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Markets Live: Stocks fight back

Date

ASX scrapes back into black after dovish RBA minutes, but investors remain cautious ahead of a Fed meeting that will decide over the US central bank's stimulus.

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That's all from us here at Markets Live for today, we hope you had as much fun as we did.

Click here for a full wrap of the day's session

Iron ore miner Fortescue Metals Group will start reducing its $12 billion in debt from November.

The first step in its debt reduction program will be the early repayment of what it says is its most expensive debt - $140 million in preference shares.

Fortescue, now the world’s fourth largest iron ore miner, issued the high interest debt as part of its original financing in 2008.

Fortescue refinanced its debt a year ago when iron ore prices plunged to near unprofitable levels, creating a potential liquidity crisis.

Prices have since recovered and are currently high at above $US130 a tonne.

Fortescue shares rose 0.9 per cent to $4.62.

Here are the biggest winners and losers from the ASX200 today:

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The dollar is buying 93.20 US cents, trading pretty much where it was this morning after some swings in the wake of the RBA minutes.

Investors were looking for some clarity after the omission of the ‘scope to ease’ phrase in the last statement, IG’s Stan Shamu says:

  • However, the minutes were as neutral as possible and it’s actually interesting to note that most of the price moves in AUD/USD actually occurred before the minutes were released.
  • Fears that the minutes wouldn't be as hawkish as the market initially interpreted resulted in a bout of profit-taking in the pair today heading into the minutes.
  • Overall though, the pair has been stuck in a range 0.925 to 0.94 for a week or so and we feel this range might hold heading into the Fed meeting.

The market has closed flat, with the benchmark S&P/ASX200 adding just 3.2 points, or 0.1 per cent, to 5251.2. The broader All Ords rose 3.5 points, or 0.1 per cent, to 5245.2.

The Reserve Bank said it will closely monitor the increasingly popular strategy of borrowing to invest in real estate through a self-managed super fund.

It was only a small mention in the Reserve Bank of Australia's minutes of its interest rate policy meeting, but it shows the concerns have reached the top table of our financial system.

The minutes reveal the bank believes some households could be starting to take some risks with their finances.

The benefits of self-managed funds are being advertised heavily on prime-time TV, radio and on the internet. These self-managed fund "administrators", many of whom are owned by the big financial services players, are appealing to investors who want to take control of their retirement savings.

There are many legitimate reasons for the growth in number of self managed funds to almost 500,000 from less than half of that number 10 years ago. But there are not for everyone.

The advertising blitz is increasing awareness of self-managed funds among the general population. And it is making the ground much more fertile for the property spruikers.

Read more

The Reserve Bank may appear to be sitting on the fence in regards to its easing cycle, but HSBC chief economist Paul Bloxham believes its easing cycle is over.

Bloxham says there are two key forces working in opposite directions that would prevent a further cut – the high Australian dollar and the beginnings of a housing boom.

- Today's minutes suggest the RBA is comfortable for now and very much in 'wait and see' mode.

- The Aussie has rallied in recent weeks, which could make the RBA uncomfortable, particularly as they seemed to have been hoping it would do more work for them. They noted in the minutes that 'some further decline in the exchange rate would be helpful'.

- But working against the case for another rate cut is the ongoing pick-up in the housing market. While this is not yet a concern, with the RBA noting that 'banks' asset performance and funding structures continued to improve', they did note that 'in the current environment of low interest rates and slow credit growth, members agreed that it was especially important that banks maintained prudent lending standards'.

- While they have scope to cut further, our central case remains that they are unlikely to do so.

TPG Telecom will rollout fibre-optic cables to half a million apartments in Australia as the company seeks to take advantage of the change in broadband policy under the new Coalition government.

The company will extend its existing fibre networks to basements of apartments in major capital cities, promising to deliver NBN-like internet speed of 100 megabits per second.  

The Coalition’s broadband policy encourages internet services providers such as TPG to invest in infrastructure to speed up the delivery of broadband to households.

TPG’s foray into fibre network came as it reported a net profit of $149.2 million for the financial year ended July 31, up 64 per cent from the previous year.

TPG shares are up 13 per cent to $4.18.

Eiji Toyoda, who helped steer Toyota’s global rise and pioneered the automaker's vaunted production system, died today, the Japanese automaker said. He was 100.

Toyoda, cousin of the automaker's founder, died of heart failure in Toyota City, the company said in a statement.

A taciturn engineer, Toyoda served as president between 1967 and 1982. He was chairman until 1994 and remained an honorary advisor at Toyota up until the time of his death.

Over his career, Toyoda presided over Toyota's rise in the US market from the launch of the Corolla in the late 1960s to the decision to begin making cars in the United States in the late 1980s.

Toyoda was also instrumental in developing what became the automaker's much-imitated method of producing cars with as little waste as possible and continual quality improvements, a system that became known as the "Toyota Way".

Has Ben Bernanke delivered a modern version of the Maradona effect? the FT asks:

It may help to explain how the Federal Reserve chairman has managed to tighten US financial conditions by more than 100 basis points without touching the Fed funds rate.

The analogy, first applied to monetary policy by Sir Mervyn King, former Bank of England governor, refers to the ability of famed Argentine footballer Diego Maradona to clear a path to goal by wrongfooting opposing players as they tried to anticipate his next move.

The bond market may not have been wrongfooted by Mr Bernanke’s swerve if it had paid better attention to what he said in March this year.

We are used to thinking of his May 22 comments on the phasing out of US quantitative easing as this year’s key event for financial markets. It marked the start of the sell-off in US Treasuries, which contributed to big ructions in many emerging markets.

But it was the earlier speech that provided some clues. Speaking about long-term interest rates on March 1, Mr Bernanke mentioned the phrase “term premium” no less than 28 times.

Diego Maradona torments England defenders during the World Cup quarter-final in 1986.

Diego Maradona torments England defenders during the World Cup quarter-final in 1986. Photo: Getty Images

Gold markets appear to still be undecided about the fate of the US Fed’s stimulus program, despite the central bank’s policy meeting beginning within hours.

The precious metal has swung between gains and losses, hovering just above a five-week low, as investors weighed the outlook for $US85 billion a month program.

Gold has plunged 21 per cent this year as investors lost faith in the metal as a store of value amid an equity rally and on speculation that the Fed may slow the pace of its bond-purchase program.

‘‘Everyone is just holding their breath about what is going to happen in the US tonight,’’ Baillieu Holst equity partner Richard Morrow said.

‘Larry Summers pulling out the the race for the Fed chairman ship has wrong-footed a few players.’’

Spot gold had risen 0.03 per cent to $US1313.76 an ounce, after falling 1 per cent in the previous
session to a five-week low of $US1303.85.

The Fed is widely tipped to start trimming monthly purchases by $US10 billion to $75 billion, after its meeting, according to a Bloomberg survey.

Fed policy makers were “broadly comfortable” with Fed chairman Ben Bernanke’s plan to start reducing purchases if the economy improves, minutes of their July meeting showed.

Bullion rose 70 per cent from December 2008 to June 2011 as the US central bank pumped more than $US2 trillion into the financial system by buying debt.

If we look at the biggest losers for the day, below, gold miners have been hit the hardest.

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Australia has boosted its projection for live cattle exports by 25 per cent, after key market Indonesia abandoned a quota system.

Australia, the world's third-biggest beef exporter, relies heavily on Indonesian demand, and had been hit hard by the tightening of quotas in its largest live cattle market in 2012 and 2013.

The Australian Bureau of Agriculture and Resource Economics and Sciences said in a report on Tuesday that total live exports would stand at 590,000 head of cattle in the 2013-14 season that begins in October, up from the 470,000 touted earlier.

"You'd expect that (Indonesia) would take more than half of the total live cattle exports - so at least 300,000 head of cattle is the least I would expect," ABARES chief economist Paul Morris told Reuters.

Indonesia aborted its quota system in July, allowing the unlimited importation of live cattle in an effort to curb domestic beef prices.

Strong growth in Indonesian demand will offer a helping hand to Australian cattle farmers, who have also been hurt by arid weather.

