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Well. the old "up by the stairs, down by the elevator" mantra held true... as I mentioned yesterday, I was getting skittish - short term because of the failure of cerrtain relationships to hold together in a sensible way, and longer term because I reckon I'm one of about eight people in the entire domestic financial analysis segment who understands why declining margins and a rising labour share of value added will result in declining RoE and a declining market 'going forward' (as they say in Management courses).
The theory as to why current configurations cannot be sustained is absolutely straightforward and rests on three basic facts:
- the capital share of value added is at a near-record (and cannot be sustained);
- leverage is very high which is biasing RoA upwards (and cannot be sustained as debt is getting more costly as the yield curve starts to back up); and
- the global economy is slowing.
Western economies are now overextended, and there is no mechanism by which they can be decoupled from the fruits of their debt-driven recent binges on housing and consumer gimcracks. This ends badly, and no amount of diversionary bullshit about 'bird flu' is going to avert it.
Speaking of 'bird flu' and other associated scaremongering (which always results in the government throwing money towards some interest lobby: in this case, Big Pharma)...
Remember when SARS was going to kill us all? (The final death toll: about 65). That was during the attempt to divert public attention from the fraying rationale for the Iraq War. Now that the 'powers that be' have decided to attack Iran and/or Syria, the same mechanism is being used... talk of Iran's nookular weapons... and a 'pandemic crisis' that will never eventuate - the latter is to keep us off-balance and muffle the media's focus (in case any of the mainstream whore media decide to startt picking at the rotting corpse of the pathetic NeoCon case for the attack on Iran).
Finally - if there is ever a public vaccination campaign for this Bird Flu bullshit, DO NOT TURN UP. Early-stage, rushed-to-production vaccines are almost invariably more dangerous than their benefits... even those who got early treatment with the Salk vaccine for polio will attest to that.
Major Market Indices
The broad market - the ASX All Ordinaries (XAO) - fell by 76.60 points (-1.73%), finishing at 4345.90 points. The index hit an intraday high of 4422.50 (4425-ish) at the open, and fell pretty much throughout the session, ending on its low tick at 4345.9 points.
Total volume traded on the ASX was 1.07 billion units, 1.2% below its 10-day average. Of the 485 stocks in the index, 264 fell while 92 managed a gain. Volume was tilted in favour of the losers by a just-plain-silly margin of 15.1:1, with 519.75 million shares traded in losers while a mere 34.37 million shares traded in the day's gainers.
The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - fell by 82.10 points (-1.84%), finishing at 4377.20 points.
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - fell by 42.20 points (-1.77%), finishing at 2342.70 points. Within the index members, there was just one 1 that rose (Woolies), and 19 losers. Total volume in rising issues within the ASX20 amounted to 4.11m shares (i.e., the turnover in Woolies) while volume in the losers totalled 113.68m units.
As I mentioned, the "major winners in the 'big guns' list" is short... one item:
- Woolworths (WOW), +$0.130 (0.83%)(and getting more costly as the yield curve starts to back up) to $15.790 on volume of 4.11m shares.
The biggest percentage losers in the big-guns reads like yesterday's bounce leaders...
- BHP Billiton (BHP), -$0.700 (3.37%) to $20.050 on volume of 19.62m shares;
- Rio Tinto (RIO), -$1.71 (2.95%) to $56.19 on volume of 2.9m shares;
- QBE Insurance Group (QBE), -$0.50 (2.72%) to $17.90 on volume of 2.08m shares;
- AMP Limited (AMP), -$0.16 (2.17%) to $7.22 on volume of 7.3m shares; and
- Woodside Petroleum (WPL), -$0.69 (2.13%) to $31.71 on volume of 3.28m shares.
At the smaller end of the market's capitalisation scale, the ASX Small Ordinaries Index (XSO) - the only place where underexploited value exists with any regularity - fell by 39.60 points (-1.55%), finishing at 2522.00 points. The major winners in the "pop-guns" were -
- Citect Corporation (CTL), +$0.425 (38.99%) to $1.515 on volume of 1.75m shares;
- Perilya (PEM), +$0.045 (5.33%) to $0.890 on volume of 1.47m shares; and
- Symex Holdings (SYM), +$0.060 (4.51%) to $1.390 on volume of 1.22m shares; and
- Pacifica Group (PBB), +$0.080 (4.49%) to $1.860 on volume of 812,000 shares; and
- Emperor Mines (EMP), +$0.010 (3.7%) to $0.280 on volume of 25,000 shares.
The losingest-little-guys for the session were (in order of decline):
- Globe International (GLB), -$0.030 (8.11%) to $0.340 on volume of 408,000 shares;
- Genetic Technologies (GTG), -$0.040 (7.55%) to $0.490 on volume of 946,000 shares; and
- Dragon Mining (DRA), -$0.010 (6.25%) to $0.150 on volume of 949,000 shares; and
- Hardman Resources (HDR), -$0.125 (5.92%) to $1.985 on volume of 4.91m shares; and
- Perseverance Corporation (PSV), -$0.020 (5.48%) to $0.345 on volume of 1.54m shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 4345.9 | -76.6 | -1.73% | 622.22m |
| XTL | S&P/ASX 20 | 2342.7 | -42.2 | -1.77% | 117.78m |
| XFL | S&P/ASX 50 | 4279 | -83.3 | -1.91% | 252.53m |
| XTO | S&P/ASX 100 | 3548.6 | -67.3 | -1.86% | 411.15m |
| XJO | S&P/ASX 200 | 4377.2 | -82.1 | -1.84% | 500.81m |
| XKO | S&P/ASX 300 | 4374.5 | -81.5 | -1.83% | 0 |
| XMD | S&P/ASX Mid-Cap 50 | 4390.7 | -70 | -1.57% | 0 |
| XSO | S&P/ASX Small Ordinaries | 2522 | -39.6 | -1.55% | 163.19m |
All Ordinaries Market Internals
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 1 | 5 | 22 | 92 | 38 | 288 |
| Declines | 19 | 88 | 153 | 264 | 120 | 647 |
| Advancing Volume | 4.11m | 8.38m | 16.85m | 34.37m | 18.57m | 200.68m |
| Declining Volume | 113.68m | 374.42m | 439.81m | 519.75m | 126.6m | 774.98m |
S&P/ASX200 GICS Sector Indices
No sector rose for the session - the 'least worst' sector was XSJ Consumer Staples which lost -0.21% to 5669.10 points.
