From bad to worse
LOU”S VIEW Thursday 15th January
Dow Jones down 248 @ 8,200( please don’t go through the critical 8,000 level!)
Spi Futures down 104 @ 3561
Gold down 11 @ $810
Oil down 34 cents @ $37.44
Copper down $5.85 @ $148.85 lb
CRB Index down 2.98 @ 219.21 (that’s a result!)
The Hindsight Stuff
This is getting like watching a train crash only in slow motion,with “freeze frames” and rewinds showing all the gory detail. For those of you who have seen enough or are even bored by the same old story just a different day, then skip this section.
1/The U.S Retail sales data fell a massive 2.7%(expeceted -1%).
2/Deutsche bank,Germany’s biggest posted a $6bln 4th Q loss.
3/Analysts are now saying HSBC, Europe’s biggest bank by far will halve its dividend and needs to raise $30bln in capital soon.
4/Fed Gov’ Bernanke said Obama’s (I swear one day someone will call him Osama) $770 bln package won’t work unless it is directed at the banks to clear their toxic debts. Hey Ben, just exactly how much do these guys need?You’ve already given Citibank $35 bln, so another $50 bln perhaps? These figures are something out of an Austin Powers movie!
5/Fed’s “Black book”(their own economic research) just couldn’t be more negative, well it could but we don’t want to create a panic, eh guys?
That’s enough(Ed’). OK, expect the horror story to continue for several more months, maybe until 3rd Q 2009, with the most eagerly awaited report tonight coming from America’s bluest of blue chips, JP Morgan. Analysts are expecting a profit of just 5 cents per share(yep, profit!) however the CEO in December said the 4th Q was “Terrible”. Incidentally,the term “Blue Chip” is derived from Monte Carlo’s highest betting chip.
Our market rallied on better than expected housing data and every commentators favourite line “bargain hunting”..that and “short covering” are my favourite throw away lines.Guys, try seeing chart levels being tested or is that all too hard?(like BHP bouncing off a major support line at $30.30)
The Foresight
Another big day ahead with OZ employment expected to hit 4.5% and shedding 20,000 jobs…guess what I think the risk is, try 40,000 after the ANZ’s job ad’s huge fall earlier in the week. The RBA bulletin published (wont be pretty). The ECB will cut rates tonight, 50bp a given with futures pricing in 75 bp.(yep, even this good news is priced into stocks.) Then we have a raft of U.S company reports, the key being JP Morgan. Fridays see’s a raft of U.S economic data, I won’t bore you as we know the score by now.
Within a few weeks our banks start reporting and these will be the most eargerly awaited figures with emphasis on the dividend payments. The guy’s at Merrill Lynch are forecasting ANZ will cut dividends by 11%, CBA by 8%, NAB by 5% with Westpac only doing the decent thing.Again, if true then they are still offering huge returns. Stay long ANZ and NAB; reservations on CBA as their domestic bad loan book could be the can of worms.
Yesterday I took profits on SUNCORP @$8.90 (long $7.40)
Good to see UBS taking a 5.1% stake in RHG.I bought this stock for about 30 clients at 11 cents some 5 months ago…enjoy the ride!
Have a great day and don’t look at the screens too much!
QUOTE OF THE DAY
“No matter how far you go down one of life’s wrong roads you must always turn back.” Old Turkish Proverb.