Without just over an hour and a half to go in local trade, here's how the rest of the region is looking:

  • Nikkei: -0.2%
  • Shanghai: -0.9%
  • Taiwan: -0.4%
  • South Korea: -0.6%
  • Singapore: +0.2%
  • New Zealand: -0.1%

Not everyone is impressed by the RBA's warning shot at banks to uphold lending standards:

The Reserve Bank has sent banks a clear message not to lower lending standards, saying it is "especially important" lenders behave cautiously while official interest rates are at historic lows.

Minutes from this month's board meeting show members were briefed on the bank's half-yearly check-up of the financial system, due to be published next week.

While it said Australia's banking system was in a "relatively sound position" and lenders were more profitable than those overseas, it also noted risks posed by very cheap credit.

"In the current environment of low interest rates and slow credit growth, members agreed that it was especially important that banks maintained prudent lending standards," said the minutes.

The minutes also reveal the Reserve is keeping a close eye on the growing number of people borrowing to buy property within self-managed super funds.

Read more

International merchandise imports rose in August as more consumption goods were brought in, while imports for the previous month were revised up sharply in a possible sign of improving domestic demand.

Imports on a seasonally adjusted balance of payments basis rose by 1 per cent in August to $22.58 billion, the ABS says. That came on top of a strong July where imports were revised up to $22.3 billion, from an initial $21.45 billion.

The breakdown for August showed imports of consumption goods climbed 5 per cent, or $309 million, driven mainly by cars and beverages.

At an Australian Business Economists lunch in Sydney today, economists Warren Hogan and Stephen Halmarick talked about the possible future chairman of the US Federal Reserve.

Hogan said there was a “big sigh of relief across the world” when Larry Summers pulled out of the running. This got a laugh from the audience.

He said Summers has a high IQ, “but a low EQ, as far as I understand,” and this was the reason why market participants didn’t want him to get the job.

Stephen Halmarick, First Colonial State, said Janet Yellen was obviously the “best candidate,” and it worried him that Don Cone’s name had popped up in the media in the last 24 hours because it’s a sign that some in Washington don’t want Yellen to get the role, especially because she’s not a Washington insider (she’s comes from San Francisco.)

Hogan agreed with this sentiment.

'This looks like to me like 2007 all over again, but even worse': William White.

'This looks like to me like 2007 all over again, but even worse': William White. Photo: Supplied

The Swiss-based 'bank of central banks' says a global hunt for yield is luring investors en masse into high-risk instruments, "a phenomenon reminiscent of exuberance prior to the global financial crisis".

This is happening just as the US Federal Reserve prepares to wind down stimulus and starts to drain dollar liquidity from global markets, an inflexion point that is fraught with danger and could go badly wrong.

"This looks like to me like 2007 all over again, but even worse," says William White, the Bank for International Settlement's former chief economist, famous for flagging the wild behaviour in the debt markets before the global storm hit in 2008.

"All the previous imbalances are still there. Total public and private debt levels are 30 per cent higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle," says White, now chairman of the OECD's Economic Development and Review Committee.

Read more

Qantas has flagged a ‘‘review’’ of its aircraft maintenance work at Avalon, triggering union fears that up to 300 remaining engineering jobs may be made redundant.

The Australian Workers Union (AWU) says the announced operations review is code for closure and flags another move towards offshoring.

AWU Victorian secretary Ben Davis says the future of Avalon looked bleak for the 300 maintenance engineers employed there.

‘‘We know from experience that when Qantas does a review, jobs go,’’ Mr Davis said.

The review follows 263 redundancies at Avalon announced in November last year and the closure of the Tullamarine heavy maintenance facility with the loss of 422 jobs.

But Qantas is stressing that no final decision has been made as the review at Avalon begins.

With shares in CBA, Westpac and ANZ closing in on their record highs of earlier this year, the debate about whether the lenders' stocks are in bubble territory appears to be resurfacing.

Bank of America Merrill Lynch chief global equities strategist Michael Hartnett this week pointed out some hedge funds are betting on share price falls by going "short" on the big four.

However, the official numbers show there are fewer short sellers on the banks' registers today compared with a few months ago.

On the register of Westpac - the most heavily shorted big bank - short positions have fallen to 0.72 per cent of its shares on issue from 0.97 per cent in July.

Short positions against Commonwealth Bank have have fallen from 0.7 per cent to 0.55 per cent, while ANZ's short positions have dropped from 0.49 per cent to 0.29 per cent and NAB's are 0.23 per cent.

Leaving domestic politics aside, the global economic headlines last month seemed to be painting a world of continuing crises and substandard growth. As far as our world was concerned though, those headlines were misleading, writes BusinessDay’s Michael Pascoe.

The latest Reserve Bank board minutes start with a much more sanguine view of our trading partners' performance than that portrayed in the popular media:

"Overall, growth of Australia's major trading partners in the June quarter was around its average of the past decade and recent indicators suggested that this pace of growth had continued. The Chinese economy was growing at around the pace evident since the start of the year, and members noted that indications were that GDP growth was likely to remain close to the authorities' target of 7.5 per cent over the remainder of the year."

So the parts of the world that matter most to us are running at about their average speed, booms and Great Recessions notwithstanding. You could be forgiven for having missed that as the China bears and sundry alarmists tend to receive much more coverage than the underlying figures. And this month's RBA board meeting was before the latest clutch of stronger Chinese statistics.

Yes, the capital outflow issue for some emerging markets was noted, especially India, Indonesia, Turkey and Brazil, but even that might not be as bad as some portrayed

Read more

Billionaire businessman and retail mogul Solomon Lew believes the former Gillard-Rudd governments were ‘‘inept’’ in their handling of the mining boom and ‘‘bummed’’ their way through the good times to the great detriment of the nation’s retail sector.

The comments are some of the strongest aimed at the outgoing ALP government by any Australian business leader.

Mr Lew, who is chairman of fashion retail group Premier Investments and a former Reserve Bank board member, said the ALP federal government had left a poor legacy with even the best retailers suffering.

‘‘I think the legacy of the former government in its inept handling of the mining boom at the expense of the non-resource sectors continue to impact on retail given the employment numbers last week, the continued strength of the Australian dollar and the fragility of consumer confidence,’’ Mr Lew said. 

What are your thoughts? Is Solomon Lew right? Or has Australian retail failed to adapt to a changing world?

Read more

Regis Resources has more than doubled its full year profit, on boosted gold sales amid higher prices.

The Perth-based gold miner increased profit after tax for the year to June 30 to $145.73, up from $68.24 million in the previous year. Gold sales more than doubled to 253 ounces, from 107 ounces during the same period. That helped to boost gold sales revenue by $245.8 million to $416.1 million.

The average sale price increased to $1599 per ounce, up from $1574 per ounce. However, the cash cost of production rose 10 per cent in the full year due to cost increases at the company’s Moolart Well operation.

Regis declared a maiden dividend of 15 cents per share, fully franked.

Shares still plunged 6 per cent, also pressured by another drop in the gold price overnight.

Sales of new motor vehicles bounced in August after a sharp drop the previous month, with demand for sports utility vehicles staying healthy.

Figures from the ABS show new vehicle sales rose 0.8 per cent to a seasonally adjusted 94,396 in August, from 93,633 in July. Sales had been volatile the previous two months, first jumping 3.6 per cent in June only to fall by the same amount in July.

Annual growth in sales slowed further, with sales up a slight 0.2 per cent on August last year.

Demand may have been impacted in August by a proposal by the then Labor government to end a tax break for some car buyers. The Coalition government has promised to dump the plan.

Sales of passenger vehicles increased by 2.1 per cent in August, while those for sports utilities rose 2.9 per cent and were up over 6 per cent on the year.

Earlier this month, the Australian Federal Chamber of Automotive Industries VFACTS report also showed total vehicle sales were flat when compared with August last year. Sales for the first seven months of 2013 were running 4 per cent ahead of the same period last year.

The Reserve Bank has retired to the sidelines, CommSec economist Craig James says:

  • We believe that it will be reluctant to cut rates again unless global or domestic factors unexpectedly weaken.
  • The election is out of the road; there are signs that confidence levels are lifting; the housing market is strengthening; and the Chinese economy is improving.
  • The Reserve Bank would be hopeful that the economy strengthens in coming months, underpinned by super-low interest rates and momentum provided by home construction and sales.
  • The main game for the Reserve Bank is the changing of the baton of economic growth drivers from mining to other sectors of the economy. In particular the RBA will be closely assessing borrowing behaviour, especially the desire to take on more risk.

