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As an erstwhile junior academic (at a think tank masterfully led by the Economic Yoda, Dicko), it makes me laugh when I read about how Ben "Helicopter" Bernanke (whose retirement is now three months overdue... ) is an expert on the Depression.
The moment I read that, I though "Oh Jeebus... he's a bloody essay-writer."
There are two types of economist, Dearest Reader... those who can do sums, and those we used to call essay-writers. Some of the folks who can do sums can also write essays - essay-writing is not a particularly hard skill to master. But generally speaking, essay-writing economists are almost completely innumerate.
Folks assert (by 'folks' I mean economic historians as a group) that one can be an 'economic historian' and do decent analysis without having any technical skill whatsoever (by 'technical skill' I mean the ability to analyse data using mathematical tools... the ability to 'do sums'). I disagree.
Folks like Mises and Hayek were somewhat 'anti-sums' (they didn't like the idea of trying to forecast stuff, for example), but although I agree with their underlying economics, this antipathy to numerical analysis is something I find baffling. So long as one doesn't view analysis of reduced-form evidence as an exercise in the generation of Gospel Truth, then mathematical modelling - done properly - can be and is a very useful tool.
So... Dr Helicopter knows all about the Great Depression, and yet his recipe for preventing a disaster was astraight out of the Weimar Republic. If push came to shove and there was evidence in the government statistics of deflation, Dr Helicopter promised money printing. I wonder if he read anything about the Weimar Republic during his doctorate? (See how fair I am being - I have not required him to move away from the first half of the 20th century, although he could also have looks at the Argentine hyperinflation as well).
Major Market Indices
The broad market - the All Ordinaries (XAO) - advanced almost imperceptibly, rising 0.5 points (0.01%), finishing at 5075.9 points (5075-ish). The index hit an intraday high of 5077.6 at 3:37 pm, while the low for the day was 5023.2 (2025-ish) - set at 11:54 am (noon-ish) Sydney time.
Total volume traded on the ASX was soft at 1.22 billion units, 15.7% below its 10-day average which is itself declining. The ASX's daily listing of all stocks included 1338 different 3-letter FPO's which traded (i.e., had non-zero trade volume). Of these, 541 issues rose, with volume in rising issues totalling 634.4 million units. Conversely (or even contrariwise), 510 stocks lost ground for the day, with aggregate volume traded of 481.2 million shares.
Of the 494 All Ordinaries components, 235 rose while 189 fell. Aggregate volume within the All Ords was evenly split - 368.02 million shares traded in gainers while 377.01 million shares traded in the day's losers.
The Index that forms the cash basis for the SFE's Share Price Index Futures - the S&P/ASX 200 (XJO) - fell mildly, losing 6.2 points (0.12%), closing out the session at 5005.6 points.
| Name | Close | +/-(%) |
|---|---|---|
| All Ordinaries | 5075.90 | 0.50 (0.0%) |
| ASX 50 | 4910.90 | -16.90 (0.3%) |
| ASX 200 | 5005.60 | -6.20 (0.1%) |
| ASX 300 | 5001.10 | -4.40 (0.1%) |
| ASX Mid-Cap 50 | 4880.00 | 23.90 (0.5%) |
| ASX Small Ordinaries | 2882.50 | 34.20 (1.2%) |
| ASX 20 | 2822.80 | -9.60 (0.3%) |
| ASX 100 | 4054.10 | -9.30 (0.2%) |
The "heavy hitters" of the Australian market - the ASX 20 Leaders (XTL) - slid modestly, falling 9.6 points (0.34%), closing out the session at 2822.8 points.
Among the 20 big guns, 8 index components finished to the upside, and of the rest, 12 closed lower for the session. Total index volume was just 106.53 million units [note to self - the seems low]; 8 index components rose, with rising volume amounting to 55.07 million shares, while the 12 decliners had volume traded totalling 51.46 million units. The major percentage gainers within the index were
- QBE Insurance Group Limited (QBE), +$0.71 (3.3%) to $22.20 on volume of 2.3 million shares;
- Wesfarmers Limited (WES), +$0.67 (2%) to $34.17 on volume of 2.2 million shares;
- BHP Billiton Limited (BHP), +$0.71 (1.86%) to $38.91 on volume of 8.7 million shares;
- Rio Tinto Limited (RIO), +$2.18 (1.84%) to $120.67 on volume of 524.9 thousand shares; and
- Westfield Group (WDC), +$0.23 (1.46%) to $15.95 on volume of 5 million shares.
