;">A rebound seems to be underway in the Chinese sharemarket after the big fall this year.
That's because, as the AMP's chief economist, Dr Shane Oliver suggests, the economy could be having a soft landing and not the crunch that many investors had feared (as did governments offshore).
If that happens, its good news for Australia, exporters in resources and for the market.
China’s economy is normalising not collapsing.
Contrary to worries about a hard landing, our view is that China’s economy is behaving just as the Government has hoped and growth is simply normalising after last year’s surge.
After the massive policy stimulus of 2008/early 2009 China’s economy surged with growth reaching 11.9% over the year to the March quarter.
Fears of overheating came to the fore with surging property prices in some cities, rising inflation and unsustainable loan growth.
The market is down 23. The SFE Futures were down 17 this morning.
\Wall Street closed down 30 having been down 110 at worst and up 87 at best. Initial jobless claims fell less than expected and company results rather flopped.
The metal prices were up, Gold up $8 and the oil price up. The A$ at 90.07c is holding as the US$ hits a two months low against the Euro and falls 8.7% from the June high. Chinese officials declare inflation is under control. US 2nd Q GDP numbers tonight offer more fear than hope.
In other news…
Macquarie Group have had another profit warning. The second profits ‘caution’ in a month. They say results from Macquarie Capital, Macquarie Securities and the Fixed Income, Currencies and Commodities (FICC) divisions are expected to fall in 2011 unless market conditions improve. Price down 3.83% or 146c to 3692c.
Graincorp (GNC) and AWB have announced a $2bn mergerwhich is effectively a takeover of AWB by Graincorp at a small (10%) premium to the AWB price. For 5.75 AWB shares AWB shareholders get 1 GNC share. AWB have also announced a profits warning which perhaps explains the lack of a premium bid price. AWB is up 1.5c to 97c. GNC is down 10c to 592c.
This is a daily market report which is provided by our in-house Stockbroker Kinetic Securities.”Contact Daniel Chung at Kinetic securities on (02) 9295 9838 or
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Monitor to Acquire up to 90% Stake Iin Onshore Trinidad Oilfields & Local Drilling Company.
Highlights:
Monitor signs HOA to acquire up to a 90% interest in three production licences in producing onshore oilfields in Trinidad;
Following the Acquisition Monitor will be a fully-funded oil production company with a significant daily production profile and identified exploration upside; Independent experts Forrest A. Garb and Associates, Inc1 have assessed that the producing fields contain oil reserves of:
o Proved plus probable (2P) of 4.8 million barrels o Undeveloped Prospective Resources of 19.9 million barrels;
Current production at the Project is approximately 700 bopd and, Monitor has a planned work programme to lift production to more than 3500 bopd;
Acquisition comes with established drilling inventory (9 rigs), personnel and operations all in place on site.
Activities Report for the Quarter Ended June 30th 2010
Highlights
Production Focus has completed its second full year of production, generating a record 62,300 ounces at a total cash cost of A$792/oz in the year to June 30, 2010. This is a 52% increase on the previous year’s production of 41,400 ounces. Production during the June Quarter, which comprised just 52 milling days, totalled 164,919 tonnes @ 2.5g/t for 12,660 ounces. This excludes 33 days of toll milling and a six-day maintenance shutdown.
Reserves Focus’ reserves continue to grow, with open pit reserves now at 1,490,000 tonnes @ 1.8g/t and underground reserves growing to 954,000 tonnes @ 3.9g/t for a total combined position of 2,483,000 tonnes for 207,900 ounces in reserves and stocks.
Exploration and Resources Focus reached a key milestone in its development during the quarter, with its resource base climbing above two million ounces for the first time. Highlights of the resource growth include an increase of the underground resources at the Tindals Mining Centre to 2.04Mt @ 4.9g/t for 324,000oz following an 80% increase in the Cyanide resource to 117,800oz @ 5.5g/t.
In today's video we look at the technical aspects of Amazon and see what's causing it not to go up at this point in time.
Analyzing the market in-depth, we can see that Amazon has hurt itself technically. According to the chart, we can anticipate that it is going to take some time to repair or even overcome the current level resistance.
This new short video outlines the areas we feel must be challenged to change the present trend. We also look at some downside target zones that may be possible for this stock.
As always our videos are free to watch and there are no registration requirements.
We would love to hear your thoughts on Amazon.
Click here to watch today's free video compliments of INOTV and Asxnewbie..
The S&P/ASX 200 ended day higher by 32 points to 4,529.90.
The CPI figures came out yesterday, which showed inflation increased 0.6% for the June quarter, and 3.1% since June 2009. However, it's now 'predicted' that the RBA will keep rates on hold when they meet Tuesday next week.
The FTSE was 45 points lower ending the session at 5,319.68. The banking sector dragged the index down as many investors took profits from yesterday's gains.
The market also reacted badly to comments from Mervyn King, Governor of the Bank of England (BoE). King warned that a sustained recovery for the UK was uncertain, even though there had been a recent increase in output.
What's that you say? Commodities have already made a comeback. They did seven years ago when the China boom started.
Yes, I know that, but it's not the commodities like iron ore, copper, oil or natural gas that I'm referring to.
Instead I'm referring to what they call soft commodities.
In a nutshell, pretty much any commodity that is used in the production of food can be considered a soft commodity - cocoa and sugar are obvious examples.
Despite that, few people or mainstream investors have any interest in something as dull sounding as soft commodities.
The only thing most people would know about them is from watching movies like Trading Places where Eddie Murphy and Dan Ackroyd make a killing from trading frozen concentrated orange juice (FCOJ) futures.
The market is down 19. The SFE Futures were down 23 this morning.
Wall Street closed down 39 overnight. Disappointing economic data stalled the Dow’s recent run. Nearly three quarters of the companies that have announced results so far have exceeded analysts expectations.Gold recovered $2.40 to $1160.40 after falling over $20 the previous day, the Oil price fell 51c to $76.99 and the Aussie dollar fell to 89.15c from a high of 90.69c after the CPI numbers yesterday.
In other news…
* Talk of Rio Tinto and majority shareholder, Chinalco, formally committing to their West African Simandou iron ore JV at a signing ceremony. Shares in Chinalco’s listed unit, Aluminum Corp of China, are suspended from trading pending discussions of a significant issue. RIO up 6c to 7110c.
* Lihir Gold (LGL) CEO says Newcrest Mining’s (NCM) $9.7bn takeover offer could be trumped by a superior bid. NCM down 11c to 3267c, LGL unchanged at 406c.
The pressure is off interest rates and the Reserve Bank can take a bow for getting its inflation forecast right.
Its forecast for inflation in the June quarter, published in last week's Minutes of the July board meeting, was spot on
"Consumer price inflation data for the June quarter would be published on 28 July, and the staff expected them to show the underlying rate of inflation continuing to moderate in year-ended terms, to be below 3 per cent for the first time in three years.
"CPI inflation was, however, expected to rise to a little above 3 per cent, partly due to the effects of higher taxes on tobacco."
And so it was with the quarterly rate rising 0.6% (down from 0.9% in the March quarter) for an annual rate of 3.1%, up from the 2.9% in the three months to March.
As well as local inflation and the health of Europe, the Reserve Bank has also been concerned that China's attempts to slow its strongly growing economy, might come unstuck.
We know consumer and wholesale price inflation in Australia is easing, Europe is improving and yesterday the Chinese economy got a tick from the country's central bank and the International Monetary Fund.
The attitude of The People's Bank of China (PBOC) was understandable; it would be very rare for it to tell the world that the economy was going to hell in a hand basket.
But its judgment is backed by what we have learned from the flow of economic data in the past month.