Some reactions to the minutes by the Twitterati. Bottom line seems to be: chances of a rate cut are falling, the board has got its eye on the housing market.

The RBA minutes show the board is keeping a close eye on the housing market too:

Conditions in the housing sector had continued to improve in response to lower interest rates. Information to hand suggested that building activity had increased moderately in the June quarter and building approvals increased in July.

Overall, recent data and information from liaison were consistent with further recovery in the established housing market and moderate growth in dwelling investment.

In the current environment of low interest rates and slow credit growth, members agreed that it was especially important that banks maintained prudent lending standards.

And the bankers turned their attention to New Zealand, where the housing market has been heating up even faster than locally, prompting the central bank to introduce some lending restrictions:

Given the importance of the New Zealand business to the operations of the major Australian banks, the board was briefed on developments in the New Zealand housing market and the macroprudential policy framework recently introduced by the Reserve Bank of New Zealand.

The Australian banking system remained in a relatively sound position.

The dollar has reacted to the minutes, jumping about a quarter of a cent higher to 93.35 US cents.

RBA minutes of its September board meeting are out. Here's a key quote:

Given the substantial degree of policy stimulus in place, the Board judged that it was appropriate to retain the current setting of interest rates.

Members agreed that the Bank should again neither close off the possibility of reducing rates further nor signal an imminent intention to reduce them.

The Board would continue to examine the data over the months ahead to assess whether monetary policy was appropriately configured.

Leighton subsidiary John Holland has won a $257 million contract for work on a rail project linking to Gina Rinehart’s Roy Hill project.

Under the contract, John Holland will construct nearly 350 kilometres of heavy haulage railway track through remote terrain from the Roy Hill mine site to Port Hedland.

The company was awarded the sub-contract from Samsung C&T, which holds the contract to develop the iron ore mine.John Holland expects to start work on the two-year rail project in October 2013.

 

Soft earnings from coal miner New Hope have put the shares under pressure this morning, and they were pushed below $4 in mid-morning dealings.

Shares are currently down 7.2 per cent at $3.98, just off the low of $3.96.

Earlier today the company disclosed a halving in earnings a share to just 8.9 cents in the year to July, from 20.1 cents.

The share price fall comes as little surprise given the shares have had a solid rally from around $3.60 in early July to $4.46 late last week.

Japanese stocks are swinging between gains and losses ahead of the Federal Reserve meeting starting today as investors weigh Lawrence Summers’ withdrawal from the race to lead the US central bank.

The Topix and the Nikkei have both added added 0.2 per cent, after markets were closed for a holiday yesterday.

‘‘Tapering is coming, but it’s only going to be small,’’ says Kerry Series, Sydney-based chief investment officer at Eight Investment Partners. ‘‘There is an economic recovery underway in the US, but it’s fragile. The combination of low valuations, easy monetary policy and reasonable earnings growth across the region means markets will want to go higher.’

TPG Telecom has substantially lifted its annual net profit after growing the number of its broadband and mobile phone subscribers at a faster rate than last year.

TPG booked an annual net profit of $149.2 million for the year ended July 31, up 64 per cent on the net profit of $90.96 million in fiscal 2012.

The prior year’s result was skewed by a $23.2 million one-off tax expense arising from retrospective changes to tax law. Excluding the tax expense, TPG’s net profit rose 31 per cent.

TPG shares have soared 6.2 per cent.

TPG Telecom's Limited (ASX:TPM) full year net profit increases 64 per cent to $149.2 million. Click to play video

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TPG dials up profits

TPG Telecom's Limited (ASX:TPM) full year net profit increases 64 per cent to $149.2 million.

PT0M29S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2tvwt 620 349

The International Monetary Fund has pressed the case for policies to contain the risks from property booms and busts.

The international organisation said in a paper released yesterday that macroprudential policies played a central role in helping to maintain global financial stability.

Such policies, which include tougher lending rules - such as caps-to-value (LTV) and debt-to-income (DTI) ratios - would help to contain the harmful impact of the housing bubbles on the wider economy by limiting the risks associated with increased leverage.

In Australia, sectoral capital requirements have been in place since 2004 for residential mortgage loans.

Here's the executive summary of the paper

Here are the main winners and losers among the top 200 this morning:

Winners and losers

Winners and losers

Local stocks are mostly down in early trade. Here's the sector by sector performance on the ASX200 early on:

  • Materials: -0.6%
  • Financials: -0.1%
  • Consumer staples: +0.1%
  • Energy: +0.1%

As expected, Australian stocks have opened weaker despite a good lead from overseas markets.

The benchmark S&P/ASX200 index is down 8.3 points, or 0.2 per cent, at 5,239.1, while the broader All Ordinaries index has fallen 8 points, or 0.2 per cent, to 5,233.1.

 

Former US Treasury Secretary Lawrence Summers did the Reserve Bank of Australia no favours by pulling out of the race to take over at the Federal Reserve.

The Aussie dollar climbed to a three-month high of 93.94 US cents yesterday as investors bet the withdrawal means the US central bank, which starts a two-day meeting today, will pare stimulus at a more gradual pace. The dollar was fetching 93.2 US cents this morning, but is still up nearly 5 per cent this month, eroding the benefits from a lower currency to miners and other exporters.

Three-year Australian sovereign yields fell six basis points to 2.85 per cent, unwinding most of the climb since the RBA left its key borrowing cost at a record low and said the currency may weaken.

“To the extent that the Fed begins to taper and stops printing US dollars, that could support the US dollar and help the Aussie continue to fall,” said Peter Jolly, the head of market research for National Australia Bank. “The currency moving up here is definitely problematic and will in itself leave the RBA biased to cut rates.”

The RBA will publish minutes of its September 3 board meeting, where it kept rates on hold. Investors will be looking for clues as to why the central bank dropped its easing bias.

On the eve of the most anticipated FOMC meeting since quantitative easing was introduced, there is an air of acceptance in the market for a mild taper despite the data from the last eight weeks, says IG analyst Evan Lucas:

  • The magical figure appears to be $US10 billion - spread evenly over mortgage backed securities and treasuries purchases. With over half of the economists surveyed by Bloomberg expecting taper to be uttered on Thursday morning the question is; will the uneven data out of the US get stronger or will the US economy take it in its stride like it did with sequester?
  • With the Larry Summers effect now an afterglow inside 24 hours there are several market movements to be aware of - both the DOW and the S&P touched their all-time high last night, however were unable to move through these levels having now rallied over 4% in September after the worst month since May 2012. US markets look set for a spark.
  • The uneven industrial and manufacturing data overnight and the spark that is coming should be moderated by the Yellen effect. There is a feeling that markets globally are gunning for a correction. It would be healthy  and would take the ‘twilight’ concern out of the market as hedge fund managers scream about ‘overvalue’, ‘bubbles’ and ‘liquidity issues’.
  • A correction would see liquidity moving through markets again, and would add to the idea that markets are no longer in the grips of fear and the wall of worry is no longer the size of a mountain.
  • Parked cash has finally started to filter into markets as underwhelming yield returns are shed for capital gains. Cyclical plays are seeing strong capital gains and finally drawing cash funds in, and from an Asian centric view this cash is coming from Japan, China and South Korea as these nations see increased economic activity growth returning to their respective countries.

In local news this morning, coal miner New Hope posted a sharply lower profit for the year to July, hit by lower prices and volumes of coal produced.

The net profit fell to $74.1 million from $167.1 million a year earlier on revenue of $652.1 million down from $767.5 million. Earnings a share slid to 8.9 cents from 20.1 cents a year earlier.

Despite the lower earnings, a steady 5 cents a share final dividend has been declared along with a special dividend of a further 5 cents a share.

Global oil prices tumbled overnight after a US-Russia deal over the weekend to dismantle Syria's chemical weapons, easing crude supply fears.

