Richard Russell: “A hard rain lies ahead”

Love him or hate him, 85-year old Richard Russell is the doyen of investment letter writers – having been at it for more than half a century – and his views as expressed in his daily Dow Theory Letters always make for stimulating reading. The paragraphs below summarize the R man’s “big picture” view of the U.S. stock market.

“I want to say that I have a number of reasons for being convinced we have been in an upward correction [referring to the rally that commenced in March 2009] in an ongoing primary bear market. Some of this is based on my interpretation of the 50% Principle, plus my analysis of the very poor action of the “internal market” [i.e. market breadth] over recent weeks.

“I envision the Dow dropping to test, and possibly violate, the 6,547 level. I don’t know whether this will take place this year, but I wouldn’t be shocked if it does. It would not surprise me if the Dow tests the 6,547 level. And if that happens, I can almost guarantee the US will have sunk into the much-feared “double-dip” recession.

“If the US begins to shrink into a double-dip recession, I expect the Obama administration to go ‘wild’ with new stimuli and ‘make-work’ programs, all of which will be financed with higher taxes (‘soak the rich’) and a further major expansion of the Federal Reserve balance sheet. I would also expect every central bank in the world to simultaneously open their money-printing spigots wide, wide, wide.

“Conclusion in a nutshell: the secret of the forthcoming picture lies with the action of the U.S. stock market. Again I’ll remind my subscribers that the function of the stock market is to discount the future, not to mirror the present. All news is history. Or as Wall Street puts it, “news known is news discounted”.

“One of the biggest mistakes amateurs make is to think something they know is unknown and not already discounted by the market. Despite this, the media insist on describing every move of the stock market as being a reaction to some current event or some new government statistic. They couldn’t be further off the mark. As I read it, the poor action of the current stock market is telling us that the future for the U.S. is bearish and a hard rain lies ahead.

“At this juncture, sophisticated, wealthy people are not concerned with increasing their fortunes, rather they are searching for ways to conserve what wealth they have.”

Source: Dow Theory Letters, July 19, 2010 & http://www.investmentpostcards.com/2010/07/21/richard-russell-%E2%80%9Ca-hard-rain-lies-ahead%E2%80%9D/

Guildford Coal Limited (GUF) – Listing Today

Guildford Coal Limited (GUF) is due to list today (22-July) at 11:00am.

Company Overview

Guildford has established a portfolio of coal exploration tenement areas in Queensland, Australia. Guildford’s tenements cover an estimated area of in excess of 21,000 square kilometres and are defined within project areas as follows:

• Hughenden Project (Galilee/Eromanga Basins);
• Sierra Project (Bowen Basin);
• Comet Project (Bowen Basin);
• Sunrise Project (Surat/Bowen Basin);
• Monto Project (Nagoorin Graben); and
• Maryborough Project (Maryborough Basin).

For more information, please visit http://www.guildfordcoal.com.au/

Booming Mac sales drive Apple’s best-ever quarter

NEW YORK (CNNMoney.com) — Record Macintosh and lighting-fast iPad sales made Apple’s latest quarter its best ever, the company said Tuesday.

Sales for the Cupertino, Calif.-based company rose to a record $15.7 billion, 61% higher than Apple’s sales in this quarter last year. Net income rose to $3.25 billion, up 78% from a year ago.

Apple sold 3.27 million iPads, which hit the market on April 3, and it sold 3.47 million Macintosh computers — more than it has ever sold before in a three-month stretch.

Read full article at http://money.cnn.com/2010/07/20/technology/apple_earnings/index.htm

12 Stocks Ready to Rip After Intel’s Huge Earnings

Intel reported monster earnings yesterday, and its shares are already rallying in the pre-market.

Then again, so are other key tech names as well.

Here are the key stocks to watch ahead of today’s market open.

Advanced Micro Devices (AMD)

Source: Google Finance

Texas Instruments (TXN)

Source: Google Finance

Microsoft (MSFT)

Source: Google Finance

Motorola (MOT)

Source: Google Finance

Taiwan Semi (TSM)

Source: Google Finance

Applied Materials (AMAT)

Source: Google Finance

Read more: http://www.businessinsider.com/12-tech-stocks-to-watch-today-after-intelss-huge-earnings-2010-7#ixzz0tjK1lf2l

Commodity Snapshot

Below we highlight our trading range chart for ten major commodities.  In each chart, the green shading represents between two standard deviations above and below the commodity’s 50-day moving average.  Moves to the top or bottom of this range are considered overbought or oversold.

As shown, oil is trading pretty much in neutral territory at the moment after bouncing off of oversold levels a month and a half ago.  Gold has moved down from overbought levels over the last week, and the metal is now closer to the bottom of its range than the top.  Silver and platinum are in similar situations.  Natural gas has pulled back some after moving into overbought territory a few weeks ago.  Looking at some of the agricultural commodities, corn is attempting to break out of a long-term downtrend, while wheat already did so after spiking recently.  Both coffee and orange juice have done pretty well lately.

Source: http://www.bespokeinvest.com/thinkbig/2010/7/7/commodity-snapshot.html

Doug Kass: Stocks Have Hit Bottom For the Year

New York City is in the midst of a serious heat wave, but on Wall Street the stock market is on a major cold streak. Stocks are down 9 of the past 11 sessions. Even Tuesday’s higher close was still well off the highs of the day.

Doug Kass of Seabreeze Partners, famous for calling the market bottom in March 2009, isn’t worried. In fact, he’s bullish. “I think we’ve seen the lows of the year,” he tells Tech Ticker guest host Jon Najarian of OptionMonster.com. “The market’s are traveling on a path of fear and share prices have significantly disconnected from fundamentals,” he says.

Kass predicts stocks will rise 10%-12% by year’s end on the back of strong earnings and a better-than-expected economic recovery. He says positive trends in the ISM manufacturing and non-manufacturing index and improved labor market conditions point to “moderate domestic economic expansion, not a double dip.”

Trading at around 11 times earnings, stocks are fairly inexpensive, says Kass. He notes stocks generally trade at around 15 times future earnings, and even higher in periods of tame inflation and low interest rates, as we’re currently experiencing.

It may not be a V-shaped rally like that of 2009, but Kass says we’ve just started building a base, which could lead to a fundamentally stronger and longer-lasting rally in the future.

Source: http://finance.yahoo.com/tech-ticker/doug-kass-stocks-have-hit-bottom-for-the-year-517083.html

Learn Basics of Elliott Wave Analysis — FREE

Ralph Nelson Elliott discovered the Wave Principle in the 1930s. Over the decades, his discovery was kept alive by a handful of individuals. A few of those, such as Bolton, Prechter and Frost, educated investors on how to use pattern analysis in financial markets.

To help out Elliott Wave International’s readers in learning the basics of the method, we put together a free 10-lesson online tutorial. Here’s an excerpt. To get it in full, look for details below.

EWI’s Basic Elliott Wave Tutorial
Lesson 1, excerpt

At that time [of his discovery], with the Dow in the 100s, R. N. Elliott predicted a great bull market for the next several decades that would exceed all expectations at a time when most investors felt it impossible that the Dow could even better its 1929 peak. As we shall see, phenomenal stock market forecasts, some of pinpoint accuracy years in advance, have accompanied the history of the application of the Elliott Wave approach.

