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Markets Live: Stocks finish up

Date

Patrick Commins, Jens Meyer

A boost to banks and consumer discretionary stocks has outweighed falls in iron ore miners.

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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 around 9:30.

 

Local shares moved higher despite falls in the miners and a disappointing start to company reporting season.

The benchmark S&P/ASX 200 Index gained 36.5 points, or 0.7 per cent, to 5331.5, as heavy falls among resource stocks were outweighed by gains in the finance sector. The broader All Ordinaries Index also added 0.7 per cent.

Local shares received little guidance from overseas at the open as US equity markets were closed on Monday night due to the Martin Luther King Jr holiday. Major markets around Asia provided positive leads in the afternoon.

Consumer services was the best-performing sector, up 1.5 per cent, buoyed by gambling stocks. Casino operator Crown Resorts added 2.5 per cent to $18.

The big four banks all closed higher. Commonwealth Bank and National Australia Bank both rose 1 per cent to $76.10 and $33.99 respectively. Westpac added 0.8 per cent to $31.79, and ANZ gained 0.9 per cent to $31.15.

“Bank stocks won’t do as well in 2014 as they have over the past three years but they will still generate decent returns. Valuations may have expanded but the banks have also improved profitability,” T. Rowe Price International head of equities Australia Randal Jenneke said.

Read more.

Fears that households might be about to get their first taste of inflationary price pressure in years due to a weaker Australia dollar are unlikely to change the views of investment experts who want the currency below US85¢.

The release of key consumer price inflation data for the December quarter on Wednesday is expected to produce a benign result despite evidence of higher petrol prices due to a weaker currency.

''The only area where we are seeing any meaningful inflationary impact from the weaker Australian dollar is via higher petrol prices. The inflation outlook remains quite benign,'' said Westpac senior economist Justin Smirk.

Read more.

GUD Holdings’ underlying net profit fell 31.4 per cent to $14.9 million in the December half as weaker sales and margins in Sunbeam Appliances and Dexion storage solutions units countered stronger earnings from automotive products and water pumps.

The company cut its interim dividend from 26¢ to a fully franked 18¢ a share, payable March 6.

After taking into account one-off restructuring costs of $10.1 million at Sunbeam and Dexion, GUD’s bottom line net profit plunged 74 per cent to $4.8 million.

The consumer and industrial products company, which has long been considered a bellwether for the economy, maintained its guidance for a 20 per cent decline in underlying full year earnings before interest and tax.

“I fully expect to see improvements in performance being evident in the 2015 financial year,” said new managing director Jonathan Ling.

GUD shares fell to a four year low of $5.15 in December after a profit downgrade but have since recovered to $5.74, and, in a sign investors had expected the poor result, finished slightly higher on the day.

Read more.

 

Turning to today's best and worst, shares in Transfield Services clocked up a 7.5 per cent gain, while Magellan Financial Group added 5.6 per cent.

GWA Group. Energy World, and Mesoblast all finished up more than 5 per cent.

On the other end of the scale, and as mentioned a number of times today, a drop in iron ore prices weighed on miners of the metal.

Fortescue and Atlas Iron were the worst performers, both down by more than 4 per cent.

The well-out-of-favour Forge Group slipped another few per cent today as well.

The best and worst performers today.

The best and worst performers today.

That's it for today. The benchmark S&P/ASX 200 index has fought back after a soft start to finish up 34 points, or 0.6 per cent, to 5342, with the banks all recording strong gains.

The small end of the market, as measured by the Small Ords, was up 1.1 per cent.

Looking across the sectors, consumer discretionary was the big winner, up 1.5 per cent, after displaying some weakness in recent weeks.

Resource stocks were a drag on the market, falling 0.4 per cent, led lower by iron ore miners after the price of the bulk commodity sold off. Rio was down 1 per cent.

 

Sydney has the fourth least-affordable housing market in the world, after Hong Kong, Vancouver and San Francisco, an international report released today has found.

Melbourne was ranked sixth, after San Jose, the US-based Demographia International Housing Affordability found. The survey looked at housing markets in Australia, Canada, Hong Kong, Ireland, New Zealand, Singapore, the UK and the US.

Australia has the highly amount of "severely unaffordable" housing markets, at 25, followed by the US with 23 and the UK with 15.

"Each of Australia's major markets has been 'severely unaffordable' for all 10 years of the survey - a distinction shared only with New Zealand, with its single major market, Auckland," the survey's authors wrote.

All the "severely unaffordable" housing markets had restrictive land use policies, the authors added.

Read the full report here.

 

Sydney is the fourth most unaffordable housing market in the world.

Sydney is the fourth most unaffordable housing market in the world.

Chinese steel and iron ore futures slid on Tuesday to their weakest levels since they were launched, reflecting thin demand from the world's top consumer of the two commodities that has also slashed spot iron ore prices by 7 per cent this month.

Tighter access to loans and slow steel demand are keeping Chinese steel producers from replenishing iron ore inventories ahead of the week-long Lunar New Year break as they have done in past years.

Restocking demand sent spot iron ore prices to $160 a tonne in January last year, ahead of the holiday in February.

"We are far and away from any restocking this year," said an iron ore trader in Singapore.

"The market is pretty depressed, the reason being the tight credit situation in China and high port stock inventory."

Iron ore for immediate delivery to China fell nearly 2 percent to $124.80 a tonne on Monday, its lowest since July 10, according to data compiled by Steel Index.

Monday's drop was the deepest for iron ore since mid-September.

The price may decline further with Shanghai steel futures weakening for a fourth straight day on Tuesday.

Prospects of slower economic expansion in China, which would curb steel demand, were also dragging down prices. China's economy is likely to cool further this year after annual growth eased to a six-month low of 7.7 percent in the fourth quarter.

 

A theme in the past couple of days has been the continuing switch from bonds to shares. So what stocks would bond investors fancy? Credit Suisse has had a crack at identifying them.

The broker’s process has a bent towards stocks with a sustainable yield, to provide the income stream that bond investors require, but also with a potential for growth, that all sharemarket investors look for.

The broker also takes into account that as investors get more comfortable with the idea of being back in the sharemarket, after some sort of catastrophe, they are willing to take more risk. When that happens the search for yield isn’t as important as the promise of capital gains.

For that reason stocks like Rio Tinto and Fortescue Metals might come into play.

They are not really known for the yields but with a drop in capital expenditure they will start to generate a fair bit of cash flow.

The other stocks the broker has identified include Arrium, Fortescue Metals, Challenger Financial, Bank of Queensland, National Australia Bank, Myer, Suncorp, Macquarie Group, Mineral Resources and Spark Infrastucture.

 

Nine Entertainment Co is rating highly with the analyst community, with two more brokers slapping "buy" ratings or the equivalent on the stock.

JP Morgan and Macquarie have joined Credit Suisse and CIMB with positive recommendations on the recently listed free-to-air television network, with the stock up over 3 per cent to $2.07 a share today, in the vicinity of its $2.05 offer price

On Monday fund manager Perpetual revealed it has a 5.4 per cent stake in the company.

Macquarie has initiated coverage of Nine Entertainment with an "outperform" rating, with a 12-month price target of $2.40, implying a forecast annual total return (including dividends) of 25 per cent.

The days of households deleveraging are over, UBS economist Scott Haslem notes:

  • Despite a relatively patchy domestic economy, Australia’s household debt-to-income ratio ceased falling a year or so ago, and has since been glacially drifting higher.
  • While the extent of the turnaround is minimal, it’s nonetheless surprising, given the lack of deleveraging that’s occurred over the past half-decade. Indeed, from its peak of 153% in Q306, RBA calculations for Australia show a trough 145% in mid 2012.
  • This 8%pt reduction in household leverage is modest, compared with the 20-30%pts of deleveraging in the US (now 105%) and the UK (now 138%).
  • Moreover, over recent quarters, Australia’s household debt ratio has risen back to 148%, compared with the EU, which also hasn’t fallen, but is at least ‘steady’ at a much lower 110% (Figure 2).
  • For the dollar-bloc, while the underlying drivers may differ, the outcomes appear similar. While Canada’s household debt to income ratio has yet to stop rising, crossing the 150% in mid-2013, New Zealand has mirrored its Antipodean neighbour, having deleveraged into mid 2012 to 142% (-11%pts), before retracing half of this over recent quarters, rising up to 148% in Q313.
<p>

Rio is top of the blue-chip pops, with 16 of the 20 analysts covering the stock rating it a buy, on Bloomberg data.

BHP is next, while CSL also rates an overall buy recommendation from "the street".

Analysts are more cautious on CBA, but rank NAB and ANZ in the top five of the dozen stocks we've picked out.

 

Rio rates the best among analysts, followed by BHP, while CBA is the least preferred.

Rio rates the best among analysts, followed by BHP, while CBA is the least preferred.

The debate over house prices and housing affordability is not restricted to Australia. As the chart in this tweet by Bloomberg's head of economics, house prices have been lifting in other countries such as the UK and China.