The main US futures contract, West Texas Intermediate for October delivery, closed at $US106.59 a barrel on the New York Mercantile Exchange, down $1.62 from Friday's settlement. Brent North Sea crude for delivery in November, the European benchmark, dropped $1.63 to close at $110.07 a barrel in London trade.

The sell-off came after the United States and Russia on Saturday struck a deal to dismantle Syria's chemical weapons by mid-2014.

"Petroleum prices came under renewed selling pressure in Monday trade after the US and Russia reached an agreement over the weekend to work through the UN Security Council on a resolution pressuring Syria to give up its chemical weapons," said Timothy Evans of Citi Futures.

"The path forward on Syria may not be smooth, and we note the Syrian opposition's disappointment with the deal, but the odds that a military strike can be avoided have certainly improved in recent days."

US stocks mostly advanced overnight after former Treasury Secretary Lawrence Summers withdrew as a candidate for Federal Reserve chairman, lifting some market uncertainty about what was heading towards a contentious confirmation process.

The Dow Jones Industrial Average added 117.88 points, or 0.8 per cent, to 15,493.94. The Standard & Poor's 500 Index was up 9.62 points, or 0.6 per cent, at 1697.61. But the Nasdaq Composite Index was down 4.34 points, or 0.12 per cent, at 3717.85, pressured by a 3.2 per cent decline in Apple shares.

Early enthusiasm faded after President Barack Obama stood firm in warning Republicans in Congress he will not negotiate over an extension of the US debt ceiling as part of a budget fight.

"We are still riding positively on the Summers announcement, however with the debt ceiling deadline less than a couple of weeks away, there will be heightened sensitivity to it," said Andre Bakhos, managing director at Janlyn Capital.

"We are still up and the market is still riding a wave higher and until there is something tangible to create a sense of fear, the trend remains solid."

Investors cheered Summers' decision, as the move likely means an easier path for the eventual nominee for Fed chief, and it also has added to expectations that the Fed will continue its current accommodative path.

Summers was seen as more prone to wind down stimulus than the new front-runner, Fed vice-chairwoman Janet Yellen.

The Australian market looks set to open lower despite international markets mostly gaining on news Larry Summers had withdrawn from the Federal Reserve chairmanship race and lessened fears over Syria.

Here's what you need2know this morning:

  • SPI futures down 17 points at 5238.
  • AUD fetching 93.23 US cents, 92.32 yen, 69.86 euro cents, 58.61 pence
  • On Wall St, Nasdaq -0.1%, Dow Jones +0.8%, S&P500 +0.6%
  • In Europe, Eurostoxx +0.6%, FTSE100 +0.6%, CAC +0.0%, DAX +1.2%
  • Brent oil down 1.8% to $US109.73 per barrel
  • Spot gold up 0.1% to $US1314.10 an ounce
  • Iron ore rises to $US134.10 per tonne

In economic news, the Reserve Bank of Australia releases its monthly board meeting minutes, while the Australian Bureau of Statistics (ABS) releases August data for international merchandise imports and new motor vehicle sales.

Premier Investments, the retail company that owns brands such as Just Jeans, Portmans and Dotti will release its full-year results.

Read more

Good morning. Welcome to the Markets Live blog for Tuesday.

Contributors: Max Mason, Jens Meyer, Luke Higgs

This blog is not intended as investment advice

BusinessDay with agencies

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  • Some of you clowns are so easily manipulated by Allan. It's like he's just posting his own views on things yet you get all worked up and start acting like puppets on strings attached to his fingers and dance in a wild and ludicrous fashion as he types away. I have thus decided to increase Allan's booking fees inline with demand.

    Commenter
    Allan's Agent
    Location
    Hollywood
    Date and time
    September 17, 2013, 4:10PM
  • With 99% of the comments on here stating that the aussie and world economy's are all about to collapse into a cavernous black hole, i wonder why they are on here at all? if the overriding "advice" is to hold cash, this blog seems overally pointless for the vase majority of contributors that see no value anywhere except the 3.75% they are getting from their bank.

    Commenter
    go cats 23
    Location
    geelong
    Date and time
    September 17, 2013, 3:57PM
  • So what are peoples thoughts on tonight in the US and the effect on the market?
    I've bought CFD's in MML @ 2.09, my thinking is if its good news my portfolio will rise but bad news and POG will rise and take MML with it

    Commenter
    Upthecreek2
    Location
    SYD
    Date and time
    September 17, 2013, 3:48PM
  • RIP Eiji Toyoda San.
    What a brilliant engineer and sntrepreneur !!!

    Commenter
    lima
    Location
    Date and time
    September 17, 2013, 3:45PM
  • Another up day ! what a super september stock surge we are having !
    Amazing how many analysts got it wrong.
    Dow futures up one percent so expect more of the same tomorrow.

    Commenter
    kevin
    Location
    sydney
    Date and time
    September 17, 2013, 3:39PM
  • 49 former NASA scientists and astronauts sent a letter to NASA Administrator Charles Bolden last week admonishing the agency for it’s role in advocating a high degree of certainty that man-made CO2 is a major cause of climate change while neglecting empirical evidence that calls the theory into question.

    The group, which includes seven Apollo astronauts and two former directors of NASA’s Johnson Space centre in Houston, are dismayed over the failure of NASA, and specifically the Goddard Institute For Space Studies (GISS), to make an objective assessment of all available scientific data on climate change. They charge that NASA is relying too heavily on complex climate models that have proven scientifically inadequate in predicting climate only one or two decades in advance

    http://www.businessinsider.com.au/nasa-scientists-dispute-climate-change-2012-4

    Commenter
    lima
    Location
    Date and time
    September 17, 2013, 3:26PM
  • Memorandum:

    TO :Allan of Prahran
    FROM : Looking for Value
    SUBJECT : Work Hours
    DATE : Tuesday Sept 17, 2013

    Congratulations on your self appointment to be my secretary. Office hours are 9.30 - 4.30. Please be punctual. I take short black coffee at 10.30 am an 3pm.
    Your first assignment is to give me advice as to when to sell my BDR shares. Sleep well and see you bright and early tomorrow.

    Commenter
    Looking fior Value
    Location
    Date and time
    September 17, 2013, 3:10PM
    • You can't afford me.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 3:37PM
    • hahaha...GOLD!

      Commenter
      Mister Ed
      Location
      Date and time
      September 17, 2013, 3:38PM
    • OMGA. You must be one of Allan's Pollyanna's that he spews about every day. How Optimistic are you??....Allan to work for you? I would say that he has possibly never worked, and couldn't work in an iron lung. He is......just a naughty little boy. If he doesn't get what he wants, he cracks it, and calls everyone Polly.Good luck Value. Don't forget he will be in late and leave early, as he shorts everything...even time.

      Commenter
      Feeling really sorry for you
      Location
      A Universe a long way from Prahran
      Date and time
      September 17, 2013, 3:47PM
    • You seem upset and disorientated. Guessing at pseudonyms thinking it's Allan is very funny (to me and I'm guessing ED and Allan and maybe others).

      See.. the issue is.. you have a lot to say about other peoples' trades and views on international financial markets but when people discuss your trades and views on international financial markets you get mighty upset and that makes me go:

      oo-ah-ah h -ha- h Oo -ah-a ha- ha - a h - ah -oo-ah-ah h -ha- ha

      Commenter
      Kookaburra
      Location
      Markets Live Gumtree
      Date and time
      September 17, 2013, 3:54PM
    • He he... another pollyanna pinged. I like it.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 4:00PM
    • nice one LfV...make sure he wears nice SHORTS on his first day hehe

      Commenter
      Captor
      Location
      Date and time
      September 17, 2013, 4:06PM
    • He should be a valuable addition to your staff, just don't listen to his $60 CBA, $12 ORG and $3.75 FMG shorts advice hehe

      Commenter
      Polly & Anna
      Location
      Date and time
      September 17, 2013, 4:10PM
  • The potential resurrection of Ziggy Switkoski should be of interest to investors. He is best known as a champion for nuclear power. The fact that his name has leaked out may mean that yellowcake is back on the plate.