Under the Wave Principle, every market decision is both produced by meaningful information and produces meaningful information. Each transaction, while at once an effect, enters the fabric of the market and, by communicating transactional data to investors, joins the chain of causes of others’ behavior. This feedback loop is governed by man’s social nature, and since he has such a nature, the process generates forms. As the forms are repetitive, they have predictive value.

The market…is not propelled by the linear causality to which one becomes accustomed in the everyday experiences of life. Nor is the market the cyclically rhythmic machine that some declare it to be. Nevertheless, its movement reflects a structured formal progression. In markets, progress ultimately takes the form of five waves of a specific structure.

Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4, as shown in Figure 1-1. The two interruptions are apparently a requisite for overall directional movement to occur.

At any time, the market may be identified as being somewhere in the basic five wave pattern at the largest degree of trend.

Read the rest of this 10-lesson Tutorial and see multiple charts now, free! All you need is to create a free Club EWI profile.

Read the rest of this 10-lesson Basic Elliott Wave Tutorial online now, free! Here’s what you’ll learn:

• What the basic Elliott wave progression looks like
• Difference between impulsive and corrective waves
• How to estimate the length of waves
• How Fibonacci numbers fit into wave analysis
• Practical application tips for the method
• More

Keep reading this free tutorial today.

Source: http://www.safehaven.com/article/17423/learn-basics-of-elliott-wave-analysis-free

Goldman’s Global Leading Inidicator Rolls Over

“Our improved GLI comes at a particularly important time for assessing the cycle. Although our original GLI had not shown a clear peak, we have pointed out for some time that it has been distorted by trending issues in the past few months and that signs ‘under the hood’ have pointed to some slowing in momentum. The improved GLI shows that message more clearly, with a peak now visible there. This suggests that the pace of industrial growth is set to decelerate, although from extremely high levels, an outcome that would be consistent with our GDP forecasts.

Markets are increasingly focused on what this kind of slowing in momentum will mean. As usual at this point in the cycle, the key issue is the extent of deceleration. The acceleration phase in recovery inevitably ends and that point was always likely to come in 2010H1. But, as we show once again, while that shift means a more moderate picture for risk assets, the deceleration is generally only a clear negative event if the slowdown is severe. Although our US forecast is still firmly below consensus, our global forecast does not envisage a sharp slowdown. That said, we will continue to pay close attention to the incoming data on this front, starting with the new release of the GLI tomorrow.”

What does it all mean for the various asset classes?  Not surprisingly, when the GLI is in decline equities tend to under perform, bonds outperform, volatility spikes and credit spreads widen:

“Within equities, the performance differentials between periods when the GLI is rising and falling are on average very large, although of course heavily influenced by the impact of serious downturns and recessions. The differences are strongest in emerging markets (EM) and in cyclical equities (our Wavefront growth basket shows that cyclicals tend to outperform strongly in ‘up’ phases and underperform strongly in ‘down’ phases).

Commodities show a similar pattern. But the relationship is strongest for industrial metals including copper (this is true even if they are excluded from the GLI), and least strong for gold and other precious metals. Interestingly, at least over the sample period here, oil has behaved with a strong cyclical bias too.

Bonds display the opposite behaviour, with a strong tendency for yields to fall when the GLI is falling and significant rises when the GLI is rising. That tendency is largest in the US market (front and back) but visible in other majors. There is also some tendency for the yield curve to steepen more when the GLI is falling.

Unsurprisingly, given the other results, credit spreads and equity volatility (as measured by the VIX) also tend to move significantly higher on average during phases when the GLI is falling and narrow when it is rising. These differences have been extremely pronounced in the recent downturn and—as we have described elsewhere—tend to be most dramatic at the ends and beginnings of cycles.

Experience in FX is more mixed. In general EM FX tend to perform better when the GLI is rising than falling and, within the G10, the commodity currencies are by far the most reliably related on the positive side to phases of the GLI. That said, the GBP, SEK and NOK are all confirmed to be more ‘cyclical’ in this simple analysis than the EUR. On the other side, the CHF is the least cyclical of the G10. Within the G3, the message is more mixed—and more varied over time—but there is a modest tendency over the long term for the USD to do better when the GLI is deteriorating.”

Source: GS – http://www.scribd.com/doc/33861708/GoldmanSachs-Global-Economics-Weekly-20100630

The great Berkshire Hathaway index run-up

Now that Berkshire’s Class B shares have joined the Russell 1000, portfolio managers who paid a pretty penny can breathe easy again.

The runup this year in Berkshire Hathaway’s Class B stock (BRKB) is a good reminder of the power of an old kind of index arbitrage: buy high and sell higher, when the index-fund managers get in.

Usually, when fund managers engage in index arbitrage, they’re weighing the value of an index’s different stocks against each other, choosing the leaders and the laggards. But this year, there has been an easier strategy: cleverer hedge-fund managers or short-term investors just lie in wait until the announcement that a big stock will be added to an index; after the announcement, they buy up tons of the stock, driving up the price for the poor index-fund portfolio managers who are required to hold all the stocks in the index – so they pay exorbitant prices to own the shares.

Exhibit A: Berkshire Hathaway’s Class B stock has been zooming up for the past few days, most recently with a nearly 4% jump on Friday to close at $81.90. The reason: As of this morning’s open, Berkshire Hathaway has been added to the Russell 1000 Index. Berkshire is a giant, so it immediately ranked among the top 10 companies on the index, by size. Berkshire’s Class B stock alone will make up 1.1% of the Russell 1000 index. According to Goldman Sachs analyst David Kostin, 17.6% of the Russell 1000 holdings are now in financials, a full percentage point higher than they were before Berkshire joined.

The big jump in Berkshire’s Class B might cause some Russell 1000-following index managers to groan, but it’s probably a big relief to one group of investors: the portfolio managers who bought Berkshire’s class B stock at pretty rich prices after February 12, when it was added to the S&P 500 index. For those investors, who paid roughly $76 a share and up, things looked dark for a while in early June, when the stock dropped to $70 a share. Then, like Christmas in June, there was the announcement mid-month that Berkshire would join the Russell 1000, and all of a sudden the S&P 500 index-followers could breathe easy that the stock was worth something again. Overall, it’s hardly been a bad play: Over the course of seven months, Berkshire’s Class B stock jumped from around $65 a share in late January, around the time the stock took a 50-to-1 stock split, to $81.90 as of Friday’s close.

Of course, none of this could have happened until Berkshire’s leader, Warren Buffett, chose to compromise on his opposition to short-term investing. Buffett always liked to keep his company’s stock an exclusive playground for long-term holders — witness the Class A shares (BRKA) trading at $122,300 each these days — but the 50-to-1 stock split in Class B stock was reportedly spurred by Buffett’s need to find a wider universe of investors to help finance Berkshire Hathaway’s acquisition of the Burlington Northern Santa Fe railroad. The stock split dropped the price of Class B shares from $3,275 each to more like $65 each.