On the less salubrious side of the big-cap fence, the following stocks were the worst-performed within the index:
- CSL Limited (CSL), -$3.45 (9.4%) to $33.25 on volume of 5 million shares;
- Australia And New Zealand Banking Group Limited (ANZ), -$0.69 (3.67%) to $18.11 on volume of 9.3 million shares;
- Brambles Limited (BXB), -$0.27 (3.25%) to $8.03 on volume of 2.4 million shares;
- Macquarie Group Limited (MQG), -$1.46 (3.04%) to $46.64 on volume of 2.1 million shares; and
- National Australia Bank Limited (NAB), -$0.67 (2.37%) to $27.65 on volume of 5.4 million shares.
At the other end of the market-cap spectrum is the ASX Small Ordinaries (XSO) . The minnows posted a gain, moving up 34.2 points (1.20%), closing out the session at 2882.5 points. Ahhh rotation, you've still not yet been discovered as a fraud.
The 195 stocks which make up the index traded a total of 302.69 million units: volume in the 104 gainers totalling 138.89 million shares, with trade totalling 153.19 million units in the index's 75 declining components. The major percentage gainers within the index were- Kingsgate Consolidated Limited (KCN), +$1.31 (27.93%) to $6.00 on volume of 2.2 million shares;
- Western Areas NL (WSA), +$1.10 (14.1%) to $8.90 on volume of 1.1 million shares;
- City Pacific Limited (CIY), +$0.04 (14%) to $0.28 on volume of 147.2 thousand shares;
- Sino Gold Mining Limited (SGX), +$0.72 (13.19%) to $6.18 on volume of 1.5 million shares; and
- Great Southern Limited (GTP), +$0.08 (12.21%) to $0.74 on volume of 1.8 million shares.
In the red-zone of the little-stock index, the following list represents the biggest downers (in terms of percentage decline):
- Macquarie DDR Trust (MDT), -$0.04 (15.69%) to $0.22 on volume of 13.3 million shares;
- Atlas Iron Limited (AGO), -$0.25 (8.5%) to $2.69 on volume of 1.8 million shares;
- Citigold Corporation Limited (CTO), -$0.02 (7.41%) to $0.25 on volume of 360.3 thousand shares;
- Biota Holdings Limited (BTA), -$0.06 (7.28%) to $0.70 on volume of 1.2 million shares; and
- Challenger Diversified Property Group (CDI), -$0.04 (6.9%) to $0.54 on volume of 201.7 thousand shares.
Index Changes
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XAO | All Ordinaries | 5075.9 | 0.5 | 0.01 | 771.7m |
| XFL | ASX 50 | 4910.9 | -16.9 | -0.34 | 273.8m |
| XJO | ASX 200 | 5005.6 | -6.2 | -0.12 | 656.6m |
| XKO | ASX 300 | 5001.1 | -4.4 | -0.09 | 727.3m |
| XMD | ASX Mid-Cap 50 | 4880 | 23.9 | 0.49 | 150.8m |
| XSO | ASX Small Ordinaries | 2882.5 | 34.2 | 1.2 | 302.7m |
| XTL | ASX 20 | 2822.8 | -9.6 | -0.34 | 106.5m |
| XTO | ASX 100 | 4054.1 | -9.3 | -0.23 | 424.6m |
Market Breadth
| ASX20 | XTO | XJO | XAO | XSO | Market | |
|---|---|---|---|---|---|---|
| Advances | 8 | 44 | 95 | 235 | 104 | 541 |
| Declines | 12 | 52 | 94 | 189 | 75 | 510 |
| Advancing Volume | 55.1m | 201.3m | 292.7m | 368m | 138.9m | 634.4 million |
| Declining Volume | 51.5m | 209.4m | 344.7m | 377m | 153.2m | 481.2 million |
GICS Industry Indices
Among the 11 industry indices, it was pretty much even stevens, with a very slight lead to the duds... the 5 that had an "up" day were just shaded by the remaining 6 which didn't.