    Commenter
    Bullishly Gruntled
    Location
    Land of hot air
    Date and time
    September 17, 2013, 3:05PM
    • I thought he was being mentioned to rep[lace Quigley as CEO of the NBN. Could his previous championship of nuclear power mean that all of those NBN fridges on street corners could be nuclear powered. If the power goes out, unlike now, your phone and internet will not work. Try calling 000 then.

      Commenter
      mitch of ACT
      Location
      Date and time
      September 17, 2013, 3:58PM
  • Anyone's thoughts on TLS? Bought some at 4.79, morningstar has a ~4.30 valuation on them. Wondering if I should start thinking about taking my profit.

    Commenter
    Andrew137
    Location
    Date and time
    September 17, 2013, 2:47PM
    • Hi Andrew137, my strategy with TLS has been to buy around $4.50 and sell around $4.90. I am always worried about getting stuck with them above $4.90. At $4.50 they have approx. 6% dividend return decreasing to about 5.5% at $5.00. Not sure when they will get back to my buying level, but happy to wait!

      Commenter
      Zenaphon
      Location
      Date and time
      September 17, 2013, 3:30PM
    • Yes, please sell & drive the price down so I can buy some more. If there is one thing people love to do, it's communicate by each and every means available. These days that's mobile phones, tablets, internet, wireless. Often people have a different device for each method, each with own its plan. Then there's the fee the Libs will pay Telstra for the use of its copper wire, that's if they don't kill the NBN dead as it's a Labor idea and you know how this Luddite gov't hates anything to do with Labor. If things go reasonably to plan I see Telstra providing a steady stream of good f/f dividends plus it seems to be a shelter when the market gets tough. I'm buying Telstra on the dips and selling when it gets near $5.

      Commenter
      mitch of ACT
      Location
      Date and time
      September 17, 2013, 3:50PM
  • "On the hand, you could be like myself....... Have a positive attitude and a belief that things are doing OK"

    Sounds like the "The Secret". Tra la la la... I just imagine what is and things just like you know happen.

    Pollyannas only have themselves to blame.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    September 17, 2013, 2:14PM
  • 1:45pm: The Swiss-based 'bank of central banks' says a global hunt for yield is luring investors en masse into high-risk instruments ........ Ouch the Cassandras are having a field day today. I sold up ANZ and WBC as a precaution against tapering, last week. Today I got back into WBC early. So is William White predicting an imminent debacle greater than the GFC? Most of us can see the storm clouds hanging around. Getting rid of Larry Summers was a message that the Fed is very worried too. My advice is to remain vigilant and prepare a quick escape plan and learn how to grow food. (Remember that the humble potato can be your friend). On a more serious note, the USA has accustomed everyone to money printing. If the going gets rough they and others too, may just flood their countries with cash. Bye bye debts as this would inflate them away. Then each could begin over again, being simplistic.

    Commenter
    Bullishly Gruntled
    Location
    Land of hot air
    Date and time
    September 17, 2013, 2:11PM
  • Thanks for talking down the economy Sol.

    Short PMV $8.40.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    September 17, 2013, 2:01PM
    • PMV a bargain at these prices. Smiggle world domination!

      Commenter
      Kingly
      Location
      OZ
      Date and time
      September 17, 2013, 3:04PM
    • Onesies won't save them.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 3:41PM
  • Discovery Metals has undergone trading halt. They are finally announcing re-financing proposal. Good luck !

    Commenter
    Essen
    Location
    Date and time
    September 17, 2013, 1:55PM
  • Johnbb you and Allan have the same mentality.
    You have stated you have no money in this country no more, you say..Real estate and stocks are over valued and overbought, okay so what ? you keep repeating this every hour every day like a broken record, very annoying.

    Commenter
    Anne
    Location
    Toorak
    Date and time
    September 17, 2013, 1:52PM
    • Nope. Never stated that. Stop making stuff up.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 2:35PM
    • Yeah... well said, if anything comment of
      day goes to Anne of toorak....lol

      Commenter
      gotta laugh
      Location
      Date and time
      September 17, 2013, 2:45PM
    • My motive is not to annoy you but for people to put pressure on politicians to stop what's destroying Australia. Do yo think 95% of people think beyond this W/E's footy? We're doomed because of this and you want it to be more like that?weird..

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 2:46PM
    • @Anne. It's up to the people with a big brain like yourself to spread the word on behalf of the rest of Australia that has no idea they're being scammed, sold out. Annoying sorry but necessary. Don't get annoyed, listen to what's being said and if you can't refute it, and act upon it.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 2:55PM
  • Some may say that it would be foolish to ignore the machinations of government when investing in shares. An example could be PDN. The Abbott govt is a lot more friendly to uranium than Rudds. Don't forget what happened to the poor osterich when with head in sand its ass was easy pickings.

    Commenter
    Bullishly Gruntled
    Location
    Land of hot air
    Date and time
    September 17, 2013, 1:35PM
    • Add to PDN long 54.5c.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 2:09PM
  • Smarties will continue buying.
    Losers will sell and advise others to sell.
    Numbnuts have bubble brains.
    Buy anything today and months later it will give you a nice return, ignore the losers.

    Commenter
    smarties make money
    Location
    bubble talk is dribble
    Date and time
    September 17, 2013, 1:32PM
    • Nobody ever went broke taking a profit but plenty have lost their shirts sitting on a profit built up over months. or years, only to have the market take it all back, and then some, in less than an hour, eg MMS.

      Commenter
      mitch of ACT
      Location
      Date and time
      September 17, 2013, 2:10PM
    • Wow one positive buy comment among sixty negative sell comments.
      I'm with you buying is winning.

      Commenter
      Colin
      Location
      Date and time
      September 17, 2013, 2:13PM
    • Worst possible advice ever seen on this forum. Buy 'anything' and make money... Luckily your a 1-time forum poster.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      September 17, 2013, 2:16PM
    • BNB, AFG, ABS, CNP etc etc etc bluechips, all bankrupt.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 2:39PM
    • Well to make any money on the sharemarket you have to buy something to begin with. It's like the woman who prayed daily to God, "Dear Lord please let me win the lottery." So each week she waited for a call to say that she had won, but no call ever came despite weeks of praying and waiting. So she asked "Lord I pray every day but still I have not won the lottery." A voice boomed down from on high, "Work with me on this one. Buy a ticket"."

      Commenter
      mitch of ACT
      Location
      Date and time
      September 17, 2013, 2:45PM
    • Suckers don't make money.

      Commenter
      Opinion Only
      Location
      Melbourne
      Date and time
      September 17, 2013, 2:47PM
    • Bit of a worry that someone considered BNB, AFG, ABS, CNP blue chips. Good luck buying todays blue chips if that is what you considered quality of the past. Wow...

      Commenter
      Scotty
      Location
      Kew
      Date and time
      September 17, 2013, 3:32PM
    • The only dribbler to make money was Maradonna.

      Commenter
      As a matter of fact
      Location
      Date and time
      September 17, 2013, 3:47PM
    • Yep and most of the large property trusts were considered blue chips and all have been smashed. Trying to rewrite the past won't bring them back to life, Sounds like you were stung badly.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 4:03PM
  • "Hope you are correct Goldie, Just bought BDR at the close for $0.81"

    Commenter: Looking for Value
    September 16, 2013, 4:03PM

    Read more: http://www.brisbanetimes.com.au/business/markets-live/markets-live-fresh-fiveyear-high-20130916-2ttjn.html#ixzz2f7JfoWHg

    BDR down over 5% today lol Ouch...

    Commenter
    Real
    Location
    Talk
    Date and time
    September 17, 2013, 1:29PM
    • Correct! Bought 8500 shares @ $0.81 at close last night and bought another 8500 @ $0.77 about an hour ago. You do the math on the average. At 1.46pm am $170 in the red plus $39.90 brokerage. Not an issue for me because I pay cash and these are REAL shares, unlike your pretend screen name (wink wink).
      Happy for you to be keeping an eye on my business for me, how much is your hourly rate? Obviously in need of some cash to cover your short losses.