Citigroup Global Markets Australia has paid a penalty of $40,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel.

The penalty was for failing to demonstrate prudent risk management procedures by not setting and documenting appropriate maximum price change limits, as required, ASIC says.

Butter is back! And its big business again, too. This from Quartz:

Anglo-Dutch consumer products giant Unilever spent more than 20 years trying to beat butter at its own game. But the maker of Flora and I Can’t Believe It’s Not Butter, appears ready to give up the fight.

“For the last 20 years or so, we have been too obsessed, overly obsessed on the fact that butter was opposed to margarine,” Antoine Bernard de Saint-Affrique, the head of Unilever’s Food division, told investors last month. “I’m happy to say that this time is over and we have changed in a very significant way.”

In what Unilever executives describe as a “fundamental turnaround,” the consumer products giant is now selling a spread made with butter.

The move amounts to a stark about-face for a company that has been an anti-butter bastion for years.

But the reversal is a wise one.  As the locus of health and nutrition concerns have shifted away from fat content and toward worry over processed foods, margarine sales have tanked. In the US, margarine consumption is at a 70 year low. Since 2000, sales are down by more than 30 per cent.

Meanwhile, butter consumption in the US hit a 40-year high in 2012. Sales are up by over 65% since 2000.

Read more.

 

Butter is back, and in a big way. Take that., margarine.

Butter is back, and in a big way. Take that., margarine.

<p>

Something to lighten the mood as we head into the second half of the session (and to be honest, there's not a whole lot of news around...).

To recap: the ASX200 is slightly higher in choppy trade, led by banking and defensive stocks, with Wall Street closed overnight for Martin Luther King Day and offering no leads to follow.

An uptick in some banking and defensive stocks is helping to buoy the index. CBA and NAB are both up 0.9 per cent, ANZ has added 0.75 per cent and Westpac 0.7 per cent.

"The index has just been trailing off, it's obviously trading sideways with traders waiting for what the Fed's going to do in the US and how investors will react to that news," says Jonathan Fyfe, investment advisor and portfolio manager at Wilson HTM Investment Group.

The resource sector has been worst hit as iron ore and copper dipped after near-term demand prospects from top consumer China remained muted despite slightly better-than-expected Chinese growth data.

Heavyweights BHP Billiton and Rio Tinto are down 0.2 per cent and 0.7 per cent each, while Fortescue is down 3 per cent after the iron ore price slid overnight.

 

Following up on that Oxfam study saying that 85 people own half the world (see 9.54am), Exec Style's Steve Colquhoun has taken a closer look at who's in that exclusive club and while the names won't come as a surprise, he notes that there's only one Australian member:

Gina Rinehart's wealth is estimated at $US15.2 billion, ranking her the world's 61st richest person.
Her personal fortune is estimated to exceed the GDP of 78 countries including Jamaica, North Korea and Iceland.

Read more

 

 

Gina Rinehart's wealth exceeds the GDP of many small countries.

Gina Rinehart's wealth exceeds the GDP of many small countries. Photo: Bloomberg

This year should be another solid year for shareholders, despite relatively full valuations, reckon local strategists at investment bank Citi.

They have a year-end target of 5850 for the ASX 200, implying a 10 per cent return from where we are now, before factoring in dividends.

Underpinning their optimism is that earnings growth looks more promising, particularly in the resources sector (which they continue to favour).

But they also see greater uncertainty than the previous couple of years, with the change of direction in US monetary policy looming large. Adding to that is whether or not the local economy shows signs of picking up in the next 12 to 18 months.

The more cyclical industrial stocks no longer have as compelling valuations, write the strategists, but have the potential to become expensive as their earnings recover, and they also continue to prefer them over the more defensive sectors and banks.

 

The easing of the resources boom has led to slower passenger growth at Brisbane Airport than its larger capital city rivals, Sydney Airportand Melbourne Airport.

Brisbane Airport reported 1.4 per cent passenger growth in 2013, led by a 4.8 per cent rise in international traffic but only a 0.6 per cent rise in domestic traffic.

The 1.4 per cent overall growth rate at Brisbane Airport to 21.8 million passengers compared with a 4 per cent rise to 30.6 million passengers at Melbourne Airport and a 2.6 per cent rise to 37.9 million passengers at Sydney Airport.

All three airports reported stronger growth rates for international passengers than for domestic passengers but international passengers comprise a smaller portion of traffic as a starting base at all of the airports.

Sydney Airport and Melbourne Airport both said December 21 was the busiest day on record for traffic at their respective international terminals, while Brisbane Airport reported a record-breaking day on December 22.

National Australia Bank is making a push to increase its share in consumer lending, cutting interest rates on personal loans and launching a new offer to woo more credit card customers.

The bank today cut the variable interest rate on unsecured personal loans by 1.51 percentage points to 11.99 per cent, and launched a zero per cent balance transfer for 15 months.

NAB has the smallest market share in credit cards of the big four banks, and the move suggests it is eyeing expansion in the higher-margin unsecured lending market.

It comes after the big four banks have lifted their share in the credit card market over 2013, despite consumers remaining reluctant to take on unsecured debt. Recent analysis from Finder.com.au said the big four banks had increased their share of of the credit card market by 1 percentage point in the year to November, giving the majors 84 per cent of the market.

However, a survey from Veda published today suggested households remain wary towards personal loans and credit cards.

Reader 'mitch of ACT' has done some numbers crunching and comes up with an interesting stat (well, for some):

Here's some information the statistical pedants on here might find useful. Since 1/7/13 the AllOrds has gone up 532 points. The breakdown by day of the week is:

Mondays (103)
Tuesdays 212
Wednesdays (248)
Thursdays 349
Fridays 322

People on here have said that Mondays are not good days and they are right.

We'd like to suggest a follow-up, mitch: is there a correlation with sunny/rainy days?

<p>

Interesting graphic doing the rounds on Twitter (courtesy of @DonallGeoghegan) showing the proportion of CO2 emissions by country, and that there are two main culprits around (no surprise there).

More to come on the implications of climate change for investors. Stay tuned.

Japanese shares are up, with the Nikkei rising 1 per cent, amid the start of the Bank of Japan’s two-day policy meeting and as a weaker yen boosts exporters.

‘‘As the Bank of Japan meeting starts today, investors will be watching whether they raise their outlook for the economy and consumer prices,’’ says Toshihiko Matsuno, a strategist at SMBC Friend Securities, a unit of the country’s second-largest lender. ‘‘With earnings season about to begin in earnest, we’ll see a lot of buying in anticipation of companies posting strong results.’’

More than 520 companies on the Topix report earnings next week, with about 640 posting results the period after, according to data compiled by Bloomberg.

Mortgage demand is up 15.3 per cent year-on-year for the fourth-quarter, a sharp rise from 9.3 per cent in the previous period, research compiled by a private data analytics firm shows.

The increase in queries was driven mostly by older Australians, credit bureau Veda said in a report released today.

The new figures reinforce official data showing that first-home buyer activity as a proportion of total borrowers fell to a record low in November amid growing investor activity.

"We saw a further shift to mortgage applications from older demographics, with more first home buyers leaving the market," Veda's general manager for consumer risk, Angus Luffman, says:

  • An extended period of low interest rates is supporting the lift in mortgage enquiries, which have stepped up a level and are now showing the strongest growth since late 2009.
  • It is likely that we will see a continuing increase in the near term, along with sustained house price growth.
<p>

We'd like to give yesterday's poll on our starting time another run. It seems a clear majority is shaping in favour of an earlier start, but we do want to make sure before we reset our alarm clocks...

A question for our readers: what time should the Markets Live blog start each morning? Please take a moment to answer the poll.

Right now, we're starting the blog at 9.30am, but in the past we've had a few readers asking us to start a bit earlier. Before we throw any of our scarce capacity at an earlier starting time, we'd like to make sure there's enough reader interest to justify hassling our bosses.

Poll: What time should the Markets Live blog start?

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  1. Please select an answer.
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9.30am is fine; gives me enough time ahead of the market's open.

37%

9am would be better; I'd prefer more time for preparation (and comments)

35%

Even earlier than 9am (if possible)

20%

Don't care

8%

Total votes: 736.

Would you like to vote?

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Poll closed 24 Jan, 2014

Disclaimer:

These polls are not scientific and reflect the opinion only of visitors who have chosen to participate.

Short seller ... Jim Chanos

Short seller ... Jim Chanos

After years of hiding under their desks, short sellers are re-emerging - slowly, Reuters notes.

Investors who make a living betting that stock prices will fall are happy to forget 2013: Credit Suisse's index of hedge funds with a dedicated short bias lost 25 per cent as global stock markets soared.

Buying the most heavily shorted stocks was a much better bet than the S&P 500: a list of top shorted stocks from SunGard's Astec Analytics beat the S&P 500 by 26 percentage points on average last year.