The best performing index was Materials (XMJ), which added 212.1 points (1.53%) to 14068.5 points. The 42 stocks which make up the index traded a total of 227.75 million units; 26 index components rose, with rising volume amounting to 121.37 million shares, while the 15 decliners had volume traded totalling 105.45 million units. The major percentage gainers within the index were
- Western Areas NL (WSA), +$1.10 (14.1%) to $8.90 on volume of 1.1 million shares;
- Mount Gibson Iron (MGX), +$0.31 (13.25%) to $2.65 on volume of 7.8 million shares;
- Sino Gold Mining Limited (SGX), +$0.72 (13.19%) to $6.18 on volume of 1.5 million shares;
- Great Southern Limited (GTP), +$0.08 (12.21%) to $0.74 on volume of 1.8 million shares; and
- St Barbara Limited (SBM), +$0.02 (6%) to $0.27 on volume of 12.3 million shares.
Second in the index leadership stakes was Energy (XEJ), which gained 194 points (1.12%) to 17458.2 points. The 17 stocks which make up the index traded a total of 37.75 million units; 12 index components rose, with rising volume amounting to 31.95 million shares, while the 4 decliners had volume traded totalling 4.09 million units. The major percentage gainers within the index were
- Arrow Energy Limited (AOE), +$0.17 (5.4%) to $3.32 on volume of 4.7 million shares;
- Paladin Energy Limited (PDN), +$0.28 (5.33%) to $5.53 on volume of 3.5 million shares;
- Energy Resources Of Australia Limited (ERA), +$1.14 (5.01%) to $23.91 on volume of 295 thousand shares;
- Beach Petroleum Limited (BPT), +$0.05 (3.95%) to $1.19 on volume of 5.9 million shares; and
- Centennial Coal Company Limited (CEY), +$0.10 (2.12%) to $4.82 on volume of 3.4 million shares.
The bronze medal for today goes to Telecommunications (XTJ), which climbed 10.5 points (0.7%) to 1504.9 points. The 3 stocks which make up the index traded a total of 35.68 million units; let's just say that you might as well call the index "Telstra et al", since TLS traded 29.9 million shares, while the other 2 stocks in the index had volume traded totalling 5.78 million units.
Going back for a second to the opening remarks - the importance of numeracy: here's just one example of how - with no knowledge whatsoever about Telstra - the numbers tell you it is a big wheel in its index.
The sums go as follows - to get from a 0.92% rise in one component (and only one component rose) to an overall index rise of 0.7%, it requires that the index weight of the rising component is at least 0.7/0.92 (if other index components were unchanged). That indicates that a good guess as to the index weight of Telstra is 'more than three-quarters of the index by market capitalisation'.
Now if you know anything about the Australian market, that's not hugely insightful - but I am prepared to bet that it is more insightful than anything Bernanke's PhD thesis.
- Telstra Corporation Limited. (TLS), +$0.04 (0.92%) to $4.40 on volume of 29.9 million shares.
The worst-performed index for the session was Healthcare (XHJ), which dipped 513.2 points (6.02%) to 8017.1 points. The 8 stocks which make up the index traded a total of 12.45 million units; The 6 decliners had volume traded totalling 9.35 million units, and 2 index components rose, with rising volume amounting to 3.1 million shares, The major percentage decliners within the index were
- CSL Limited (CSL), -$3.45 (9.4%) to $33.25 on volume of 5 million shares;
- Healthscope Limited (HSP), -$0.24 (5.44%) to $4.17 on volume of 873 thousand shares;
- Ansell Limited (ANN), -$0.16 (1.62%) to $9.70 on volume of 235.3 thousand shares;
- Cochlear Limited (COH), -$0.61 (1.32%) to $45.69 on volume of 212.9 thousand shares; and
- ResMed Inc. (RMD), -$0.04 (1.07%) to $3.70 on volume of 2.6 million shares.