      Commenter
      Looking for Value
      Location
      Date and time
      September 17, 2013, 1:53PM
    • oo-ah-ah h -ha- h Oo -ah-a ha- ha - a h - ah -oo-ah-ah h -ha- ha

      Commenter
      Kookaburra
      Location
      Markets Live Gumtree
      Date and time
      September 17, 2013, 3:06PM
  • John bb, the study was of the top 54 banks whole world
    I would also like to get my money out, in fact readers know I did send some away in May but son sent it home by mistake--we made 9800 k Au since then the dollar slipped more
    Bearly, I dunno what to do, I watch it closely, it is not likely that the banks will drop 30% overnight , unless there is a Wwar and I am up well over that now. At one stage I had all my worth in wbc, I scaled back to 60% SHARED BY ANZ WBC

    Commenter
    STUARTH44
    Location
    Date and time
    September 17, 2013, 12:58PM
    • I hear you Stuart. I don't know what to do either. I've missed making a lot of money as the market keeps rising. I'm very twitchy too. Who knows how this will play out. There's a risk in holding cash too because of inflation....Democratically voted governments have destroyed the entire future of their countries. In my opinion, Australia is about as bad as it gets. We had everything to lose and pretended (and still are) that everything's cool. We've populated, sold everything and have the highest personal debt in the world, while having wages multiples our competitors. We can't compete, there's nothing left to sell, we're in max debt, wages will be correcting......This will end horrifically.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 1:19PM
    • I'm starting to focus on the banks as their divs are 2 months away. If their price takes a big fall I plan to hang onto them and just take the div. Normally I sell a week before the ex div date. Can anyone explain why NAB appears to be on steroids? It has a similar feel to MQG when it burst upwards recently.

      Commenter
      Bullishly Gruntled
      Location
      Land of hot air
      Date and time
      September 17, 2013, 1:30PM
    • Ed if I may add
      John B you are dead right
      property stocks, education
      We have no manufacturing base, our children leave school with no languages and precious few skills, they do not learn trades within schools as they do in Fr, De. Austria and Nl
      So when they leave school they are ill prepared for apprenticeships,--there are none anyways
      So yes this country will die
      We export almost no food and no manufactured goods
      So yes if I was young again I would re locate, too late for my boys, they have no proper work and it is killing them and us
      I would go, I have two passports Eu and Kiwi-it is the long dark winter nights that stop me
      There are plenty of places with few resources that are doing better and will do better than us, always , because of the ethic
      However if you go , your children may have a struggle to catch up
      Have you noticed many of our JOBS are not really jobs? like the 7 dwarfs that stand holding signs to direct traffic around road works? In Eu they use a temporary set of portable signals, cost --nothing

      Commenter
      stuarth44
      Location
      Date and time
      September 17, 2013, 1:31PM
  • ED: 9.36 comment says "Prestige Investments". It should read "Premier Investments".

    EDs: Gracias.

    Commenter
    Gordon Gekko
    Location
    Greg Coffey World
    Date and time
    September 17, 2013, 12:48PM
  • Talk of a property bubble is now widespread and R/E prices are being watched by the RBA. (Special mention to all the bubblers who have been warning us every day about an onrushing bubble). Basic supply and demand theory should mean that a building boom is imminent as investors try to cash in on the bubble. But does the Sydney bubble represent Australia. So can we expect the RBA to raise rates to cool down the Sydney market and thereby punish everywhere else?

    Commenter
    Bullishly Gruntled
    Location
    Land of hot air
    Date and time
    September 17, 2013, 12:35PM
    • Exactly. As that is what the Sydneysiders have said along.

      Yes, prices are high. Yes, nothing houses in nothing suburbs are 500k and more (hi, GA), but demand here is high and raising rates 1% to slow down property prices will not hurt Sydney IMO. 3.5% official cash rate is still very low.

      Commenter
      heybert
      Location
      Sesame Street
      Date and time
      September 17, 2013, 12:54PM
    • I am 1 step away now from complete removal of Australia investments from my financial life style.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      September 17, 2013, 1:05PM
    • This market has nothing to do with supply and demand. This is easy money from the richest people in the world looking to park their money somewhere other than the country where they live. If you want to see supply and demand look at rent (GOING DOWN) Builders can't make a dollar out of it The land is too expensive. i.e. When prices rise, it's the land going up so builders are STILL in the same position. My six year old could tell Stevens, Abbott, Rudd, Gillard et cetera that. Let's have the FIRB investigated and see some bureaucrats go to jail.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 1:06PM
    • Agree JohnBB. Being in the industry, why are we forced to tender projects at 0% margin in the 'attempt' to secure the next pay cheque? Trades have higher charge out rates than project managers... there is no supply and demand issues... trades are screaming for work but still flog projects with $75/hr charge out for a sparky or $90 for a boily.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      September 17, 2013, 1:31PM
    • RBA is at the cross-roads. If rates a lifted up, it will cool the property market, but put upward pressure on the $A. A higher dollar will put pressure on our miners - something the RBA wants to stop. If rates go down, it will push the Aussie down & assist our miners, but it will also trigger increased property demand and prices and hence intesify a property bubble scenario. It will interesting to see what RBA does.

      Commenter
      Gordon Gekko
      Location
      Greg Coffey World
      Date and time
      September 17, 2013, 1:51PM
    • I get your point John but the money flowing in is a form of demand. There's more buyers in Sydney than there is stock.

      Commenter
      heybert
      Location
      Sesame Street
      Date and time
      September 17, 2013, 2:18PM
    • A .1 tick up in occupancy will see no new dwellings required in Sydney for 2 years.

      There is no shortage.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 4:06PM
  • You you want risk becoming wealthy or poor ..... Try SBM. More daily fluctuations than Ricky Stuarts coaching job.

    Commenter
    Pierre
    Location
    Date and time
    September 17, 2013, 12:30PM
    • Yes, hope you have a regular heartbeat with this one. Never again for me!

      Commenter
      Xenaphon
      Location
      Date and time
      September 17, 2013, 12:51PM
    • Bought in last week in what I thought was a low. Not losing sleep yet but will be nervously hyperventilating if it reaches new lows!!

      Commenter
      panda
      Location
      perth
      Date and time
      September 17, 2013, 1:05PM
    • This one can go as low as 0.45...so brace yourself.. Good stock for speculating..

      Commenter
      The Romaniac
      Location
      Date and time
      September 17, 2013, 1:21PM
  • I've just bought a parcel of RRL shares. IMO excellent 2012/13 results with 114% increase in profits, new mines coming into production and costs of A$562 per oz. Market expected even more as price dropped 6% today. Obviously there's always a gold price risk.

    Commenter
    Yin or yang
    Location
    Date and time
    September 17, 2013, 12:21PM
    • Too risky in my view. Morningstar assessment on August 20 was SELL. They have a fair value of $2.00

      Commenter
      Xenaphon
      Location
      Date and time
      September 17, 2013, 12:49PM
  • XJO getting support from banks after RBA minutes in keeping interest rate at low level. AUD down as a result. HK and China mkt down at moment capping XJO advance.Interesting mkt everyday.

    Commenter
    Andrewwflee
    Location
    Date and time
    September 17, 2013, 12:08PM
    • The XJO/XAO owe almost the entire rally up to 8 stocks. The pre-08 diverse stock holders are still sitting on 40% losses.

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      September 17, 2013, 2:21PM
  • Sold TEL on Friday at 2.00 cum div.
    Today its back up to 2.00. wtf. should have held on. C'est La Vie

    Commenter
    lima
    Location
    Date and time
    September 17, 2013, 11:56AM
    • We are all experts with hindsight !

      Commenter
      Gary
      Location
      Date and time
      September 17, 2013, 12:20PM
  • RE: RBA on interest rates

    The RBA is in a real bind. The "emergency level" interest rates are only propping up the Australia property bubble in some parts of the country now. It's also the desperate loss making littlelandlords getting excited about "emergency level" interest rates, not the critical first home buyer segment who has smelled a rat and are not taking the bait (or banks aren't lending them the money to take the bait).

    The RBA is actually now more concerned with what is happening in the US and other major economies than in Australia. They know that as US interest rates continue to trend up towards more normal long term levels Australia will have to join that trend in about 12-18 months. If the RBA doesn't raise rates the AUD will crash, import prices will rise, and the property bubble will burst. If they do raise rates the fiances of people in Australia who are MASSIVELY indebted will buckle and the property bubble will burst.