But with the Federal Reserve beginning to cut back on its bond buying - in a withdrawal of the stimulus that underpinned the rally - there's hope for short sellers in 2014.

Jim Chanos, president and founder of Kynikos Associates and one of the most prominent short sellers, says the market is primed for people like him and as a result he has gone out to raise capital.

"Now I think is not a bad time to be raising capital for what we do. When we got a rough going in the mid-90s, that was exactly the time to raise capital," Chanos says, adding it was better to do this when critics viewed him as "like the village idiot and not an evil genius."

Don Steinbrugge, chairman of Agecroft Partners, a global consulting and third party marketing firm for hedge funds, says "long/short" equity - a strategy betting both on and against stocks - will see the most demand among all hedge fund strategies this year.

Long/short equity represented more than 40 per cent of the hedge fund industry assets before 2008. The sector then experienced large outflows to other hedge fund strategies including commodity trading advisers (CTAs) and various fixed income-oriented strategies.

Its market share of industry assets bottomed out at approximately 25 percent in the beginning of 2013. "Last year saw this trend reverse, and we expect very high demand for long/short equity in 2014," Steinbrugge says.

 

A surge in global share prices combined with a sharp fall in the value of the Australian dollar helped superannuation funds record their second-best performance last year since the introduction of compulsory contributions in 1992.

The average balanced scheme posted a 17.5 per cent gain, with the top-performing fund – the REST Core vehicle – returning nearly 20 per cent, a survey from research firm Chant West showed.

Behind the stellar performance was a 19.7 per cent gain in Australian shares and a 48 per cent gain in unhedged international shares. The sharp rise recorded by international shares was in part thanks to a fall in the Australian dollar to $US0.89 from $US1.04.

Half of the top 10 performers last year were industry super funds. Telstra Super was the top-performing corporate fund, recording a 19.3 per cent return, while retail providers Aon, MLC, JANA and AMP also had products in the top 10. Supers’ best annual performance came in 1993, one year after compulsory contributions were introduced.

Ahead of the Reserve Bank of New Zealand's meeting next Thursday, apart from the inflation figures out today, the central bank will also get a gauge of manufacturing activity through the BNZ-BusinessNZ Performance of Manufacturing Index, which will be published this Thursday.

The economic figures are key as the RBNZ is expected to be the first major central bank to raise interest rates this year. And as BK Asset Management managing director Kathy Lien points out, by mid-2016, New Zealand's cash rate is expected to raise from its current level of 2.5 per cent to 4.75 per cent.

So what is this important for the Australian dollar? The divergent trajectory of the RBA and RBNZ's moves, with the Reserve Bank expected to maintain an easing bias as it waits for the non-mining sectors to fill the growth gap left by a fall-off in resources investment, is expected to weigh on the Australian dollar.

The weakness in the Australian-New Zealand dollar cross rate is in turn weighing on the Australian-US dollar exchange rate. A weaker exchange rate is something the Reserve Bank has been calling for, as it prefers a lower Australian dollar, rather than further rate cuts, to drive growth in the economy.

 

As we noted yesterday, the US sharemarket’s “fear index”, the Vix, is at very low levels, suggesting investors are relaxed and comfortable in early 2014. Also, money is pouring out of bond funds and into equity funds. Now several commentators have been pointing out how long it is since global equity markets last experienced a correction of 10 per cent.

This from Societe Generale analysts:

It has been 408 days since the last 10 per cent correction in the MSCI World index (see below), the 8th longest period on record. However, simply not having a correction for a long time does not necessarily imply impending doom for equities; we find no relationship between time since correction and future returns.

Nonetheless we still worry how in these times of interconnected asset markets and mark-to-market risk modelling, such extended runs can hide the real volatility in equity investing. In brief it can lead to excessive risk taking. Perhaps this was also on the Richard Fisher's mind from the Dallas Federal Reserve when he pointed out that QE could be causing investors to wear beer goggles.

 

It's been over 400 days since global sharemarkets had a collective 10 per cent correction.

It's been over 400 days since global sharemarkets had a collective 10 per cent correction.

The Australian dollar has shed almost two cents against the New Zealand dollar over the past day, after new inflation data from the dairy powerhouse showed that consumer prices shot up in the fourth quarter of last year.

The Australian dollar, which squeezed up higher against the New Zealand dollar yesterday, reaching US107.06¢, fell to US105.74¢ this morning. The Australian-New Zealand dollar cross rate is at eight-year lows.

The stronger inflation figures leaves the door open for the Reserve Bank of New Zealand to raise the cash rate at its meeting next week. New Zealand's cash rate, like Australia, stands at 2.5 per cent.

"It's fuelled speculation that the RBNZ are looking to hike rates at some point. Having said that, CPI in New Zealand is still below what it is in Australia. Aussie-Kiwi is now getting closer to the multi-decades lows," Rochford Capital's director Thomas Averill said.

"You could see it test NZ105¢, maybe have a dip down ... towards NZ104¢. I think you are not going to see much lower than that in the Aussie-Kiwi pair."

 

As expected, investors have reacted to the biggest single fall in the iron ore price this year, selling down a range of miners exposed to the bulk commodity. The metal's has dropped almost $US10/tonne in 2014, to $US124.8.

Atlas Iron was the worst hit among the top 200 stocks, down more than 5 per cent, followed by Fortescue Metals, which was down 3.5 per cent.

Rio Tinto is now down 1.2 per cent to $65.70 a share.

On the other side of the ledger, uranium miner Paladin Energy is the best performing stock this morning, followed by G8 Education and Treasury Wine Estates.

This morning's best and worst

This morning's best and worst

The Australian energy sector has felt the effects of investor apathy, reckon analysts at Standard Life Investments.

The industry is investing heavily in liquefied natural gas (LNG) processing infrastructure, prompting concern about potential delays and cost overruns. This has meant the sector has been overlooked, leaving many companies undervalued for the potential growth we believe they still offer.

We favour Oil Search in particular, believing it should outperform as it delivers on its investments. Indeed, its recent Papua New Guinea project update revealed it is 90 per cent complete – exactly the type of trigger that we expect will give investors greater certainty on the deliverability and production growth associated with this new capacity.

Investors also appear to underestimate the impact this expansion will have on gas prices. Currently, almost all domestically produced gas is consumed domestically, meaning new output will be sold at higher overseas prices.

We are particularly positive on the prospects for gas and utility firm Origin, as arbitrage should mean Australian prices converge with those overseas in the medium term.

 

With no lead from Wall St (it was a public holiday in the US) the local market (S&P/ASX 200) has meandered down 0.3 per cent in early trading to 5280.

Rio Tinto is down 1.3 per cent, and metals and mining stocks are leading the market lower as iron ore prices eased overnight.

Across the sectors, gold miners look ready for another good day, up 0.7 per cent, and health care is also recording early gains, up 0.4 per cent.

 

Over in New Zealand, annual inflation rate accelerated in the fourth quarter, underpinning the Reserve Bank of New Zealand’s case to start raising interest rates this year.

Consumer prices rose 1.6 per cent from the year-earlier quarter, the fastest annual pace since early 2012. Prices gained 0.1 per cent from the third quarter. Economists expected annual inflation of 1.5 percent and a quarterly drop of 0.1 per cent.

Faster inflation, rising business confidence and soaring house prices add to signs the RBNZ will raise the official cash rate from a record-low 2.5 per cent before the end of the first quarter.

New Zealand’s currency has gained as investors bet the central bank will be among the first in the developed world to increase borrowing costs.

‘‘Domestic inflation pressures are gradually re-emerging, but the RBNZ will have time to respond at a measured pace,’’ Michael Gordon, senior economist at Westpac in Auckland, said ahead of the data.

New Zealand’s dollar rose after the report, buying 83.01 US cents from 82.61 cents before the release. The Australian dollar fell about 1 cent to $NZ1.0595.

A piece that is doing well this morning is this one on the uneven distribution of wealth (which is one of the key themes in Davos, where the World Economic Forum kicks off tomorrow):

Eighty-five people control the same amount of wealth as half the world's population. That is 85 people compared with 3.5 billion.

A new report from Oxfam has been published in time for the World Economic Forum in Davos this week. It shows the world's ultra-wealthy have not only recovered from the global financial crisis, they have positively blossomed.

The report shows the wealth of the 1 per cent richest people in the world is worth about $US110 trillion, 65 times the total wealth of the bottom half of the world's population.

It also shows the world's richest 85 people control about $US1.7 trillion in wealth, equivalent to the bottom half of the world's population.

Who are the richest of the rich? Here's a useful list by Bloomberg

Get rich faster ... <i>Source: Oxfam</i>

Get rich faster ... Source: Oxfam

Here's the Warrnambool Daily (one of the last editions, as Saputo is edging closer to success):

Canadian dairy giant Saputo is nearing a majority holding in Warrnambool Cheese and Butter but must still convince investors with over 2 per cent of the company to accept its $533 million takeover offer by Wednesday evening to receive an extension on the bid.