The enormous growth in the trading volume of Berkshire’s Class B shares shows the success of Buffett’s populist move. Before the S&P 500 move, Berkshire’s Class B traded at around 5.5 million shares a day; now, it’s more like 10.18 million shares a day.

These boosts are temporary, of course; as of Monday morning, Berkshire’s Class B already started to pull back, dropping 1% in early morning trading to around $81 a share. Of course, if any of those Russell 1000 index managers find that the Berkshire Class B stock loses even bigger chunks of its pop after the index-buying games are over, they might just have to swallow their hard luck: there aren’t that many more indexes that the stock can list on.

By Heidi N. Moore, contributor – Source: http://wallstreet.blogs.fortune.cnn.com/2010/06/28/the-great-berkshire-hathaway-index-run-up/

Comming Soon – webIress

ASX Stock Report 10-5-10

1. More volatility makes for busier times in the trading business. Last week we had a revision of 6% in our equities market, and today we’ve made back more than a third of those losses. All ords was up 114.8pts, all sectors up across the board with Resources and banks gaining >3% on ASX200.

• ASX200 4599.8 +2.66%

• SPI Futures 4610.0 +3.04%

• DJIA Futures 10,621 +286pts

2. NAB business survey -3pts, to +13 (>l-term average of +7). Business conditions -5pts to +8 and capacity utilisation flat at around 82% in April. Proof the intention of tighter RBA policy coming to fruition in business as well as consumers, putting a halt to prices.

3. ANZ job ads survey -1.2% in April, +14.9% on a p.a. basis.

4. Clearly best performers of the day where those hardest hit from last week RIO +5.69% CBA +4.74% WBC +24.96% LNG +25% BMN +22.73%

5. IPL results today stock was up ~3% by 10.20am. despite falling revenue -27.6%, an ~50% fall in Raw materials and -34% in operating expenses was the reason for the substantial +33% rise in profits (market expected NP $152.8M vs. actual NPAT $132.4M). Over the period a complete turnaround in operating cash flows from -$112.8M to +$79.2M and less capex on PP&E without diluting issued equity points to a successful year for the company financially. They have endured a very strong Australian dollar, lower fertilizer prices, a soft US economy and challenging business conditions. EPS basis the company is better off +22.4% YoY 8.2c HY FY10 vs. 6.7c HY FY09, and then again on a NTA $0.27 HY10 vs. -$0.14 HY09. Fertilizers revenue -21.4% HY10oHY09, explosives -31.9%. IPL has shifted focus and will benefit off leverage into the US market. The focus has changed in primary product from fertilizer to Explosives after their US private subsidiary took over Dyno Nobel, 16th June 2008. Explosives earnings mix 58% vs. 47% over HY10 from HY09. So far the company has projected sustainable earnings for explosives by CY12 US$204M. Currently under their ‘velocity’ program has provided US$96.9M in sustainable revenue. Velocity being the program from acquisition of Dyno Nobel and their strategy to implement a sustainable earnings generating explosives business. For this HY Velocity has returned 43% of US$60M capital injection. Market has on average begun to factor in the US$204M projection with broker consensus upgrades puts the stock back on and up-trend. Market expects impact of Super profits tax on IPL to be a reduction to earnings by ~5% from FY13 on Phosphate Hill mine but still uncertainty resides on any material impact. IPL $3.17 +4.28%

6. Peabody blaming uncertainty around the resources SPT for reducing their Macarthur bid to $5. WHC looks like the market preferred Australian coal producer. Stock has been very resilient to news over the RSPT trading flat over the week from the 3rd of May. WHC $4.96 +2.69% MCC $13.38 -2.26% GCL $11.73 -0.59% COK $0.435 +3.57% CEY $4.51 +2.04%

7. Xstrata has suspended a $30M copper exploration project in central QLD due to the RSPT.

8. Gold Prices getting resistance at US$1200/oz since +US$50/oz last week, slip below US$1200 for the first time since last week. NCM $31.44 -0.16% LGL $3.90 EAU $18.10 +0.22% SBM $0.27 +5.88%.

9. GPT AGM: report >90% occupancy rates at all levels (wholesale & office), gearing Dec 09 23.5%, investing $220M p.a., distributing 3c/share or 80% of realised operating income. No clear guidance given for the FY. Jono Senior (our property analyst) has given a list of diversified office trusts that have compelling price discounts to NTA. CDI $0.53 NTA 69c, DXS $0.79 NTA $1.01, IOF $0.605 NTA $0.80. Given the MGR offer for WOT we may have begun moving out of the discounting cycle for Office REIT valuations. GPT $0.555 +1.83%

10. Transurban group buys rights to Sydney’s Lane Cove tunnel. TCL $4.92; AIO $1.65 +3.13%; CEU $0.40 -1.23% offshore exposure – ITO $1.115 +3.72%; MAP $3.01 -0.99%; TOL $6.56 -2.96%. One can expect that fiscal money injections into infrastructure will only further circulate money in the industry and impact revenues across the board, conditional on the individual company’s performance. TCL in trading halt as they move to give a share purchase plan.

11. Webjet confirmed HY profit guidance, $5.2M. Trades at discount traditionally to industry Wotif PE +20x, however at a premium to market PE FY10 ~15.5x. A very effective entrance to NZ marketplace has put the company in good stead, however to model this for further international expansion would be insufficient as the NZ market would have quite different dynamics to say that of the US. The other concern in the short term would be the revision in discretionary spending; however given a competitive AUD encouraging international travel this may offset such issues. Webjet expects ~$5.197M NPAT for the 2H of this year, by my calculations the stock is trading on a PE 15.75x. This is still a ~21% discount to Wotif. The consensus is that WTF is cheap at FY10 PE 24.9x, & FY11 PE 20.8x. These facts included we can expect the performance of WEB to the end of this FY to remain above $2. WEB $2.14 +3.38% WTF $6.48 +4.01%

12. Rhetoric in the federal budget tomorrow will provide further insight into the government’s intention with business and the overall financial health of the Australian economy. We can expect there to be impacts on future earnings figures post the release of the budget tomorrow.

ASX Stock Report 7-5-10

1. Plenty of action in the market today, poor offshore leads all ords -170pts after open. Seemingly the effect of resources tax now factored in as ASX200 material +>1% in mid trading but ended -0.5% as more selling came late afternoon.

• ASX 200 4480.7 -2.02%

• SPI Futures 4474.0 -2.16%

• DJIA Futures 10478 +21pts

2. RBA Policy Statement global recovery, most noticeably in Asia (ex-Japan) yet north Atlantic economies output three percent below previous peaks. Particular notice of Europe. Which raises the question of what about investments in Emerging Market securities? Or has the benefit been exhausted, and then you have to manage the limitations of operating in emerging markets like China v Google example. In terms of the domestic economy the RBA are certain the economy will continue to grow, after enduring a relatively mild impact of the global downturn. They are happy with private sector demand and household sentiment. The business sector has still a little uncertainty running through it, according to them. They expect business to remain cautious in their spending plans despite their general optimism of the future. I suppose putting aside the short term impacts in Europe and US, the real concern for markets may have not had come to the fore just yet, the question surrounds the ability of developed nations to be able to finance their debt funding when they come due in 2012. What will happen to credit markets if developed economies are incapable of running surpluses to fund their debt issues? But that is still some time to come, however does strengthen the argument for emerging market exposure long term.