    It's over. The game is over. Every person who does even basic research of international financial markets could see that since 2010.

    Commenter
    Gordon Akman
    Location
    Broadbeach
    Date and time
    September 17, 2013, 11:55AM
    • Its a long time coming GA
      They pull every string to hide the problem.

      Commenter
      yada
      Location
      bobf wa
      Date and time
      September 17, 2013, 12:15PM
  • any ideas on why LEI is being sold off despite two positive announcements late yesterday?

    Commenter
    etfs
    Location
    Date and time
    September 17, 2013, 11:45AM
    • No great insight as to the price drop other than some big jumps lately. I'm watching this stock as a) it's won a number of very big contracts lately and b) change of Govt is likely to increase infrastructure projects (eg. roads). But personally I'm looking for cheaper entry - quite possibly will never eventuate.

      Commenter
      Yin or yang
      Location
      Date and time
      September 17, 2013, 2:50PM
  • "“This looks to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behaviour in the debt markets before the global storm hit in 2008."

    I'm going to absolutely revel in watching this unfold and laugh as the electorate swallows the lines "how could we have seen this coming?" from politicians that have encouraged risk and the HIGHEST personal debt in the world while selling all of Australia's assets in a "free" market........ I've protected my family by moving all my money off shore while getting my kids to learn other languages. Australia is as doomed as any other western country that votes for largesse.

    Commenter
    JohnBB
    Location
    Date and time
    September 17, 2013, 11:42AM
    • On the hand, you could be like myself....... Have a positive attitude and a belief that things are doing OK, and now with stability in government the outlook is even better.
      Life is AOK and will get better !

      Commenter
      Julie
      Location
      Date and time
      September 17, 2013, 12:18PM
    • I wonder if Glenn Stevens will be moved on before that happens (although I hope not). it would be great to see him swallow the medicine he helped create and wipe that smug look off his face!

      Commenter
      panda
      Location
      perth
      Date and time
      September 17, 2013, 12:40PM
    • "Have a positive attitude and a belief that things are doing OK"..........What could you possibly be basing that on? We have sold 85% of pretty much everything, we have wages multiples our competitors, we spend far more than we earn (at today's inflated wages). In other words we're going backwards and will have to eventually reach a stop. How can anyone be optimistic knowing this? Where will the money come from? If you can't answer that, your view is simply wishful thinking.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 12:55PM
    • Slightly alarmist? Isn't it a better strategy to carefully diversify risk rather than running around in circles screaming that the sky is falling? If everything collapses, it's unlikely to be a bed of roses overseas - it will be a question of relative degrees of yuk. Most of my assets are offshore at the moment also, but for different reasons. In the medium term I am looking to diversify by bringing some onshore. I have deep confidence in the Australian economy to adapt to new circumstances. I also have the tinfoil hat market cornered, just in case. Let me know if you need some...

      Commenter
      Green Sheep
      Location
      Puzzlement
      Date and time
      September 17, 2013, 1:10PM
    • Like I said Green Sheep. " How can anyone be optimistic knowing this? Where will the money come from? If you can't answer that, your view is simply wishful thinking."....

      Go on have a go at it instead of "I have deep confidence in the Australian economy to adapt to new circumstances"...What does that even mean? What circumstances?: No assets? Entire nation defaults on their massive personal loans? We're in severe trouble (and horrifyingly it's not even in public debate) and if you know how we can get out of that, you really should share it. It's not about tinfoil hats, it's about reality and Australia having spent yesterdays, today's and tomorrows money all in thirty years of greed and stupidity..

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 1:35PM
    • Thanks. I think the onus is on you to prove your wildly hyperbolic statements :) No really. My confidence is based on observation and the historical record. What is yours based on? I'm not trying to stir you up, I'm just a little bemused by the degree of panic you convey. Sure, I am also a little skeptical about China and am out of stocks for the moment but 'doomed', 'moving offshore', 'learning foreign languages'?? Wow. More languages are not going to save anyone if the economy collapses. Peace.

      Commenter
      Green Sheep
      Location
      Amusement
      Date and time
      September 17, 2013, 3:11PM
    • " I think the onus is on you to prove your wildly hyperbolic statements"....Actually Green Sheep the initial "hyperbolic" statement came from former BIS economist if you read it. My comments are not hyperbolic, they are exactly what will happen if we stay on trend (which we will). Clearly you cannot refute what I'm saying, or suggest where the money's coming from, that's why you try and discredit what I'm saying with hyperbolic words like hyperbolic. We will be in a depression within a decade and will never recover. This country has been completely scammed with free market BS that was way too tempting to a very greedy and stupid population. Mark my words Green. It cannot end any other way. Not possible and I think you know that.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 3:30PM
    • "My confidence is based on observation and the historical record"............That is exactly my point. All that's been clouded and is not real. Asset sales, massive personal debt, and rich migrants have completely covered the extent we are living way beyond our means. The day comes where it can't go on, but on top of that we have all the damage from it.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 3:55PM
    • perhaps you might be better suited moving to dubai where you will have less financial worries... until the oil dries up.

      Commenter
      go cats 23
      Location
      geelong
      Date and time
      September 17, 2013, 3:58PM
  • How many rate cuts are too many?

    Commenter
    SVG
    Location
    Date and time
    September 17, 2013, 11:37AM
  • Interesting - yesterday, word was that Australian banks were overvalued, comprising 14% of global banks' market caps. Today, 3 of the big 4 are up - in a down market !

    Commenter
    Bud Fox
    Location
    Date and time
    September 17, 2013, 10:55AM
    • I have no idea why they question, our banks rank 15--18 as the worlds safest

      Commenter
      stuarth44
      Location
      Date and time
      September 17, 2013, 11:06AM
    • @Stu. Weren't they going on P/Es. Sold ANZ and WBC last week as a precaution against taper. Will sell IAG when it hits 5.88. Re bought WBC today as the taper scare has eased. There must be a chance of a token tape though, just to remain predictable. The banks and TLS will remain high as long as yielders keep pouring their smsf cash into the market. Yielders want safety and dividends above term deposit rates so where are they to go?

      Commenter
      Bearly Gruntled
      Location
      Land of hot air
      Date and time
      September 17, 2013, 11:40AM
    • "rank 15--18 as the worlds safest" Lend money to foreigners, taxpayer backs the bank, while pricing out the next generation of house buying Australians. It could not get more ridiculous. Australian voters will put up with anything.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 11:56AM
  • For market stability we need certainty from government. We got it yesterday from TA in spades. Women are to be feisty with sex appeal and science is a horrible Galellean pesky inconvenience best put in a jail out of sight. TA is but an example why politicians should never have been given the abomb, gas etc. At least we know where the govt stands.

    Commenter
    Bearly Gruntled
    Location
    Land of hot air
    Date and time
    September 17, 2013, 10:24AM
    • Its pretty disgraceful that women make up only 5% of his cabinet.

      Is that just due to a lack of talent?!

      The Libs PR team is going to be kept very very busy.

      Commenter
      heybert
      Location
      Sesame Street
      Date and time
      September 17, 2013, 11:01AM
    • This is a finance forum .......... not a hate forum for the disgruntled.
      I'm pleased to see we will have stability for what appears to be at least the next six years

      Commenter
      Julie
      Location
      Date and time
      September 17, 2013, 11:23AM
    • Like TA said about Fiona. Fiesty with sex appeal. I expected to hear that she was intelligent and a fighter for her electorate, oh well, maybe he will learn.

      Commenter
      Bearly Gruntled
      Location
      Land of hot air
      Date and time
      September 17, 2013, 11:27AM
    • All positions should be filled based on ability and merit. Whether the person is male or female is irrelevant.
      Sexism is sexism,whichever way it goes.

      Commenter
      Chumlee
      Location
      Date and time
      September 17, 2013, 11:35AM
    • But consigning sophie & connie to the dog house has been a beautiful result for Oz.

      Commenter
      toxic
      Location
      illawarra
      Date and time
      September 17, 2013, 11:59AM
    • Chumlee. I do agree which is why I ask the question, is there only one woman in the Lib party capable of working in the cabinet? Genuine question.