Saputo said today that acceptances of its bid for WCB had reached 47.85 per cent. So long as the company reaches 50 per cent by tomorrow evening, it will receive an automatic two-week extension on its bid, in line with legislation governing takeovers.

Sources close to the deal have told The Australian Financial Review that some hedge funds are close to accepting Saputo’s bid.

The three-way bidding war for WCB has lasted four months and involved many of the region’s dairy players.

Iron ore is down $US10 per tonne since the start of the year and is trading around $US124.80 after falling nearly 2 per cent overnight. It is now below the trading range it's been in since the middle of last year.

That puts the focus on the materials sector today, particularly the iron ore ‘'pure plays’'.

However, IG's Evan Lucas notes that BHP is likely to continue to push ahead having closed at $38.00 yesterday, with its ADR pointing to a further nine cents to be added despite the fact iron ore has fallen:

  • The bearish calls on iron ore are growing and that is only expected to get louder as China continues to stock pile the raw material and record production numbers flood the market.
  • The reason for the run-up in BHP is likely to be two-fold, one: the China data from yesterday was supportive and two: BHP’s fourth quarter production numbers are due tomorrow pre-market.

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

Your blog pilots today are Jens Meyer and Patrick Commins.

This blog is not intended as investment advice.

BusinessDay with wires.

 

The Australian market looks set to open lower after a mixed and lacklustre performance on international markets with Wall Street closed and China turning in disappointing growth data.

Iron ore miners may experience some pressure after the price of the commodity slumped another 2 per cent overnight.

What you need2know:

  • SPI futures down 7 points at 5249
  • The AUD has risen to 88.2 US cents, 91.9 yen and 65.07 euro cents
  • Wall St was closed for the Martin Luther King Jr holiday
  • In Europe, Eurostoxx -0.93 , FTSE100 +0.11%, CAC -0.11%, DAX -0.28%
  • Spot gold was flat at $US1254an ounce
  • Brent oil slipped to $US106.35 per barrel
  • Iron ore fell 2 per cent to $US124.80 per tonne

ANZ notes:

It was a very quiet session overnight with US markets closed for the Martin Luther King Holiday. Overall, European equity markets were a touch softer, while core and peripheral European bond yields declined marginally. In currency markets, AUD/USD traded modestly higher overnight to around 0.88.  Iron ore declined a further 2.0% to USD124.8 per tonne – its lowest level since July 2013.

Read more in this morning's need2know

 

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  • Regarding the most affordable places to live, who really wants to live in any of the cities coloured green? Detroit for example!

    Commenter
    MelbMan
    Location
    Date and time
    January 21, 2014, 4:34PM
  • RE: least-affordable housing markets in the world

    The Gold Coast won't be making that list. Prices here have fallen 50%-60% below 2010 prices! lmao!

    Commenter
    Gordon Akman
    Location
    Broadbeach
    Date and time
    January 21, 2014, 4:19PM
  • Contrarian claims the 5 year asx total returns is more than 10% pa.

    $1,000 Coles voucher to whomever can verify that claim?

    LOL

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 4:11PM
    • When god was giving out financial literacy skills he was busy going back for seconds in the "anger" queue LOL

      Commenter
      Teacher
      Location
      Taylors Lakes Primary
      Date and time
      January 21, 2014, 4:29PM
    • That's your monthly entitlement, don't give it away...
      Will that pledge be as firm
      As you promising to provide proof of all your trades??? ROFLMAO

      Commenter
      Gee up
      Date and time
      January 21, 2014, 4:43PM
    • Where's the contract note you promised spanky? You only had to post one. Where is it?

      You claimed you made more than one trade with one contact note and revealed that you have no idea.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:57PM
    • Since Allan failed to notice that the previous info he posted was dated 31 July 2013, here's a more up to date version of the same fund's performance showing that the 5 year annual accumulation index return to 31-Dec-2013 is actually 12.47%:

      http://www.spdrs.com.au/etf/
      fund/fund_detail_STW.html

      Commenter
      Bob
      Location
      Date and time
      January 21, 2014, 5:11PM
    • It was posted, not my fault you can't understand it...
      So much anger....
      Hehehe all the way to the bank.

      Commenter
      Gee up
      Date and time
      January 21, 2014, 5:11PM
  • Credit Suisse identify FMG as a share that bond holders might like - on a day it falls 5% after China reveals the slowest growth in 14 years.

    DOH!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 3:24PM
    • Well I am happy to hear what they say because I went long at $3.75 when you shorted it at the same price...you must be hurting, surely!

      Commenter
      Dewf Hart
      Location
      Date and time
      January 21, 2014, 3:44PM
    • I bought a few years ago at 5c, sold at $12. See I can make up trades too.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 3:58PM
    • Everybody knows that Allan. You'd be broke otherwise. When are we hitting 2500? Only more than 100% wrong at the moment.

      Commenter
      Contrarian
      Location
      Date and time
      January 21, 2014, 4:03PM
    • Let's take a poll on how many here think Allan is a clown. He seems to create many enemies online, wonder whether he does this in the real world.

      Commenter
      Lee Vendi
      Location
      Sth Yarra
      Date and time
      January 21, 2014, 4:07PM
    • Still waiting for proof of any trades........
      Crickets

      Commenter
      Gee up
      Date and time
      January 21, 2014, 4:10PM
    • Stop embarrassing yourself Contrarian. Mr 3% and now Mr 10%.

      You can't even master simple arithmetic.

      What's the 5 year accumulated index return for the ASX again?

      Remember when you couldn't calculate simple equity? You disappeared for a year after that one. On a cruise wasn't it? He he....

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:15PM
    • Seems like Contrarian got onto your brain Allan ? You even counted day that he disappeared. You aren't one of his fan, are you ?

      Commenter
      Hugo
      Location
      Date and time
      January 21, 2014, 4:26PM
    • Welcome to the blog Lee Vendi and thanks for reading all my posts and being a fan. No, there is only one newbie posting under many screen names, Contrarian, Gee up, Which Bank etc,

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:29PM
    • "You even counted day " Huh?

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:41PM
  • More on the pollution problem in the NYTimes
    The latest paper explores the environmental consequences of interconnected economies. The scientists wrote that “outsourcing production to China does not always relieve consumers in the United States — or for that matter many countries in the Northern Hemisphere — from the environmental impacts of air pollution.”

    The movement of air pollutants associated with the production of goods in China for the American market has resulted in a decline in air quality in the Western United States, the scientists wrote, though less manufacturing in the United States does mean cleaner air in the American East.

    http://www.nytimes.com/2014/01/21/world/asia/china-also-exports-pollution-to-western-us-study-finds.html?hp

    Commenter
    Dave
    Location
    Brisvegas
    Date and time
    January 21, 2014, 3:14PM
  • "Despite a relatively patchy domestic economy, Australia’s household debt-to-income ratio ceased falling a year or so ago, and has since been glacially drifting higher."

    Yep and therefore household debt is still up @ 150% of income, unemployment is rising, the resources boom is over, casualisation of the workforce is increasing and mega mortgage mugs are trapped.

    I like it!

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 3:06PM
    • I agree with you 100% Allan. However our politicians are also 100% committed to the bubble and will sacrifice everything and everyone to ensure it remains. I've just bought a 400k place in a regional coastal town, positively geared. I'm embarrassed and ashamed but can't watch while prices continue rising..... They will.....200k immigrants a year and Sydney and Melbourne can't breathe, while government doesn't have the money for infrastructure. I'm expecting an announcement any day now where foreigners can buy a visa for $10m.

      Commenter
      JohnBB
      Location
      Date and time
      January 21, 2014, 3:33PM
    • We'll just sell house amongst each other and we'll all get rich! Brilliant!

      Commenter
      Pete
      Location
      Perth
      Date and time
      January 21, 2014, 3:53PM
    • Allan,
      Private debt is very much under control:
      See http://www.businessspectator.com.au/article/2013/8/5/economy/whos-responsible-australias-debt-crisis

      secondly, 150% debt to disposable income is been fairly stable now for 6 years.
      See:http://www.switzer.com.au/the-experts/shane-oliver/debt---how-does-australia-compare/

      Commenter
      Econorat
      Location
      Sydney
      Date and time
      January 21, 2014, 4:15PM
    • That must be why FHB's have deserted the market huh?

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:31PM
    • Oh and you've posted an article by Steve Keen who believes household debt is out of control lol.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:33PM
    • And the FIRE sector is hinged on writing more Debt....And debt that can't be paid won't be paid.... Bad loans blow out bit by bit....
      Think the pollies n PS HoD are shitting bricks? hello RBA hi Treasury.
      You guys holding IP's too??
      How's that Genworth float going?

      Commenter
      mushy
      Location
      Date and time
      January 21, 2014, 5:00PM
  • "Aussie dollar’s slide helps fuel a stellar year for superannuation returns

    Behind the stellar performance was a 19.7 per cent gain in Australian shares and a 48 per cent gain in unhedged international shares."