Brazil, China, and India probably the most developed of the emerging markets, picking out Aussie stocks operating in these parts of the world: NSL; BDR; CGM; AXA; WOR; SGT

Then the riskier nations south East Asia, Indonesia, Thailand stocks exposed to the greater eco growth potential: KRL; QAN Jetstar; ATB; CBD

3. Alumina AGM reiterated guidance for annual profit expected 10% for 2010. Sentiment for global aluminium demand is quite positive. Norwegian aluminium group Norsk Hydro have had better then expected first-quarter results and expect demand in the market would group by 12% this year, other sources forecast output 39mmT p.a. compared with 37mmT in 2009. Alumina would argue that their scale globally would contribute to the 10% expectation, which is still not equivalent to prior 2008 levels. Leads from LME aluminium prices overnight -0.8%. Lead, platinum and Nickel all better performing, gold -0.54% over the day. Gold/silver pairs trade on short Gold fundamentals. USD strength, risk transference to US treasuries. AWC $1.58 -0.32%

4. Bauxite Resources an alternative Aluminium trade. From the company’s quarterly activities report it is evident they are still establishing resources however have performed extremely well +643% from October 07 to Sep 09. They are winning contracts, continuing to drill and have begun shipment of bauxite and alumina or aluminium oxide. Both key components of aluminium production. BAU stock has come back from $1.30 25th Sep 09 when the company raised $57M equity to fund infrastructure development. BAU $0.365 +4.29%

5. Equinox quarterly production report strong net income and production results from their African copper & uranium mines despite bad weather. Market has already factored the results in however for a smaller mining play the company does have plenty of potential upside. Brokers are divided on their outlook with the stock is +187% since 27th Oct’08 EQN $3.93 -1.01%

6. Karoon Gas have struck a gas well, finding enough gas to justify production testing. Exploration well off coast of WA drilled by JV ConcoPhillips. KAR $7.99 +14.14%

7. Telecom NZ expect to be near the lower range of EBITDA Guidance -1 to +2%. Payout ratio approx 90% of adjusted net earnings, nil discount on DRP. NZ Reserve Bank Governor yesterday was reported indicating there may be a rate rise by mid-year. Domestic investment still remains subdued and credit markets are still tight, however his statement indicated business was bruised but not permanently scarred. Reflecting a more positive outlook on the economy, whether or not this has a material impact on Telecom NZ is debatable. TEL $1.695 -1.17%

8. JB Hi-Fi confirms soft sales guidance for March and April however has no implication on the stock. JBH defensive stock which has held up in a depressed market. JBH $18.98 +1.12%

9. It is evident that unhedging domestic equities is a mid-term theme, however in the short term a rebound in the equities market is likely once taxes, interest rates priced in. Tonight US nonfarm Payrolls data will further indicate the relative strength in the US economy, one would expect. Given these factors there would have to be a correction in the AUD which would make export driven companies including domestic resources companies quite attractive.

10. To conclude, enjoy the weekend and wish your mother a happy mother day from all of us at StoneBridge Group.

ASX Stock Report 6-5-10

1. Australian equities market is still correcting itself after the government’s proposal of a new mining tax and the sixth interest rate rise in eight months on Tuesday get priced in.

• ASX 200 4573.2 -2.16%

• SPI Futures 4559.0 -0.31%

2. Still plenty of volume in resources, banks also changing hands today.

3. ABS retail trade data March 0.3% < 0.5% expected. Aussie Dollar fell 40bps to 0.905/USD after release; AUD/USD was back to 0.9076 by 2pm. Factors contributing to consumer spending and the lower than expected retail sales data include rising interest rates, gasoline prices and the halt in government stimulus spending for the consumer.

4. ABS balance of goods as services, seasonally adjusted, March deficit $2.082B. Exports +2% imports +3%.

5. KPMG analysis of major banks’ results positive about the performance of our banks. The independent auditor attributes improvement in profits, reduced impairment charges and minimal impact of the global financial crises to their opinion of our banks. KPMG did note some have expressed disappointment with weaker-than expected interest margins from pricing competition in the mortgage market and admit wholesale funding costs remain a concern.

6. Big four banks have all passed on the 0.25% interest rate onto standard variable rates.

7. NAB the weakest of the banks reporting interim net profit -21.4% interim div 74c < expected 75c. The Company is in a better position when considering bad debts and is still quite optimistic on their outlook for the remaining of this FY.

8. Santos AGM – expects production for 2010 to be slightly below original forecast results in range 49-52Mbarrels of oil. They are confident of making an announcement for new customer on LNG JV in QLD, the company is happy to do away with 9% of an interest to attract a partner. Still happy with energy stock over hard assets, simply from the certainty of demand. STO $13.01 +0.77%

9. Aviva Corporation submitted an initial reserve report, offshore coal project in Botswana Africa. Probable reserve 895MT for run of mine. Completed required technical studies for registration as a sub-project of the Botswana Power Corp, as well as registering access to the Southern African Power Pool Network. SRK independent consultants RoM Coal reserve estimates 28yrs steady state production 10.02MTpa. “There is sufficient geological information to have the confidence to estimate the RoM Reserves in this manner.” AVA 0.094 +17.5%

10. Cougar Metals awarded a tender from Beadell resources for $2.5M 4-month drilling contract in Brazil. Beadell is operating an offshore gold mine, Ampari Gold mine in Brazil. Cougar’s existing diamond drilling rigs are brining in business worth now A$12M and gaining a solid reputation. The rig is expected to be on site at Ampari in two weeks. CGM $0.025 +8.7% BDR $0.16

11. Sims Metals positive outlook on scrap flows, subject to economic conditions. Expecting improvement in earnings, reported 3Q results scrap intake +3%. Have progressed from recording losses and writing off assets to making profits YTD 70.4M, 3Q Net Profit +30.4M. Global revenue -40% on poor scrap intake -4%, Sales in Europe also -2% a strong dollar also contributing to the offshore results. If you’re a believer in a turnaround especially in the US this may be a good stock to add to a portfolio, SGM $20.88 +2.6%

12. NBN Implementation study released to market today, still no clear outcome for Telstra. TLS +1% adding 1.78index pts to the all ords by lunch. The stock went up to $3.22 after the study was released the settled < $3.10. The independent study by McKinsey & Co and KPMG stated the $43B cost of the project is realistic. The study was based on the basis the government could build the network without the help of Telstra, but has recommended the government do a deal with Telstra to leverage off its vast infrastructure. The government will take public comment until May 27and expects to respond to the study mid-year. TLS $3.08 -1.6%

13. iiNet upgrades guidance range toward the upper end of previous range EBITDA $75-80M. Partnership with FetchTV, moving toward goal of 15% Market Share, 12.4% MS at present. IIN $2.74 +0.74%

14. Downer Telecoms secures first NBN contract to provide network design services for first release site pilot programme. More positive news for Downer, first set of Waratah trains to be delivered to NSW rail by the end of this CY. DOW $6.75 +0.45%

15. Myer is confident it will meet targets however cautious they may be about the 2H FY10. Target FY10 EBIT growth 10.7%, the stock has been heavily hit since floating last year at $4.10. MYR 3.16 -2.17% -5.36% MoM +1.27% QoQ DJS $4.46 -2.41% -5.6% MoM, -3.03$ QoQ. The majority of brokers are quite bullish the stock.

