
    Date and time
    June 04, 2014, 9:42AM
    • Where is GDP per capita going backwards John? from 1999 to 2011 every year GDP per capita in Australia increased with the exception of 2011 where it went down $200.....your misinformation is just that....
      http://www.indexmundi.com/g/g.aspx?c=as&v=67

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 10:21AM
    • Read your own data wwwish...22,200 23,200 27,000 29,000 30,700 31,600 33,300 37,300 38,100 39,900 41,000 40,800....

      peaked 2010.... now declining...Australians going broke and it will compound...

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 10:34AM
    • Nope. GDP per capita has been trending down since 1993 when net overseas migration started ramping up.

      http://www.abc.net.au/news/linkableblob/3873334/data/jericho-gdp-per-capita-growth-data.jpg

      http://blog.rpdata.com/wp-content/uploads/2011/06/Net-overseas-migration.jpg

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 10:55AM
    • @JohnBB, one year does not make a trend and anyway RBA says it has been growing every year..
      http://www.rba.gov.au/chart-pack/au-gdp-growth.html
      Data trumps hearsay

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 11:33AM
    • Not when the data are made up a complete fabrication of the situation. GDP is surviving because we're going backwards in every way in a valiant attempt to hold ity up. What about all the money that needs to be spent on infrastructure, pensions, health care, su to Pservts? $Trillion all up? Where's that coming from?

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 11:46AM
    • Yeah it's growing to a massive zero percent per capita. Hurrah!

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 12:07PM
    • Whoopee 0.5% GDP per capita growth last year and the economy is worse now. With the deflationary effects of the budget it is now zero or negative.

      Meanwhile 457 visa workers are flooding in and if Gina has her way their wages will fall.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 12:19PM
    • GDP data is completly made up, yet you know the real numbers? The ABS must be trying to recuit you daily, or alternatively assinate you for knowing the truth in this GDP conspiracy....

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 12:50PM
    • @Wwwish...The numbers might be right but they're from fabricated sources...i.e. fake economy, entirely unsustainable just like all the other western countries we fail to learn from...In addition, they don't want the real numbers...That's the bit you're not getting. They know exactly what they're doing...Extracting Australia's wealth and handing it to big business while they live very well for the rest of their selfish lives,l remembered as a great servant of the public...

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 1:11PM
    • I'm with you on this wwwish. Allan seems once again to be just reading information however it suits him. GDP/capita hasn't been trending down at all (best you could say is the rate of growth has slowed).
      Google "gdp per capita australia" and you get a neat graph showing its rapid increase through to 2013.

      Commenter
      Peter
      Location
      Oz
      Date and time
      June 04, 2014, 1:42PM
    • @peter...."(best you could say is the rate of growth has slowed)."...

      How about saying "increasing at a decreasing rate"?

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 2:39PM
    • @JohnBB, yes increasing, despite your initial comment you wont acknowledge was factually incorrect

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 3:01PM
    • @Wwwish...You're a stickler..

      I'm interested in what you asked Liberator too..I think any gain can be offset against any loss. I've got some old cap loss from the GFC I want to offset against a small development I'm doing.....Anyone know?

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 3:28PM
    • 0.5% is a rapid increase? Don't think so.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      June 04, 2014, 3:54PM
  • Lexington the postcard perfect American town where the infamous Charles Ponzi' mansion is now for sale.
    That would be the "house of cards" of the left as you drive through..hehehe.

    Commenter
    BearshapedBull
    Location
    Mugpunters Lounge
    Date and time
    June 04, 2014, 9:36AM
  • Uni fees to double, can't get a job. Stuck in traffic, population increasing at 500k/13months. Budget in red, all assets sold. Where's the plan? We need a plan. We need an emergency discussion. $7 doctors visit's not going to fix what 30 years of incompetence, self satisfaction, corruption and jobs for the boys has caused.

    Commenter
    JohnBB
    Location
    Date and time
    June 04, 2014, 9:27AM
    • Trouble is any plan involves change, and any change involves winners and losers, and any losers means opposition and any opposition tends to mean the status quo wins out (The stakeholder's and the nation's response to the Mining Tax was a great example of this process in action)
      Change really only occurs when things get properly bad. At the moment things are just irritating.

      Commenter
      Peter
      Location
      Oz
      Date and time
      June 04, 2014, 10:37AM
    • I agree labor have been terrible for this country.

      Commenter
      Joe
      Location
      Hockey
      Date and time
      June 04, 2014, 11:23AM
  • http://www.smh.com.au/nsw/life-in-the-slow-lane-midweek-traffic-the-worst-for-sydney-drivers-20140603-39h1p.html

    See the guy in the little black Corolla in the left lane.....Late for work. Cost him a couple of hundred dollar, his employer a few hundred and Australia a few thousand. Resign State and federal LNP...You are failing us all.

    Commenter
    JohnBB
    Location
    Date and time
    June 04, 2014, 9:22AM
    • Actually John he was going to pick up his drugs for the day because he doesnt work and is happy with it that way....we can both make up stories

      Commenter
      Wwwish Lion
      Location
      Melbourne
      Date and time
      June 04, 2014, 10:25AM
    • Maybe John knows so much about it because it was him in the little black car

      Commenter
      confused
      Location
      Date and time
      June 04, 2014, 11:16AM
    • Black Corolla driver might need to get out of bed earlier like the rest of us Sydney traffic sufferers.

      Commenter
      DR
      Location
      syd
      Date and time
      June 04, 2014, 11:39AM
    • There's a bus stop 100m from that pic...When the bus stops, it sops all traffic turning left which in turn stops all traffic going forward, which in turn.....

      I've written to the RTA...The left hand doesn't know what the right's doing, which doesn't know what the bus is doing, which....Like I said. Resign LNP. Our governments and departments are so incompetent is any of this any surprise?

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 11:50AM
    • @confused...No, I know him...It's my broker...That's why I'm not making any money atm...He's stuck in fkngtraffic.

      Commenter
      JohnBB
      Location
      Date and time
      June 04, 2014, 11:59AM
    • Cmon John keep it real! I can agree with some of your other posts!

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      June 04, 2014, 3:49PM
  • "Local stocks are poised to open flat ahead of GDP date this morning"

    "Investors are poised to push shares higher at open ahead of GDP data this morning"

    So which is it?

    EDs: Flattish to up? Futures says 10 points. Chrs

    Commenter
    Peter
    Location
    Oz
    Date and time
    June 04, 2014, 9:19AM
    • Or perhaps down, as it turned out
      This stock market thingy would be so much easier to manage if it met our sensible expectations more often. :o)

      Commenter
      Peter
      Location
      Oz
      Date and time
      June 04, 2014, 10:32AM
    • It's the ASX. It means DOWN

      Commenter
      Goldfinger
      Location
      Sydney
      Date and time
      June 04, 2014, 10:38AM
    • FLAT BOTTOM

      Commenter
      dunno
      Location
      Date and time
      June 04, 2014, 10:53AM
    • FLAT BOTTOMED GIRLS YOU MAKE THE ROCKIN WORLD GO ROUND.

      Queen wasn't it?

      Commenter
      Joe the POM
      Location
      Geelong
      Date and time
      June 04, 2014, 11:07AM
Comments are now closed