    Yes US stocks were on fire last year. Then the AUD fell 17% so you got a MASSIVE out performance on your international stocks then another 17% if you got on when the AUD was around US$1.03.

    I laugh when I think of the sad trolls on here who think the only investments in the world are the big four Australian banks, BHP, RIO, Telstra, Coles, Woolies and Australian property where you borrow hundreds of thousands of dollars to claim a loss with the ATO.

    Commenter
    Gordon Akman
    Location
    Broadbeach
    Date and time
    January 21, 2014, 2:45PM
    • I've long entertained the idea of investing overseas. But I am so lazy that I just couldn't be bothered going into the bank to show them my ID etc.

      Does anyone know of a platform for investing overseas where this tedious process isn't required? Or will I have to get up out of my chair?

      Commenter
      Fred
      Location
      Date and time
      January 21, 2014, 3:14PM
    • "Does anyone know of a platform for investing overseas where this tedious process isn't required?"

      No Fred. All companies have to comply with Australian banking and money laundering laws. If it's an overseas company they need to get an appropriate Australian Financial Services licence to offer their services to Australians. So applications/opening an account is just the same for any Australian provider of financial services.

      Why is providing relevant documentation to open a brokerage account such a big deal to you? That's really sad (for you).

      Commenter
      Gordon Akman
      Location
      Broadbeach
      Date and time
      January 21, 2014, 3:37PM
    • Fred, I use OptionsXpress to buy US shares. However you're going to have to get out of your chair to get a certified copy of ID signed to set up your account. I think if you open a new financial account anywhere you'll have to show your ID due to anti-money laundering laws.

      Commenter
      gratorn
      Location
      MEL
      Date and time
      January 21, 2014, 3:40PM
    • My tongue was possibly slightly in cheek Gordon, I should be able to manage a trip to the bank.

      High on my list are JP Morgan (I don't like them, but they know how to make money) and Google (whose recent acquisitions - robotics, the 'internet of things' etc - make them seem to me like a company of the future)

      Commenter
      Fred
      Location
      Date and time
      January 21, 2014, 3:59PM
    • @Fred have a look at Interactive Brokers. They are voted cheapest/best most years by Barrons. You can trade Australian stocks for as little as $6 and US stocks for as little as $1.

      However, sorry to say, but you missed the boat. US stocks have already run up very hard and the AUD has fallen 17%. Maybe better luck next time.

      Commenter
      Gordon Akman
      Location
      Broadbeach
      Date and time
      January 21, 2014, 4:17PM
  • "Long CDA @ 63c, worth a punt,"

    Where is it?

    Commenter
    Fact Checker
    Location
    Date and time
    January 21, 2014, 2:36PM
    • It was a 70% return..
      You ok Allan?

      Commenter
      Gee up
      Date and time
      January 21, 2014, 4:45PM
    • Mr Spanky you were caught red handed lying. Poor thing.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:58PM
  • PALADIN: PDN

    Alan "one for ASIC methinks" Kohler should be having a good look at the afternoon Paladin PDN trading. So should ASIC.

    Commenter
    ALittleToTheRight
    Location
    Date and time
    January 21, 2014, 2:35PM
    • Why?

      Commenter
      Waiting
      Location
      A-town
      Date and time
      January 21, 2014, 3:21PM
  • The market only needs to go up:

    ((6851 * 1.15 * 1.2)-5337)/5337=77%

    +77% and it's a new bull market!

    Hurrah!

    We've been waiting for the bear trap for nearly seven years now.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 1:36PM
    • Lol. The share market has returned an average of about 10%pa over the last ten years. Even better using a 5 year time frame. Are we at 2500 yet?

      Commenter
      Contrarian
      Location
      Date and time
      January 21, 2014, 2:32PM
    • @Contrarian get back to class and pay closer attention!

      Commenter
      Teacher
      Location
      Taylors Lakes Primary
      Date and time
      January 21, 2014, 2:37PM
    • Your figures are dodgy. Post the proof.

      When you work out how to calculate 3% get back to me. He he...

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 2:39PM
    • "Even better using a 5 year time frame".

      Try 5%....

      http://www.spdrs.com.au/etf/fund/ref_doc/Monthly_Performance_Summary_OZR.pdf

      And that doesn't include inflation or the companies that have blown up and have been removed from the ASX 200.

      Try again mr 3%. LOL

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 3:00PM
    • Teacher if you don't know that I hope you never teach my kids. I expect it from Allan.

      Here you go Allan http://www.smh.com.au/money/investing/returns-of-the-decade-20130205-2dvgm.html

      Up until the start of last year it was the best performing asset class (9.1% ie about 10%)and that doesn't count the fact that 2013 was a stellar year (except for yourself). I couldn't open that link but you are probably confused and looking at international indices.

      #anotherallanfail

      Commenter
      Contrarian
      Location
      Date and time
      January 21, 2014, 3:57PM
    • You assume that everyone has been long since the dawn of time.. It's obvious you were burnt badly during the gfc and stubbornly pretend to short 90% of your trades in the hope that they will retest gfc levels. What about those who bought the banks at a fraction of their price or the miners or just about any other stock you'd like to mention. What are their returns?
      Stop talking rubbish, your ignorance is amusing.

      Commenter
      Assumption
      Date and time
      January 21, 2014, 4:00PM
    • Assumption, Allan probably missed the 2003-2007 bull run and got caught up in FOMO and went long. He then probably sold everything and went short in March 2009. He can't believe that people have actually made millions from the stockmarket.

      Commenter
      Contrarian
      Location
      Date and time
      January 21, 2014, 4:06PM
    • "

      "Even better using a 5 year time frame".

      Nope, 5% for the ASX 200 accumulation index. Half what you are claiming.

      #ContrarianFailsAgain

      Oh and S&P is a foreign company newbie.

      Oh and #newscreennameeverytime why don't you stick to one screen name? Is it because you make so many dumb statements and are picked up every time?

      ROFLMAO!

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:09PM
    • "You assume that everyone has been long since the dawn of time."

      No you assume that. Stop making assumption about people you don't know.

      Oh and thanks for being a fan. ROFLMAO!

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:17PM
    • @Contrarian the high for the ASX 200 was around 6800 nearly 7 years ago. Many of the stocks from back then failed and were de-listed (i.e. all/nearly all the money invested in those stocks by investors was lost). So even though you've had more companies added and more capital raisings from the companies already in the index we're still only back to around 5300. It's not one of the more complex subjects we teach here at Taylors Lakes Primary...

      Commenter
      Teacher
      Location
      Taylors Lakes Primary
      Date and time
      January 21, 2014, 4:27PM
    • "Allan probably "

      LOL you can't handle simple arithmetic, leave probability to the experts.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:35PM
  • Gina Rinehart's wealth exceeds the GDP of several small nations.......funny, so does her greed!

    Commenter
    Mark
    Location
    Melbourne
    Date and time
    January 21, 2014, 1:35PM
  • lost count of how many times i've been belted by china making "out of the blue" announcements.

    Commenter
    J.
    Location
    Syd.
    Date and time
    January 21, 2014, 1:14PM
  • Bear trap is counting my posts.

    +1

    he he....

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 1:00PM
    • You're still posting
      -100 for everyone on here
      Lol

      Commenter
      Bear trap
      Date and time
      January 21, 2014, 1:14PM
    • Bear trap is massively damaged! LOL

      Commenter
      Regular Guy
      Location
      Date and time
      January 21, 2014, 1:15PM
    • You ok gee up?

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 1:33PM
    • zzzzzz....zzzzzzzzz...zzzzzzzzzzzzzzz

      Commenter
      no banks .. no party!
      Location
      boring
      Date and time
      January 21, 2014, 2:03PM
  • US futures +57

    Commenter
    It's All About Making Money
    Location
    Lennox Head
    Date and time
    January 21, 2014, 1:00PM
    • I presume that would account for the jump in the ASX at 12.30. Good time to buy for a short term trade tomorrow or trap for young players?

      Commenter
      "P" Plater
      Location
      Tassie
      Date and time
      January 21, 2014, 1:17PM
    • Unfortunately the US often goes against its future predictions....but not always.
      I often believe it tries to psych the rest of the world into thinking it is going one way and then does the opposite.
      However after a long weekend the US market participants may be ready to recommence the upside?
      Aus. has not been following the US closely lately anyway.
      We have to trade whatever market comes along in my opinion.

      Commenter
      It's All About Making Money
      Location
      Lennox Head
      Date and time
      January 21, 2014, 1:39PM
  • The problem with representing the proportion of CO2 produced by country is that it doesn't show where that CO2 is consumed. In some wealthy countries, >30% of CO2 emissions when accounted for on a consumption basis are imported from, guess where, China and developing countries.22.5% of China's emissions were exported overseas, while USA imported an extra 10% or so over what they produced.
    http://www.pnas.org/content/early/2010/02/23/0906974107.abstract

    Commenter
    Dave
    Location
    Brisvegas
    Date and time
    January 21, 2014, 12:43PM
  • "We saw a further shift to mortgage applications from older demographics, with more first home buyers leaving the market," Veda's general manager for consumer risk, Angus Luffman,"

    Pyramid schemes are reliant to those at the bottom entering at ever increasing rate. I think the fat lady is warming up for the Opera that is Aus housing.