16. Brambles forecast flat full year revenue as it is yet to see sales growth from U.S. pallet pooling operations. A continued cautious outlook and concern over northern hemisphere economies that provide about 75% of revenue for the company lead the to finish BXB $7.13 -1.66%

17. Tomorrow the quarterly Statement of Monetary Policy will be released and should give away further rational for the rate rise earlier this week. Along with AI Group HIA performance of construction index, first quarter productivity figures will be released in the US overnight.

ASX Stock Report 4-5-10

1. This morning’s trade started with the remnants of yesterday’s resources selling but what really tipped the scales was the RBA decision to raise interest rates by a further 25bps, the six interest rate rise in eight months. Reflective of the strength in the Australian economy, however not helping the market gain any.

• ASX200 4737.1 -1.01%

• SPI Futures  4744.0 -1.06%

2. Stone bridge flow today in M2 Communications as the stock comes back on the board in late trade after raising $20M. Interestingly enough a lot of institutional buying in the market today.

3. The statement from Governor Glen Stevens on the RBA decision to raise the cash rate to 4.5% was based on better than expected global growth. Improved global financial market functions. Domestically the terms of trade have rebounded quicker than expected, credit conditions both at a personal level and business level have improved and inflation declining but not as much as earlier forecasts. The RBA maintain there 2-3% inflation target.

4. CBA-Australia Chamber of Commerce and Industry business expectations March quarter rose to 63.69pts from 62.7. +35pts YoY

5. Consolidation in the resources sector again a theme of today with Lihir directors have unanimously recommended shareholders vote in favour of the improved $9.5B Newcrest Mining deal. Peabody energy also demanded greater access to Macarthur Coal after having completed due diligence and admits the Governments planned tax changes could impact the deal.

6. Lihir have accepted a revised offer from Newcrest, entitling Lihir stock holders 1NCM share for every 8.75 LGL stock held. + Unchanged 22.5c/share cash. Represents a +6.4% improvement to the initial deal offered last month. LGL +3.8% NCM -3.99% post announcement. Interesting is the speed at which the offer was revised given the outcomes of Henry Tax Review outlined yesterday and their respective effect on revenue projections.

7. Westfield confirms distribution forecast 64c/share 70-75% of operating income after recording better than expected sales. Near full occupancy of 99.5% & reversing the decision to put development projects on hold, projecting $1B spend on investment projects going forward 80% of which will be Australian based. {WDC $13.14 +0.08%}

8. Tomorrow ABS buildings approval data along with the CBA performance of services index for April will provide further detail into the relative strength of the Australian economy. Also NWS and WBC will be reporting.

ASX Stock Report 3-5-10

1. Outcomes of the Henry Tax Review proposed by the government yesterday have had a knee-jerk effect on the equity market today. BHP and RIO where down by 2.73% and 4% respectively in London. Then WHC -7.52%, BHP -4.42%, FMG -5.24%, NCM -3.29% MCC -6.92% and kept going & WHC -7.33% just after the open. We would expect the case for implementation of the reform a little more difficult longer term; however this did not excuse the market for factoring it in today and for there to be trading ideas off the back of the proposition. There is a case for excessive selling just as there is a case for unhedging Australian exposed projects.

• ASX 200 4785.5 -0.46%

• Futures 200 4795 -0.5%

2. In an effort to redistribute wealth and improve national savings The Resources Super Profit tax will discourage foreign capital inflow, increase tension between corporate Australia and the government and may even miss the resource boom altogether by the time it is implemented so the government is really shooting themselves in the foot by attempting to implement the reform.

3. The other thing to consider with the compulsory super contribution increase by 3% just how much of a contribution that will make to fund managers FUM and where that will in-turn get invested? The SG increase to 12% from 9% is planned to take effect by 2020 and set to add $85B to the national savings pool over the next decade.

BT Investment Management +9.09% $2.76 likely to get a lift from directors’ announcement special div 12.5c/share. Also increased interim div income from 3c to 5.5c/share. Reported Net profit +58% YoY today, remain cautious on remainder of 2010. NAB $27.90 -0.36% CBA $58.93 +0.72% AMP $6.30 +0.64% AXA $6.22 +0.48%

4. Signs in the economy are still strong. Australia’s manufacturing sector grew in April at its fastest rate since 2002 driven by building and infrastructure. The AIG – PWC performance of manufacturing index +9.3pts to 59.8 MoM. Textiles, basic metal products, food and beverages helped drive the rebound while clothing and footwear dragged. A sub-index of employment rose 7.3pts to 55.2.

5. Transfield investor day did not give much away in terms of guidance, the company expecting flat to moderate profit growth for the FY10. However the company did confirm it won a tender for $185M JV 5-yr contract for maintenance to the AGL jointly owned Loy Yang Power station in Victoria State on Thursday. Some strong offshore contracts (35% of revenue for 1H FY10 offshore) and outlook to pursue expansion in Canada, Chile and US stock was +1.5% by 2pm. (TSE $4.04 +1.51% at close)

6. BLY $0.35 +6.06% Boart Longyear upgrades guidance citing global pickup in demand for drilling rigs and services. Revenue for Year to Dec.31 expected +33%. EBITDA forecast +76%, previously revenue growth 15%.

7. Crippled PPP train development deal for Downer EDI gets some certainty in it today with the company stating it is well underway for the waratah NSW rail set expecting the first full set to come into service by late 2010.0 (DOW $7.05 +0.71%)

8. WorsleyParsons Ltd 50:50 JV with US company Fluor Corp to provide services on the US$18.8B Alcoa and Saudi Arabian mining and refinery operation for aluminium. (WOR $26.68 +0.11%)

9. Orica HY NPAT $55M down 75% YoY. The reduced year-on-year half year profits had been anticipated, news that DuluxGroup will be split from the consolidated company into a stand-alone business and strong outlook on the remainder of the year helped to boost stock price +3.59% by lunch. (ORI $27.48 +3.89%)

10. House prices in capital cities +20% on the year to March. Melbourne +27.7%, Sydney +21%. Price index for established houses for the weight average of the eight capital cities +4.8% during the March quarter > expectations of 3%.

11. Elders write-downs in excess of $136.9M in forestry assets for FY 2010 (ELD $1.165 -2.51%)

12. Commonwealth property office upgrades distribution guidance +4.8%. (CPA $0.935 +0.54%)

13. M2 Communications completes acquisition of Clever Communications. Expects the deal to deliver a min additional to EBITDA of $2.3M or 2.2x.