Conversely, the worst-performed sector today was XMJ Materials which lost 3.18% to 8032.20 points. The sector was dragged lower by- Newcrest Mining (NCM), -$2.180 (10.8%) to $18.000 on volume of 6m shares;
- Lihir Gold (LHG), -$0.110 (6.25%) to $1.650 on volume of 15.46m shares;
- Croesus Mining (CRS), -$0.020 (5.33%) to $0.355 on volume of 2.47m shares;
- Zinifex (ZFX), -$0.260 (5.19%) to $4.750 on volume of 7.66m shares; and
- Centennial Coal Company (CEY), -$0.200 (4.48%) to $4.260 on volume of 1.95m shares.
Just in front of last place on the sector table was XEJ Energy which lost 3.06% to 9790.80 points. The biggest drag on the sector - in 'point' terms - was our old pal Woodside (mostly through its massive weighting in the sector), although WPL doesn't even figure on the list of the five biggest percentage losers in the sector, which were...
- Hardman Resources (HDR), -$0.125 (5.92%) to $1.985 on volume of 4.91m shares;
- Oil Search (OSH), -$0.200 (5.76%) to $3.270 on volume of 8.83m shares;
- Arc Energy (ARQ), -$0.085 (4.25%) to $1.915 on volume of 865,000 shares;
- Santos (STO), -$0.410 (3.51%) to $11.280 on volume of 1.68m shares; and
- Australian Worldwide Exploration (AWE), -$0.070 (3.29%) to $2.060 on volume of 1.03m shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XSJ | Consumer Staples | 5669.1 | -11.8 | -0.21% | 31.76m |
| XPJ | Property Trusts | 1796.7 | -14 | -0.77% | 76.67m |
| XDJ | Consumer Discretionary | 2224.5 | -24.9 | -1.11% | 31.78m |
| XIJ | Information Technology | 419.4 | -5.5 | -1.29% | 3.87m |
| XHJ | Healthcare | 5790.9 | -80.1 | -1.36% | 14.39m |
| XFJ | Financials | 5196.9 | -76.5 | -1.45% | 128.84m |
| XTJ | Telecommunications | 1493.3 | -23 | -1.52% | 43.51m |
| XXJ | ASX200 Financials ex Property Trusts | 5341.7 | -88.9 | -1.64% | 57.19m |
| XUJ | Utilities | 5055 | -101.6 | -1.97% | 5.92m |
| XNJ | Industrials | 4943.9 | -107.6 | -2.13% | 82.71m |
| XEJ | Energy | 9790.8 | -308.6 | -3.06% | 29.99m |
| XMJ | Materials | 8032.2 | -263.5 | -3.18% | 126.54m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| TLS | Telstra Corporation | 4.07 | -0.06 | -1.45% | 41.23m |
| NLX | Nylex | 0.26 | -0.02 | -5.45% | 29.96m |
| RPT | Redport | 0.11 | -0.02 | -12% | 28.79m |
| BHP | BHP Billiton | 20.05 | -0.7 | -3.37% | 19.62m |
| MIG | Macquarie Infrastructure Group | 3.41 | -0.16 | -4.48% | 17.8m |
| MAP | Macquarie Airports | 2.96 | -0.05 | -1.66% | 17.08m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| CTL | Citect Corporation | 1.52 | 0.43 | 38.99% | 1.75m |
| LOK | Looksmart | 0.87 | 0.12 | 16% | 136651 |
| PEM | Perilya | 0.89 | 0.05 | 5.33% | 1.47m |
| AJL | AJ Lucas Group | 0.96 | 0.05 | 4.95% | 211598 |
| SYM | Symex Holdings | 1.39 | 0.06 | 4.51% | 1.22m |
All Ords Percentage Decliners
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| NCM | Newcrest Mining | 18 | -2.18 | -10.8% | 6m |
| GLB | Globe International | 0.34 | -0.03 | -8.11% | 407529 |
| GTG | Genetic Technologies | 0.49 | -0.04 | -7.55% | 945717 |
| LHG | Lihir Gold | 1.65 | -0.11 | -6.25% | 15.46m |
| DRA | Dragon Mining | 0.15 | -0.01 | -6.25% | 948563 |
Elsewhere in the Region...
Regional Indices
| Country | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| New Zealand | NZSE50 | 3301.482 | -45.37 | -1.36% | 22.15m |
| Japan | Nikkei 225 | 13129.49 | -222.75 | -1.67% | 0 |
| Korea | KOSPI | 1153.13 | -33.09 | -2.79% | 558525 |
| Singapore | Straits Times | 2230.7 | -53.46 | -2.34% | 0 |
| Hong Kong | Hang Seng | 14355.37 | -242.03 | -1.66% | 274.23m |
| Malaysia | KLSE Comp | 910.76 | -11.88 | -1.29% | 0 |