    Read more: http://www.smh.com.au/business/markets-live/markets-live-stocks-claw-back-losses-20140121-315in.html#ixzz2qzULuUCO

    Commenter
    DJ77
    Location
    Sydney
    Date and time
    January 21, 2014, 12:08PM
    • Yes there are a lot of older Australians who think property prices are going to triple again like they did between the late 90s and 2010. The problem is though household debt rose 350% during that same period. Another tripling of prices on the back of another tripling of household debt doesn't seem likely to anyone with even basic financial literacy does it.

      Commenter
      Basic
      Location
      Financial Literacy
      Date and time
      January 21, 2014, 12:31PM
    • Let's just hope the Australia that rises from the ashes of this bubble isn't full of property sociopaths.

      Commenter
      Pete
      Location
      Perth
      Date and time
      January 21, 2014, 1:31PM
  • I vote for even earlier than 9:00 start to blog. If I have to start at 7:00, so should the EDs! My moto is "if you feel miserable , so should everyone else ! " :)

    Commenter
    DJ77
    Location
    Sydney
    Date and time
    January 21, 2014, 12:05PM
  • RE: Poll: What time should the Markets Live blog start?

    I live on the Gold Coast and don't wake to an alarm clock. I wake up when I feel like it, have a coffee, and ease into the day as it suits me. Your blog starts half an hour before the market opens. Why would you need to start earlier than that? lol If people want to wake up early and desperately collate information about a small market like Australia and then try and quickly get trades on thinking they are going to outperform super computers that trade fractions of seconds after news breaks let them do that by themselves.

    Commenter
    Gordon Akman
    Location
    Broadbeach
    Date and time
    January 21, 2014, 11:59AM
    • I never really see too many comments submitted betweeen 9.30 and 10am anyway.

      I say let the journos get an extra half an hour sleep/breakfast time rather than making them start earlier for little benefit.

      Commenter
      Basic
      Location
      Date and time
      January 21, 2014, 12:28PM
    • Maybe Gina's clamping down on journo's o/time , I hear media wages in South Africa are on par with mining.

      Commenter
      9.30's cool
      Location
      illawarra
      Date and time
      January 21, 2014, 1:44PM
  • 2014 - Year of the AUD/NZD Parity.
    The year Australia rediscovers some old chestnuts - 'Pacific Peso' from the 'Banana Republic' (everything old is new again)

    Commenter
    Pete
    Location
    Perth
    Date and time
    January 21, 2014, 11:41AM
  • I think 'socialist convert's comment is a bit ridiculous, I despise the Chinese government. Ask the Tibetans if you want a gauge of their rule.

    BUT I understand his anger!

    85 people being as wealthy as 3.5 billion people! We live in a sick, corrupt, rigged system.

    There is class warfare being waged alright. But it is the ruling class fighting the war, not the working class!

    Commenter
    Fred
    Location
    Date and time
    January 21, 2014, 11:35AM
    • Thanks Fred, at least you understand...

      Commenter
      Socialist Convert
      Location
      Sydney
      Date and time
      January 21, 2014, 12:02PM
  • Here's some information the statistical pedants on here might find useful. Since 1/7/13 the AllOrds has gone up 532 points. The breakdown by day of the week is:
    Mondays (103)
    Tuesdays 212
    Wednesdays (248)
    Thursdays 349
    Fridays 322
    People on here have said that Mondays are not good days and they are right.

    Commenter
    mitch of ACT
    Location
    Date and time
    January 21, 2014, 11:31AM
    • Yes, I am one who finds Monday a sort of nothing day, even if there are relatively strong leads from the US we can still fall in the red at the close on Monday.

      I am surprised that the ASX has gone up 532 points, if I believed the comments from the doomsayers on here we should be around 3300 by now.

      Commenter
      Abraham Lincoln
      Location
      Prahrean
      Date and time
      January 21, 2014, 12:06PM
    • To the editors, I could probably say whether there is a correlation between sunny & rainy days but only for my local area. Just by chance I do have those records as well thanks to monitoring my roof-top solar production. However it can be rainy in Perth & sunny in Sydney and variable in between so wouldn't tell you anything useful really.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 12:27PM
    • Now just to get you all really excited I have the day of the week breakdown from 2/7/12 to yesterday: The AllOrds improved by 1172 over that period.
      Monday (118)
      Tuesday 432
      Wednesday 250
      Thursday 14
      Friday 594
      Mondays still don't look good but of course that's a buy signal. And just as well there are a few less Mondays in the mix due to more public holidays on a Monday.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 12:49PM
    • Just remember Gina, you can't take it with you, no matter what your Trust agreement may say.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 1:23PM
    • I like your calculations but there is a slight error in one of your posts. The NSW/Act June and October long week-ends are not Australia wide and the market is open those days. In 2013, Christmas/Boxing day was a Wednesday/Thursday, New Years was a Wednesday, and Anzac day was a Thursday. In 2012, Christmas was Tuesday/Wednesday, with New Years on the Tuesday. Australia day in 2013 was a Monday. Australia wide public holidays including Easter (where the market is a closed):
      Monday: 2
      Tuesday: 3
      Wednesday: 3
      Thursday: 2
      Friday: 1

      The most likely explanation for the average ups and downs is Wall Street. If Friday night’s session is not good, people sell out on the ASX on Monday in anticipation of a further Monday night Dow sell-off. Often it’s not as bad as people thought, so they see some safety and bargains on Tuesdays.

      Commenter
      Calculator
      Location
      Date and time
      January 21, 2014, 1:42PM
    • @Calculator, I have calculated the incidence of days. From 2/7/12 to 20/1/14 there were 395 trading days. There were 79 Mondays, Tuesdays & Thursdays, 78 Wednesdays & 80 Fridays. The pretty even spread surprised me.
      Most of the time the ASX seemed to slavishly follow the Dow but there was a period a few months back where the Dow followed the ASX which in turn took its lead from Asian markets. But for now we seem to be back following the Dow.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 2:28PM
    • Mitch Good work Love it Show more of it please.

      Commenter
      Jonaze
      Location
      Sydney
      Date and time
      January 21, 2014, 4:58PM
  • "Things are even worse than Greece in China when it comes to the potential of a systemic risk crisis. Government-owned banks lend money directly to government owned corporations, which usually perform a great deal of welfare activities; and to land developers, who are behind the country’s property bubble, and the robust economic growth associated it."

    http://www.forbes.com/sites/panosmourdoukoutas/2014/01/20/the-sum-of-all-risks-why-china-is-heading-for-a-greek-style-crisis-on-a-grand-scale/

    Slowest GDP growth in 14 years and the elite are still pouring billions into empty flats.

    The 99% are getting very angry.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 11:21AM
  • OZL continues to prevail of late. I read recently that it had been heavily shorted and this current upward trend may be attributed to a "short squeeze". Hope they keep squeezing...

    Commenter
    "P" Plater
    Location
    Tassie
    Date and time
    January 21, 2014, 11:19AM
    • OZL is a stock that was $17 and is now $3. Who do you think got "squeezed" on that one? People who went long or people who went short? lol

      Commenter
      Neutral
      Location
      Analyst
      Date and time
      January 21, 2014, 11:24AM
  • NCM long +32%
    SBM long +25%
    PDN long + 20%

    NAB?
    zzzzzzzz.....zzzzzzzzzz...zzzzzzzzzzzzzzzzzzzzzzzzzz

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 11:14AM
    • A whole day yesterday without unsubstantiated trades... Knew it was too good to be true...
      Prepare readers for nearly 100 comments today

      Commenter
      Bear trap
      Date and time
      January 21, 2014, 11:47AM
    • wow!

      Commenter
      no banks .. no party!
      Location
      don't fight it
      Date and time
      January 21, 2014, 11:49AM
    • It's great to be back from an extended break and still seeing Allan post trades with no confirmation...
      Some things will never change.
      Oh yeah, how's your mqg short and CDa up 70%. Makes all your "trades "combined look silly....
      ROFLMAO...

      Commenter
      Gee up
      Date and time
      January 21, 2014, 1:17PM
    • "It's great to be back from an extended break"

      An extended break from what? The internet? Reading online news sites? Try harder...

      Commenter
      Nobody's
      Location
      Fooled
      Date and time
      January 21, 2014, 2:10PM
    • First post and already babbling about me. I'm fascinating. You ok gee up?

      Where's Contrarian to show us all how to calculate 3%????? He he....