14. Despite being the number one domestic budget carrier VBA downgrade guidance to earnings for FY10 stating weaker passenger demand the major factor contributing to the outlook. The airline’s strategic alliance with Air New Zealand adds value to their trans-Tasman traffic flow. Stock is down 6% given the guidance. QAN -0.7%. Domestic flight numbers where weaker than international for both companies so QAN may have a natural hedge on the fact they have a superior international flight paths. {VBA $0.55 -7.56% ; QAN 2.82 -0.7%}

15. TD Securities – Melbourne Institute Inflation Gauge +2.9% for twelve months to April – rent, fruit & veg’s all contributing to the adjusted index reading. The jury is still out on the outcome of the RBA Board Meeting tomorrow. Financial markets have priced in the probability of a rate hike tomorrow from 25% to now 65% over the course of a week.

ASX Stock Report 30-4-10

1. Australian stocks where up +0.7% helped by strong equity markets abroad and fears of European nations’ fiscal woes subsiding. Some strong reporting from ResMed and Macquarie supported the days trade, property and financials the strongest sectors +1.94% & 0.81% respectively. Energy sector also performed well +1.14%,

• ASX 200 4807.4 +0.46%

• SPI Futures 4819 +0.31%

• Futures 11122.0 -13pts

2. Private sector credit +0.5% during March > than expectations 0.4%. RBA results indicate Year to March private credit +2.1%. Housing credit +8.5% over the year other personal credit +0.5%, business credit 0.1%. This puts a little more certainty into markets.

3. Domestic Property Prices +4.2% in March Quarter in major cities. RP Data Rismark Hedonic Home Value index, released on Friday, said property prices in the capital cities rose by an average 12.5% in the year to March 31. Given independent directors of Westpac Office Trust have today recommended the offer from MGR to unit holders makes for interesting prospects. Jonathan Senior pointed out this morning the abundant better financially positioned office REITS to invest in.

The other thing was the smaller residential property REITS and developers, GPM is trading at 50% discount to NTA. Has Trojan Equity as major s/h who are winding up their fund, John Leaver has a big stake he is an x-broker. Our analysts values sum of parts ~45c. FKP is more liquid. Moving closer to fair value. Last valued at 73c, which was then ~43% discount to book value ($1.27).

4. MQG $50.29 +4.01% reported Net Profit $1.05B year to March 31. +20% YoY. In-line with expectations. Nicholas Moore expects operating conditions to continue into the remainder of the FY.

5. RMD up 5.83% at $7.08, hits record high of A$7.12 to be the top performer in the S&P/ASX 200 after 3Q results beat consensus expectations. EPS rose to 63 cents on revenue of US$287.7 million vs market expectations of 57 cents EPS on US$270.5 million revenue. We liked this stock on the fact that revenue streams where exposed to the US >70% EBIT FY10. Now there is even more reason to get behind the stock, expecting a break out over $7.00.

6. MAP $3.14 +0.96% bairports still reporting stronger traffic numbers and many expecting above trend traffic numbers to continue. ITO $1.125 was reporting solid traffic numbers as well. the stock’s strength representative of a recovering Canadian and Australian economy. Yesterday VBA $0.595 +0.85% noted they where in talks with Air New Zealand for a strategic trans-Tasman alliance which will add value.

7. Retailer Woolies $27.10 +0.71% have lowered forecast sales growth given cyclical impact of government stimulus payments twelve months ago. More competition in the market from Aldi and now Cosco will eat away at profits but in all honesty you will not be buying this stock long term on sales growth forecasts. You will buy this stock for solid div income, people will always go down to buy their groceries at Woolies & oil prices are also helping petrol sales +3.8%.

8. We are still very bullish NWS $19.44 +0.41%. Another pretty safe bet for consumer spending. Again US earner, superior content. Chart speaks for itself. Stock is a conviction buy.

9. Origin $16.38 +1.8% updating production and sales revenue for the March Quarter. Oil prices and currency forecasts have lifted broker forecasts.

10. The banks reporting season has been relatively consistent with market expectations thus far. Next week the RBA will meet to discuss rates, we don’t expect a change given conditions at present, unless there is some material impact on debt markets from the weekend we would anticipate no change to the cash rate. Over the weekend findings from the Henry Tax Review will be released, WBC and NAB will also report next week.

ASX Stock Report 29-4-10

1. Spot Gold, USD holding prices, as Euro begins to recover but late selling closer to European markets opening suggests something else.. Asian markets followed the same trend starting stronger but finishing down, Dow futures are +3pts. The Australian equities market finished -37.2pts. Australian stocks -0.5% in morning, European sovereign debt issues not settling, money flows away from our equities market and our dollar early but dollar finished stronger +0.04% to US. ANZ disappoints reporting distributions -3c than expected. Financials and materials down >1%. Macquarie Bank will report tomorrow, NAB and WBC next week.

• ASX 200 4785.6 -0.77%

• SPI Futures 4793.0 -0.19%

2. ANZ report cash profit for 1H FY10 A$2.3B, in line with expectations. To pay interim div of 52c/share, 3cents less than consensus expectations. Mike Smith is cautions on credit outlook, professing European sovereign debt issues have created volatile credit markets. The company is still willing to expand into Asia but expects lower global economic growth than was experienced last decade. Confident Can Meet Target Of 20% Revenues From Asia By 2012

3. Plenty of StoneBridge Group flow in BHP and TLS for retail clients.

4. Arrow Energy: reporting production no material impact considering corporate activity overshadowing the stock. Cash 3Q Total Sales A$42.2M, Down 11% QoQ, Year To Date Net Gas Sales -3.8% YoY, Y-t-Date Net Gas Output 15,288 TJ, +19% YoY, Electricity Sales -15% 533,006 MWh,

5. API confirms previously provided guidance of $24.6 million for the full year, net profit after tax for the six months to February 28, 2010 of $10.33 million, up 54.5 per cent on the prior corresponding period. Revenue grew 6.7 per cent to $1.85 billion. The company declared an interim dividend of one cent per share 5.3 per cent in Priceline health and beauty stores and comparable store sales growth of two per cent had been pleasing, given uncertain consumer confidence.

6. Coal Production reporting: Aquila Resources $10.25 +0.59% (no material effect): 3Q Year To Date Coal Sales 1.9M Tons, Eagle Down Feasibility Study To Start 2Q 2010, Cash Reserves A$342.6M At End 3Q no real deviation from expectations. Gloucester Coal $12.05 -0.41%: 3Q Coking Coal Sales Up 103% On Year again no material effect as market expected. GCL still had Peabody/MCC corporate activity outweighing performance on the stock.

7. ITO $1.125 +2.27% formally MIG Key results are: Year to date (YTD) underlying proportionately consolidated revenue and EBITDA from road assets increased 6.4% and 12.2% respectively. Weighted average traffic for the quarter ended 31 March 2010 increased by 5.0% to the prior corresponding period (pcp). YTD weighted average traffic increased 2.4% compared to pcp. Intoll owns and manages interests in two toll roads – 407 ETR, Toronto, Canada and Westlink M7, Sydney, Australia. March quarter revenue numbers where higher than market expectations reflecting improving economic conditions in Australia and Canada. Catalyst for further share price moves being the sale process for Ferriovial’s 10% stake.