      Mitch, this is a finance forum. No more Lib bashing. Julie said so.

      Commenter
      heybert
      Location
      Sesame Street
      Date and time
      September 17, 2013, 12:26PM
    • Probably there are,but the best people happen to be male,don't hold it against them.

      Commenter
      Chumlee
      Location
      Date and time
      September 17, 2013, 1:36PM
    • Statistically impossible.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      September 17, 2013, 2:37PM
  • RIO down 9% this morning. Some profit taking perhaps. Silly buggers - RIO is heading for $70 in the next few weeks. Chinese demand will see to that.

    Commenter
    lima
    Location
    Date and time
    September 17, 2013, 10:19AM
    • Surely you mean 0.9%..... ;-)

      Commenter
      mirage
      Location
      Date and time
      September 17, 2013, 10:40AM
    • Oops meant to say 0.9%
      9% would have been nice LOL

      Commenter
      lima
      Location
      Date and time
      September 17, 2013, 10:41AM
    • Down 9%? Freudian slip perhaps. I'll take the other side of that trade - think it sees $60 before $70

      Commenter
      50BahtLeo
      Location
      Date and time
      September 17, 2013, 10:45AM
    • Agree. With AUD going up the profit will be affected,

      Commenter
      Sage
      Location
      Date and time
      September 17, 2013, 11:19AM
    • Headwinds for Rio before $70. Perhaps when US mine collapse is fixed & Africa & Mongolia issues behind them Rio might head to $70. Previous year writedowns have smashed capital and investor confidence. While Rio is selling all production through Cape Lambert the fe price has slid from $138 to $134 in less than a week.

      Commenter
      Seb Gonzo.
      Location
      New Farm
      Date and time
      September 17, 2013, 11:34AM
  • Any holders of AAC here, are you intending to participate in the new 7 for 10 offer?

    Commenter
    Fred
    Location
    Date and time
    September 17, 2013, 10:13AM
  • Market seems to have trouble breaking the 5240 mark. Will we see this beast push to 5300+ now the Big Ben will continue the printing press indefinitely?

    Commenter
    Liberator
    Location
    SEQLD
    Date and time
    September 17, 2013, 10:03AM
    • When XJO hits 5500, then it will be time to take some risk off the table.
      Until then, think I'll just sit back at watch.
      I like to watch :)

      Commenter
      lima
      Location
      Date and time
      September 17, 2013, 10:14AM
    • Oh... DOW up - ASX down... who would have figured!?

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      September 17, 2013, 10:27AM
    • Jonaze ?

      Anyhoo, now RBA talking more rate cuts to bring down the dollar.

      Give up Stevens, why don't you join the Bernank.

      Commenter
      The Oracle
      Location
      Engadine
      Date and time
      September 17, 2013, 10:53AM
    • It seems clear that for a benchmark target we will have to wait for ascendency appointment in the FED. But of course that will only be short term honeymoon, then the direction of the economy will be the overriding factor in pull back time frame

      Commenter
      Gary
      Location
      Date and time
      September 17, 2013, 11:27AM
  • Dow Jones at all time high? And people say the ASX is overvalued!!!

    Commenter
    Andrew137
    Location
    Date and time
    September 17, 2013, 10:02AM
    • It is. Sorry to say. The DOW in my opinion is looking like the next debt crisis itself. I refuse to hold stock while the DOW is inflated 6000 points by funny money and also whilst all lending / trading practices remain THE SAME as pre-GFC... what happened to reform? Sydney home prices are reminiscent of the pre-GFC financial rally... it collapsed in a heap. The calm before the storm...

      Commenter
      Liberator
      Location
      SEQLD
      Date and time
      September 17, 2013, 10:34AM
    • Whatever the ASX is doing is simply a mirage...don't let it fool you, it's a trap; Sell sell and sell. Also do NOT get involved in any real estate purchases right now. "The Great Collapse" is on its quiet way. Stocks to plunge, bonds to collapse, inflation sky-high, oil to record highs, real estate...well, at least 60% off today's values in major cities alone & much more. It is inevitable. Get out, stay out, pay out any outstanding debts, keep only cash. Last warning, last notice. Remember this comment, recall this notice when it will all come down...

      Commenter
      Wisemoney
      Location
      Sydney
      Date and time
      September 17, 2013, 11:02AM
    • "what happened to reform?" No reform because MOST voters aren't smart enough to know what's going on. What we'll have is the rest of Australia's wealth transferred to other countries and big business. We'll populate at the rate of 1000 people a day and leave our kids one humongous mess. But hey, we're having a ball spending like drunken sailors THINKING we're rich because our house went up in value. Only time will teach the moronic voters how ridiculous it all is.

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 11:20AM
    • @ wisemoney, It appears he have little faith. I am inclined to believe in Aussie market, but of course sentiment mostly overrides value and common sense. Ether I will do well, or you will be seen as cautious and wise ! Only time will tell.

      Commenter
      Gary
      Location
      Date and time
      September 17, 2013, 11:30AM
    • Wisemoney, you must be a bundle of joy when you get home each night
      Why are you here in this wee corner of the Planet, if all of your wise--money is in Arthur Ash?
      Don't start a business, you'll be convinced it will fail
      Sure we are all a bit jittery, but, you sit back you sink

      Commenter
      stuarth44
      Location
      Date and time
      September 17, 2013, 11:43AM
    • @Stuarth44. "Sure we are all a bit jittery, but, you sit back you sink" Unfortunately Stuart, you sink either way. Australia, along with every other western country is destined to poverty. Populating will of course exacerbate it, as will the "positive" people refusing to acknowledge the free market model is a complete joke, that completely lacks any common sense, designed to take money from you and transfer it to other people..

      Commenter
      JohnBB
      Location
      Date and time
      September 17, 2013, 12:19PM
    • I'm not sure whether the crash is imminent, but one thing is for sure, the money printing in the US will end in tears sooner or later.

      It will be interesting to see how the social-media administration in the US will deal with the debt ceiling next month. Maybe Oprah, Jay-Z or Beyoncy have the solution ...

      Commenter
      Dr No
      Location
      Sydney
      Date and time
      September 17, 2013, 2:35PM
  • Thanks to Xenaphon for his informative response to my query from yesterday.

    Commenter
    Roger
    Location
    Date and time
    September 17, 2013, 9:56AM
    • My pleasure Roger, all here to help each other I trust :)

      Commenter
      Xenaphon
      Location
      Date and time
      September 17, 2013, 12:54PM
  • Commentators always referring to index "record highs'. They are just that & dont reflect the real mkt. A few stocks doing the heavy lifting eg banks, telstra, big miners. Most other stocks are treading water. Mkts currently trading on technicals . As soon as US treasury nonsense out of the way (incl debt ceiling) mkts should return to real world & trade on coy fundamentals incl earnings. Tip here is be very selective in stock picks as there could be some major disappointments.

    Commenter
    Seb Gonzo
    Location
    New Farm
    Date and time
    September 17, 2013, 9:53AM
  • I mentioned investing in Aussie banks yesterday and someone (Gordon Akman maybe?) suggested I look elsewhere, such as J.P. Morgan.

    I've considered JP Morgan and Goldman Sachs before, I just don't know how! I use Commonwealth's MyWealth to buy (long) Aussie stocks, can anyone tell me a simple way of picking up overseas stocks?

    Commenter
    Fred
    Location
    Date and time
    September 17, 2013, 9:52AM
    • I came close(just pulled back at last sec ) to selling WBC at 32.15 today.
      All the noise about our banks, I believe is, --just noise
      I was going to swap horses to anz, still may, see how the day runs
      Good luck all

      Commenter
      stuarth44
      Location
      Date and time
      September 17, 2013, 10:49AM
    • You can request access to buy Intl Shares on CommSec.

      Commenter
      heybert
      Location
      Sesame Street
      Date and time
      September 17, 2013, 10:53AM
  • Your headline reads as though Larry Summers somehow has some influence on sentiment about Syria. Well.. this is the market, I suppose. Thanks Larry, you've ruined my oil stocks.

    Commenter
    Panhandler
    Location
    Date and time
    September 17, 2013, 9:41AM
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