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 2:32PM
    • Allan hates when people are successful. It shows how silly he is...
      Hehe.
      I believe your first post mentioned me too... Something about being spanked... I'm not into that but I'm sure your other internet friends might be...
      " bring out the gimp"
      Hehe

      Commenter
      Gee up
      Date and time
      January 21, 2014, 4:02PM
    • Right here Allan. I need you to show me how to post losing trades and then forget that I ever posted them

      Commenter
      Contrarian
      Location
      Date and time
      January 21, 2014, 4:09PM
    • Aww... fellas, you both don't have a single brain cell between you. And it shows. ROFLMAO!

      Mr Spanky and Mr 10%. What a pair.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 4:37PM
    • Proof of any trades.... Something tangible. Or will you keep dodging the question with attempted insults????
      ROFLMAO
      Too easy to stir big al

      Commenter
      Gee up
      Date and time
      January 21, 2014, 4:47PM
    • Mr Spanky where is the contract note for 63c? Just one? Nope. Liar. He he....

      Got all mine ready to go. Just one from you Mr Spanky. Caught out badly. He he....

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 5:00PM
  • NZ slated to raise domestic interest rates because their rate of inflation is climbing. The logic of raising interest rates to combat inflation has always escaped me. A higher interest rate increases borrowing costs so demand drops, which is the stated reason for an increase in interest rates. But the rate of inflation is measured with reference to the cost of a basket of goods. Just because the cost of items in that basket are going up doesn't mean that demand is going up. It's just the cost of those goods which can be for a whole range of reasons and not just necessarily increased demand. If Australian experience is anything to go by many of the cost increases come from gov't charges for non-discretionary items such as utilities, rates, taxes and charges. Lifting interest rates and reducing disposable income does nothing to reduce the demand for those services but does reduce affordability and demand for everything else and local employment along with it. But when there is only one economic lever to pull, it gets pulled whether pulling that lever is effective or not. It's like scratching your head because your foot itches. Feels good but achieves nothing.

    Commenter
    mitch of ACT
    Location
    Date and time
    January 21, 2014, 11:14AM
    • The effectiveness of interest rates to target inflation depends mainly on the source of inflation. Rising prices as a result of a supply shock are largely immune to this type of intervention. For example, widespread drought destroys a seasons crops, pushing up the price of food. Increasing interest rates does nothing to increase the supply of food and so does nothing to restrict price rises. Demand driven price rises are different. Increase interest rates and you change the incentives from consumption (and increased debt) to savings and investment, reducing demand for goods and thus reducing upwards pressure on prices. Reducing disposable income for those with debts further reduces aggregate demand. In the short run, decreased inflation correlates with increased unemployment, usually, but not in the long run.

      So goes the theory. Whether inflation targeting actually works or not, and whether the inflation rate targeted (or measured) is appropriate is the subject of ongoing debate. New Zealand has a long history of it, and it appears to work fairly well in its economy. It also appears to be having demand driven inflation, so raising interest rates may well work again.

      Commenter
      Aaron
      Location
      Date and time
      January 21, 2014, 11:42AM
    • @Aaron and of course the 2 as of yet unmentioned effects of increasing interest rates are increased incomes for the net savers and a reduction in the cost of imported goods as the increase in the value of the currency reduces the cost of those goods, provided of course that retailers pass on those price cuts. They do but with a long delay. So the combined effects of an increase in income for the net savers, who are a significant component of the population, and cheaper imported goods is the maintenance of demand that caused the problem with inflation in the first place. I'll scratch my head because my foot is itchy.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 12:05PM
    • A falling A$ will fuel inflation. The RBA Chiefs and Treasurer Hockey should be careful what they wish for.

      Commenter
      nolongerconfused
      Location
      Date and time
      January 21, 2014, 12:53PM
    • Except, Mitch, that net savers probably have a relatively lower marginal propensity to consume. Given they also have a greater incentive to continue to save, the increased income from their savings probably gets directed to a reasonably large degree towards further savings, rather than discretionary consumption. Its one of those curious things that those in debt tend to spend more - hence the massive flow on effects of homebuilding on the economy as all those shiny new homes need shiny new furniture, and whitegoods, and outdoor settings, and and and... If you reduce the incomes of people with debt, while simultaneously enhancing the incentives of people who save to save more, then presumably there is downward pressure on demand.

      Commenter
      Aaron
      Location
      Date and time
      January 21, 2014, 2:11PM
    • @Aaron, I thought you might bring that up but don't overlook the fact that those net savers are probably retired and don't need to consume as much. They have all that they want. However a fair number of them die off each year and when their kids get hold of Mum & Dad's hard-saved loot they blow many years of saving all at once in either new consumption and/or paying off debt from past consumption enabling them to buy more.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 2:21PM
    • Well that's also possible. I think however, that its relatively well established that the effect of increasing the price of money is to reduce demand for it and increase the supply of it - that is, reduce consumption and increase saving. That may not hold true for every individual, but it holds true generally. Whether that reduction in demand influences prices depends on whats pushing prices up and the balance between income and substitution effects.

      Commenter
      Aaron
      Location
      Date and time
      January 21, 2014, 3:37PM
  • From forexlive.com, an interesting..... portent of recent Wall Street NYSE crashes, Hollywood movies about Wall St! http://bit.ly/1jqvisF Take with a pinch of salt, but talk about coincidence!

    Commenter
    JJ
    Location
    NSW
    Date and time
    January 21, 2014, 11:14AM
    • Let's hope that correlation doesn't hold true for "end-of-world" movies. There has been a rash of those lately.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 12:08PM
    • @mitch, the difference there is the world, at least as we know it, hasn't ended. Not yet anyway. Touch wood, etc.

      Commenter
      JJ
      Location
      NSW
      Date and time
      January 21, 2014, 12:45PM
  • this market? is it just gonna sit there all day now?
    big swings ... and then .... nothing.

    Commenter
    J.
    Location
    Syd.
    Date and time
    January 21, 2014, 11:13AM
  • Don’t hold shares in FMG but have looked at it a few times and quite surprised how well it has been run. Massive borrowings put into productive projects that have yielded excellent returns.
    Debt is targeted to reduce to 9bln and continue to reduce. Break even costs for iron ore around $75 and capital expenditure well on the decline path.
    Already paid a fully franked div of 10c a share much better yield than BHP etc historically.
    The company has an enormous resource portfolio and appears to be head and shoulders above the old school miners when it comes to strategy and implementation.
    PE of around 9 seems pretty cheap considering the wealth of assets available and coming on line.
    Downside Is the big customer viz China and its demand for iron ore which even if it stagnates is still an enormous order book in the years ahead.
    Suspect sentiment will gradually turn and it will become a valued index stock over time.
    All just an opinion of course.

    Commenter
    Harry Rogers
    Location
    Date and time
    January 21, 2014, 11:12AM
  • Yes digitalisation is the wrecking ball in western economies concentrating wealth and destroying more jobs than it is creating according to recent studies done in the USA.No debate about that by our politicians.No wonder the welfare bill has blown out when you add 275,000 workers coming into australia each year on over a dozen types of working visas

    Commenter
    Harry Hoot
    Location
    richmond
    Date and time
    January 21, 2014, 11:07AM
    • Agreed digitization and computerisation are a benefit to society but need some controls to stop the downside of loss of employment.
      After much consideration I believe the answer is a special tax on computers. This could be around 3-5% extra GST on these items alone.
      I hate extra tax but if we are to live in a society with equal opportunities a digital tax is inevitable.
      Governments can't complain about "a welfare state" and at the same time permit the demolition of the workforce by replacing employees by machines.
      The welfare state is just beginning and governments can no longer attack the unemployed and disabled as they are only the result of computer generated economics.

      Commenter
      It's All about Making Money
      Location
      Lennox Head
      Date and time
      January 21, 2014, 11:56AM
  • TRY sold out at 1.07 all my goldies gone for quite a nice slice,thanks ASX....whats next

    bio techs....hold ya breath.

    Commenter
    BearShapedBull
    Location
    Pamplona
    Date and time
    January 21, 2014, 11:02AM
  • And look....The solution after destroying our country is to lower wages and conditions.....http://www.smh.com.au/comment/tony-abbott-must-grasp-jobs-nettle-now-to-avoid-election-sting-20140120-314pp.html..............................while the elite get richer..................http://www.smh.com.au/business/richest-85-boast-same-wealth-as-half-the-world-20140120-314vk.html#comments

    Commenter
    JohnBB
    Location
    Date and time
    January 21, 2014, 10:57AM
    • Perhaps we need a Socialist Party in Canberra, yeap, I think it's coming.

      Commenter
      Revolutionist
      Location
      Sydney
      Date and time
      January 21, 2014, 11:30AM
  • If Australia handled the mining boom like Norway did and each citizen had $180k in a national fund, we'd have $4 trillion. That's a lot of money.

    What we actually have is the highest personal debt in the world supporting the biggest bubble in the world, a lazy $500b gov debt, 20% assets left, and a growing population to share it all with. You could not make this stuff up. The past 30 years of Australian government has been a disaster. We're going to lose everything.