8. Asciano $1.71 -0.58% port activity has indicated container volumes rebounding faster in the March quarter than previously expected: 3Q Pacific National Intermodal Haulage Up 10% On Year. Continue To Take Cautious View On Remainder Of This FY. 3Q Patrick Container Ports Container Lifts Up 1% On Year To 435,000, 3Q Pacific National Coal Haulage Up 33% On Year

9. Skilled $1.36 CEO Greg Hargrave will step down after taking responsibility for poor performance. Skilled likely to miss earnings by 15%.

10. VBA $0.59 0.85% has been voted best domestic airline in a poll by Choice a leading consumer group. Regional carrier Rex was ranked second on the strength of its old-fashioned and more personalised service, while Qantas came third overall. Budget airline Tiger took out last place criticised for flight delays and its slow check-in process. Jetstar, which was ranked second-last, also came under fire for flight delays, and for its cramped seating. VBA said yesterday they had been in talks “for several months” but the discussions had so far not resulted in an agreement. Three out of four larger broking houses have recommended a buy on the stock post the announcement. Reasons include economies of scale and cost saving produced by the alliance, stronger trans-Tasman relationship and a catalyst for further upside in the JV between V Australia and Delta airlines.

11. Atlas Iron AGO.AX fell 6.7 percent to A$2.51 after it said it was going to raise A$63.5 million with a share sale to institutions, priced at A$2.49 a share, to help fund a big increase in iron ore production and shipments.

12. Sedgman wins Narrabri Coal CHPP $50m plus contract

13. Transfield Services $4.02 +2.29%: WorleyParsons JV Awarded Loy Yang Power Contract anticipates $185M from the business. Loy Yang Power Maintenance Contract For 5 Years.

14. Biotech firm Biota Holdings -22.98% after warning that royalties on its flu drug Relenza would fall 70 percent in the March quarter.

15. Mirvac have offered 0.597:1stock or 86cents for friendly takeover of Westpac office trust. Jonathan Senior our property expert has outline best smaller player picks FKP $0.845 better liquidity, GPM $0.225 -6.25%, DVN $0.325 +1.52%. All trending upward, have institutional support (GPM Trojan, John Leaver DVN – LEI, & FKP Paradice), exposed to domestic residential housing market.

16. Following on from this morning and our discussion on gold stocks, Catalpa announced today its first gold production. The gravity and carbon recovery circuits were commissioned last week, resulting in the first production gold pour of 414 ounces of dore. The dore is an alloy of gold, silver and other metals and is expected to refine to approximately 85% pure gold. Managing Director, Bruce McFadzean said ramp-up to full production capacity of 2.8Mtpa is underway and will see Catalpa producing gold at a rate of more than 130 000 ounces per annum by July this year from Edna May and 30% Cracow.

17. Tomorrow we have House price & private credit data being released domestically, GDP and employment figures coming out of the US which will add to both the RBA & the FOMC conclusions on MP respectively. RBA meet next Tuesday. FOMC stated US rates will remain between 0-0.25% for some time to come. ResMed is a company we have touched on; who have global operations will also be reporting tomorrow. More specifically 50% of earnings from the US, & 35% from Europe so it will be interesting

ASX Stock Report 28-4-10

1. As the EU falls apart, international equity markets experience capital outflows as investors lose confidence in global markets. Gold $1,172.30 highest since Dec. 4th, USD & JPY started higher both perceived as safer currencies. By the end of trade today the Euro began clawing back as did other currencies, DJIA Futures +0.07%. We can hope for a better day’s trade ahead.

• ASX 200 4822.8 -1.17%

• SPI Futures 4826.0 -1.19%

2. Stonebridge flow for retail investors on the buy side for BSL and the sell side for RIO. Instos saw some good flow in gold stocks.

3. RBA assistant governor Guy Debelle argues the debt crises in Greece & Portugal has little effect on the Australian banking system, despite its effect on global sentiment and risk appetite. Our banks are all reporting results in coming weeks, starting tomorrow with ANZ. You can expect them to be better than expected, with money back in the economy and asset prices coming back, spreads on mortgage lending rates are still solid and there being a lack of competition in the industry meaning less profit sharing. The average s.v.m. rate 7.13% where they borrow in overnight cash market at a rate of 4.25%. A good margin. Our banks are perceived by the global investment community as operating on solid foundations and would be in most cases a solid buy at present.

4. ABS weighted median CPI used by RBA to track underlying inflation +3.1% on Year, +0.8% QoQ. Australia 1Q CPI +2.9% On Yr; Consensus +2.8%, 1Q CPI +0.9% On Qtr; Consensus +0.8% Australian 3-Year Futures Down 0.02 To 94.71 After CPI Data. Federal Treasure Wayne Swan commented this afternoon on the outlook for inflation remaining moderate in the near term as it was over 2009, with reference to the CPI figures. The government focus will be on building capacity and sustaining low inflation, Really what is he saying? Inflation is low – so interest rate risk fears may subside.

5. ROC $0.455 -1.09% Oil: Sales Revenue worse than expected US$49.3M In March Quarter, Down 3% From Previous Quarter; Operations Have Continued To Perform Well

6. Whitehaven Coal $5.46 -3.19%: 3Q Saleable Coal Output 853,000 Tons, Up 12% On Year, 3Q Saleable Coal Output 853,000 Tons, Up 12% On Year, 3Q Coal Sales 1.1M Tons, Up 5% On Year, Cash On Hand A$164M At March 31

7. MAP $3.09 -2.83%: Brussels Airport 1Q Revenue Up 4.5% On Year*DJ, Brussels Airport 1Q Underlying EBITDA Up 16.5% On Year, Brussels Airport 1Q EBITDA EUR37.6M, Up 19.4% On Year

8. Beach Energy $0.805 -1.83%: FY10 Output Guidance 7.4M BOE; Cut On Cooper Basin Flooding, 3Q Revenue A$102.3M, Down 24% On Quarter, 3Q Output 1.725M BOE, Down 11% On Quarter,

9. Macarthur Coal $15.90 -0.87%: Confident Of Meeting FY Sales Guidance Of 4.8M-5.0M Tons*DJ Macarthur Coal: Demand For Metallurgical Coal Strengthened During Quarter, 3Q Total Coal Sales 1.23M Metric Tons

10. David Jones $4.72 -0.63%: Quicksilver, Roxy Children’s Apparel To Be Sold

11. QBE $21.59 -1.19% Still Has Significant Allowance Of About A$810M For Remainder Of 2010, Estimated Large Risk, Catastrophe Claims For Year To Date A$470M

12. ANZ reporting tomorrow, MQG on Friday & WBC NAB next week. NWS is also reporting next Wednesday. Federal Reserve has started its first day of a two-day meeting for monetary policy making in the States. Austerity measures in the EU may still be a major concern for equity markets. We can only wait to see what will happen abroad tonight.

ASX Stock Report 23-4-10

1. Weak lead from Europe, early selling overdone as market gets some buying back into it throughout the middle of the trading day. Then post 1pm selling again into the later afternoon RBA Governor Glen Stevens’ commentary on economic outlook impacts on the dollar.

• ASX 200 4881.5 -0.53%

• Futures 200 4871 -0.16%

• DJIA Index Futures 11,056 -12pts, FTSE 100 Futures 5,632.00-48pts

2. Portfolio managers heavy on the buy side with LGL $3.95 +0.77%, QBE $21.62 -0.83% & STO $13.83 -0.93%, insto support on GPM $0.225 +7.14% and good flow in NWS $19.86 -0.2%, FMG $5.01 -1.38%, ORG $16.42 -0.18%. Lihir reported production guidance today which was positive; QBE and NWS are internationally exposed plays. Something we believe will be a competitive advantage to business at present.

3. Glen Stevens has today disclosed to the market a more supportive stance on interest rates. Rates where now closer to the past 10-12yr average.

4. Inflation targeting is now on the agenda “The Board’s focus will be on doing our part to secure a durable expansion and on achieving the medium-term target for inflation,” he said. Demand for our natural resources has been putting price pressure on the market, Mr Stevens expects the terms of trade to revert back to average.

5. There has been 1.25% added to the cash rate since October ’09. Phrases like “sustaining durable expansion”, “pretty close to average” would suggest a more passive approach to monetary policy is imminent and the fact that the dollar slipped 15cents after his address at 1pm is a good indication that the market thinks so too.

6. We’re at the end of what seems to be a long cycle of extreme depressed economic sentiment. So what happens now? The argument for offshore trades is a good one we believe, as soon as growth and inflation filters into developed economies and their central banks begin to focus on contractionary monetary policy then foreign currency plays will be the go. For us especially in the US. We’ve already seen during the week the BoC become hawkish on policy stance in Canadian press interest rates suspected +50bps in June.

7. As discussed this morning NWS is the most striking US recovery play. UK mortgage approvals +2K over consensus suggesting greater demand in UK housing, Pound Sterling is trading at extraordinarily high rates, Californian house prices +23% from Feb09. LLC $8.81 -0.9% could be a good play here with 15% of earnings derived in the US and 28% in the UK.

8. We have an international focus but it does not mean that we lack the possibility to trade off opportunities down under, simply that the growth rate offshore will be marginally greater than what we experience in Aus. There is a time lag of recovery from more affected international developed nations.

9. Woodside Petroleum $46.31 -1.13%: 1Q Revenue US$1.03B, Up 43% YoY. Down 10% On 4Q09, 1Q Sales 18.7M BOE, Down 9% On Year, 1Q Sales 18.7M BOE, Down 9% On 4Q09, 1Q Output 19.2M BOE, Down 7% YoY, 1Q Output 19.2M BOE, Down 5% On 4Q09WOODSIDE Q1 PRODUCTION DOWN 5PCT ON PREV QTR AND 7PCT ON PCP,

10. Lihir +10% production guidance from 1MOz to 1.1MOz for full year guidance. 1Q Unit Total Cash Costs US$515/Oz, 1Q Aggregate Cash Costs US$118M, Down 5% On Prior Quarter, Lihir Island Expansion Continues On Schedule, Within Budget.

11. MCC $16.15 -0.19% opens doors for Peabody Due Diligence. Peabody have till May 3rd to carry out due diligence on their offer.

12. Housing Institute Australia blames skills shortages in housing sector for undersupply of residential property. HIA’s availability index -37.5% QoQ, trade prices index +1.1& in March.

13. Down under best smaller player picks FKP $0.855 better liquidity, GPM $0.225 +7.14%, DVN $0.335 +1.52%. All trending upward, have institutional support (GPM Trojan, John Leaver DVN – LEI, & FKP Paradice) and exposed to domestic residential housing market.

14. AMP NZ Office Trust: 3Q Rental Revenues +4.9%, 3Q Distributable Profit +11.9% On Year, On Track For Solid FY Performance After 3Q Result

15. Map $3.08 +0.33%: 1Q Sydney Airport Total Capital Expenditure A$30.8M, 1Q Sydney Airport Revenue A$228.6M, +12% YoY, 1Q Sydney Airport EBITDA A$187.1M, +13% YoY.

16. CSR $1.785 +5.62% Federal Court upheld appeal for them to split their sugar business –to be relisted as Sucrogen, from construction business carrying asbestos compensation liabilities. CSL $33.94 -7.27% discounted. Baxter International reports weakness on blood plasma-collection business in US. CSL is the second biggest provider of blood plasma products in the US, behind Baxter. CSL’s blood products business, CSL Behring, generates 42% of its revenue in the US, the US accounts for 37% of total earnings for CSL. CSL does not change guidance for FY.

17. In the week to follow hometrack housing survey from the UK & consumer confidence survey, US consumer confidence and mortgage apps could further add to developments on housing data below, as well as firm our views on international markets recovering. NAB business confidence survey, HIA home sales data and private sector credit could add to

ASX Stock Report 22-4-10

1. Falling Car Sales, skilled vacancies, leading economic indicators domestic growth greater than expected and subsequent interest rate fears consumer staples -1.32% Gold +0.08% Oil+0.35% materials –1.42%. Look to international economy’s growth rates catching up to our own suggest a theme on international recovery. NWS $1990 -0.05% the strongest, Aristocrat to US recovery – DXS $0.795 -1.24% and IOF $0.60 +0.84% property exposed to US also. Domestic Residential property market still is an option on supply shortages. DVN$ 0.33, FKP $0.855 +5.56% and GPM $0.21 +2.44% getting some institutional support, smaller players trading at discounts to Book and NTA. Or you could play it with materials Boral $5.85 -0.51%, Brickworks $13.43 -0.3%, James Hardie $7.19 -0.83% – exposed to US, FBU $6.47 -0.61% global operator.

• ASX 200 4907.4 -0.95%

• SPI Futures 4907.0 (-)

• DJIA Index 11,045.00 -14pts

2. Wesfarmers: Retail Business Strategies On Track, Cautious On 4Q Outlook, Coles Experienced Deflation In 3Q Of Around 1%, 3Q results: Coles Sales +4.9% YoY A$6.92B Kmart Sales +4.0% At A$824M, Target Sales Steady At A$725M, Office Supplies Sales A$1.93B +7.9%, Bunnings sales +13% in 1H FY10.

3. ABS Car sales -2.7% (seasonally adjusted) in March YoY. Passenger vehicles +0.7%, QLD -5.5%. New Vehicle sales +19.2%.

4. Fletcher Building Scaling Back Production At Glasswool Insulation Plant In Melbourne, Confirms FY Guidance To Fall In Analysts’ Range Of NZ$278M To NZ$303M, FY Op Earnings For Australian Insulation Business Forecast At NZ$12M

5. Caltex $11.85 -3.42% 1Q profit $130M – STO $13.96 -1.76% long dated calls. Fundamentally on a switch from Metals to Energy.

6. NSL transitions to local management team in India; comprise of Country Manager, mines manager, Safety Quality Production Geology and Finance.

7. Coal of Africa $2.48 -0.8% AGM today – SDL $0.165 -2.94%. KRL $0.215 +7.5%

8. NewCrest $33.88 -0.26% cut annual Gold production forecast.