    Commenter
    JohnBB
    Location
    Date and time
    January 21, 2014, 10:53AM
    • And rents have been dropping for 2 years in Melbourne. Thousands of properties sitting empty. Poor old over aspirational middle income earning littlelandlords don't know what to do.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 11:02AM
    • Sadly your comments are very true.
      In hindsight, did Keating screw up the opening of the economy, in that it seems to have been skewed in favour of our overseas trading 'partners' ? Was Fraser right in trying to protect Australian businesses ?
      The desire to become a 'big' country was clearly mad cannot understand how government could have been so stupid; nor can I at this moment figure out how those in power could have gained personally in a really big under the table way. I am sure I will figure it out later though.

      Commenter
      Tony
      Location
      Melbourne
      Date and time
      January 21, 2014, 11:11AM
    • We have lost everything already, we just don't know it, or don't want to accept it, yet.

      Commenter
      Realist
      Location
      Sydney
      Date and time
      January 21, 2014, 11:12AM
    • @JohnBB, with great respect mate that's a nonsense statement. The mining boom never produced anything like $4trillion in even gross revenue let alone net of production costs. And to cap it off the new gov't gave away the only extra source of revenue from all of our minerals being sent overseas by abolishing the MRRT instead of fixing it. Instead poor families lose their schoolkids bonus, will have to pay more to visit the doctor and small business lost significant tax concessions. And that from a gov't that sold itself as being the friend of small business. With friends like that who needs enemies.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 11:25AM
    • @mitch....Yes the number's probably way out. The sentiment is the same though. We've squandered everything and worse (debt, asset sales, pop growth), while Norway has thrived and provided for the future. Our future will be harsh. Nothing like what we're all used to and nothing like GenY think they are entitled to. Our generation has destroyed everything.

      Commenter
      JohnBB
      Location
      Date and time
      January 21, 2014, 11:52AM
  • Here's today's business headline.
    ASX TREADS WATER.
    Here we go again waiting on Uncle Sam to tell us what to do. Australian traders are mesmerised by overseas movements in the corrupt US.
    In fact we should be concentrating on the corrupt West of our country.There is Indonesia and China who seem to have been overlooked and as they are ready and willing to cop a back hander we should jump at the chance to hop into bed with both of them.

    Commenter
    The Pest from the west
    Location
    Lowood Qld
    Date and time
    January 21, 2014, 10:49AM
    • We live in a global economy with the USD as the international bench mark currency. It's not that hard a concept to understand.

      Commenter
      Gordon Akman
      Location
      Broadbeach
      Date and time
      January 21, 2014, 11:07AM
  • "The clear message is that when it comes to LNG, Shell is having a major rethink. Monday's whispers are that the costs of this project simply don't stack up - and the talk for months has been about how or whether this project is viable."

    www.smh.com.au/business/comment-and-analysis/shell-rethink-on-lng-looms-large-20140120-314se.html#ixzz2qz3WYDNk

    Yep, the shale gas revolution has skewered the Australian LNG industry. Japan has already pulled out of the Woodside project and the much lauded forward contracts are under massive pressure from rising costs and the inevitable fall in prices.

    Don't say you weren't warned.

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 10:22AM
    • I love how people say Woodside is a "blue chip" stock. Look at its chart. It's a nothing stock. Maybe a trading stock for the more competent.

      Commenter
      Nasty
      Location
      Boy
      Date and time
      January 21, 2014, 10:37AM
    • zzzzzzzz.....zzzzzzzzzz...zzzzzzzzzzzzzzzzzzzzzzzzzz

      Commenter
      no banks .. no party!
      Location
      boring
      Date and time
      January 21, 2014, 10:46AM
    • What have you ever contributed?

      Commenter
      No banks
      Location
      Twat
      Date and time
      January 21, 2014, 10:59AM
    • Get back to class and pay attention!

      Commenter
      Teacher
      Location
      Taylors Lakes Primary
      Date and time
      January 21, 2014, 11:01AM
    • How's BOQ going? he he....

      Short. $$$$$$

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 11:06AM
    • Alan. I am curious... What do you actually own? Are you long anything? Which bank is your cash in? If Australia is so expensive, why don't you pack up and take your expensive AUD to a cheaper place?

      Everything is doom and gloom in your book. The markets have survived countless recessions, a great depression and numerous wars and other disasters. What makes it different this time?

      Commenter
      Gocats23
      Location
      Date and time
      January 21, 2014, 11:13AM
    • "Everything is doom and gloom in your book."

      NCM long +32%
      SBM long +25%
      PDN long + 20%

      Try to pay attention.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 11:24AM
    • It would have to be that LNG dead. It has nothing to do with Shell underperforming against the other super majors over the last 18 months. They are always late and over budget on projects, so why commit to an LNG project where the gas feed is thousands of wells flowing at tiny rates?

      Commenter
      pplater
      Location
      Perth
      Date and time
      January 21, 2014, 11:26AM
    • "Alan. (sic) I am curious..."

      Haven't we seen this movie before?

      Commenter
      Cinema
      Location
      Attendee
      Date and time
      January 21, 2014, 11:30AM
  • "The bearish calls on iron ore are growing and that is only expected to get louder as China continues to stock pile the raw material and record production numbers flood the market."

    Don't say you weren't warned. When's FMG going to $6 bob?

    Commenter
    Allan
    Location
    Prahran
    Date and time
    January 21, 2014, 10:13AM
    • Dear Al, it seems you have woken up with another case of S O L .
      Why don't you let the sunshine in and face it with a grin.
      Rightio now lay some of your short stocks on us so we can all have good old chuckle.
      Also how about a gobful of abuse for those battlers "The landlords"?

      Commenter
      The Pest from the west
      Location
      Lowood Qld
      Date and time
      January 21, 2014, 10:56AM
    • And my advice for you is talk about the market and not about me. Fascinating as I am.

      Commenter
      Allan
      Location
      Prahran
      Date and time
      January 21, 2014, 10:58AM
  • Eighty-five people controlling a vast amount of wealth? Communism NOW! US must and will become a Socialist nation under the total control of China and Russia, it is inevitable anyhow, because of their continuous greed. That's how Communism started in the first place, Revolution will re-emerge...
    Australia continuing along similar lines as the US will find itself under total control of China. Land appropriation and re-distribution will commence under Chinese control....I shall not fight, shall not resist.

    Commenter
    Socialist Convert
    Location
    Sydney
    Date and time
    January 21, 2014, 10:08AM
    • @Socialist Convert.....Have you considered that you'd be sharing Australia with 2 billion Chinese?....Far better to start the revolution now while there's a little bit left to divide among our GROWING population. "I shall not fight, shall not resist."...You, me, we wouldn't last a minute living in such conditions. The tragedy is you and I know where this is headed. Most Australians are more worried about which new outdoor setting to buy.

      Commenter
      JohnBB
      Location
      Date and time
      January 21, 2014, 10:19AM
    • JohnBB...I would be sharing with only about two hundred million Chinese not two billion. I understand they're very decent, much more compassionate, understanding, hard-working, highly educated people...got to love it. They will give to each citizen according to their needs, each (Australian) family will start to have a future and hope for their children. Australia has not been able to provide basic & decent housing for its citizens despite vast lands...now change is coming....China NOW!

      Commenter
      Socialist Convert
      Location
      Sydney
      Date and time
      January 21, 2014, 10:32AM
    • @Socialist Convert adopting the Communist system in its purest form might solve the problem of unequal wealth distribution but as the reality in Russia, China & North Korea shows, the wealth soon gets redistributed back to the ruling elite with the remainder of the population poorer than they have ever been.

      Commenter
      mitch of ACT
      Location
      Date and time
      January 21, 2014, 10:54AM
    • @Socialist Convert...I hear you. We are in a self inflicted frustrating position......There's this little problem regarding the environment. We are already twice sustainable population. The environment has no hope of sustaining even the much anticipated 50 million.

      Commenter
      JohnBB
      Location
      Date and time
      January 21, 2014, 11:33AM
    • @mitch of ACT...No, those families will never hold power or wealth again.

      Commenter
      JohnBB
      Location
      Date and time
      January 21, 2014, 11:37AM
    • Most of the riches were handed down from those that did EARN the wealth
      Apart from the tech moguls who made it alone without stealing a dime
      Fred compared USA with Ru other week, well he was wrong, the wealth in Ru was stolen, by Party men close to the Kremlin
      People in Ru , the poor that is are even worse off than poor in USA, I have lived there in the villages, villages without heat since 89
      The infrastructure of Ru, pipes, water sewage , have decayed into a state of rot
      Some should pick up A. Rands book and take a lesson on getting there sans assistance
      Bugger down 48k since the banks started down
      Sold out NAB and more into ANZ, It is a lottery, pocketed the change
      Bank bashing is in vogue again, this time courtesy Goldman Sachs

      Commenter
      stu
      Location
      Date and time
      January 21, 2014, 12:59PM
Comments are now closed