Just missing out on the wooden spoon was Financials ex Property Trusts (XXJ), which slid 76.7 points (1.52%) to 4966.7 points. The 30 stocks which make up the index traded a total of 62.57 million units; The 16 decliners had volume traded totalling 48.36 million units, and 10 index components rose, with rising volume amounting to 12.58 million shares, The major percentage decliners within the index were
- Allco Finance Group Limited (AFG), -$0.02 (3.74%) to $0.52 on volume of 4.8 million shares;
- ANZ Banking Group (ANZ), -$0.69 (3.67%) to $18.11 on volume of 9.3 million shares;
- ASX Limited (ASX), -$1 (3.13%) to $30.96 on volume of 884.4 thousand shares;
- Macquarie Group Limited (MQG), -$1.46 (3.04%) to $46.64 on volume of 2.1 million shares; and
- AXA Asia Pacific Holdings Limited (AXA), -$0.12 (2.48%) to $4.71 on volume of 1.7 million shares.
Third-to-last amongst the sector indices was Consumer Discretionary (XDJ), which slid 12.8 points (0.79%) to 1614.2 points. The 25 stocks which make up the index traded a total of 37.29 million units; The 13 decliners had volume traded totalling 22.6 million units, and 10 index components rose, with rising volume amounting to 9.7 million shares, The major percentage decliners within the index were
- Consolidated Media Holdings Limited (CMJ), -$0.17 (5.25%) to $3.07 on volume of 2.5 million shares;
- Macquarie Communications Infrastructure Group (MCG), -$0.15 (4.62%) to $3.10 on volume of 1.1 million shares;
- Pacific Brands Limited (PBG), -$0.07 (3.57%) to $1.89 on volume of 1.7 million shares;
- Tabcorp Holdings Limited (TAH), -$0.28 (3.02%) to $8.98 on volume of 1.8 million shares; and
- Seven Network Limited (SEV), -$0.2 (2.53%) to $7.70 on volume of 407.1 thousand shares.
Sector Indices
| Code | GICS Sector | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| XMJ | Materials | 14068.5 | 212.1 | 1.53 | 228m |
| XEJ | Energy | 17458.2 | 194 | 1.12 | 38m |
| XTJ | Telecommunications | 1504.9 | 10.5 | 0.7 | 36m |
| XUJ | Utilities | 5418.9 | 25.2 | 0.47 | 20m |
| XSJ | Consumer Staples | 7122.1 | 15.8 | 0.22 | 25m |
| XPJ | Property Trusts | 1318.4 | -2.3 | -0.17 | 132m |
| XNJ | Industrials | 4619.9 | -16 | -0.35 | 63m |
| XIJ | Information Technology | 508.5 | -2.3 | -0.45 | 1m |
| XDJ | Consumer Discretionary | 1614.2 | -12.8 | -0.79 | 37m |
| XXJ | Financials ex Property Trusts | 4966.7 | -76.7 | -1.52 | 63m |
| XHJ | Healthcare | 8017.1 | -513.2 | -6.02 | 12m |
All Ordinaries Major Movers
All Ords Volume Leaders
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| SDL | Sundance Resources Limited | 0.30 | -0.02 | -4.76 | 68.9m |
| OXR | Oxiana Limited | 2.08 | 0.08 | 4 | 30.2m |
| TLS | Telstra Corporation Limited. | 4.40 | 0.04 | 0.92 | 29.9m |
| MCC | Macarthur Coal Limited | 15.50 | 0.50 | 3.33 | 23.1m |
| GPT | GPT Group | 1.65 | -0.04 | -2.08 | 22.7m |
All Ords Percentage Gainers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| KCN | Kingsgate Consolidated Limited | 6.00 | 1.31 | 27.93 | 2.2m |
| CFU | Ceramic Fuel Cells Limited | 0.43 | 0.07 | 19.44 | 560.2k |
| WSA | Western Areas NL | 8.90 | 1.10 | 14.1 | 1.1m |
| CIY | City Pacific Limited | 0.28 | 0.04 | 14 | 147.2k |
| BOC | Bougainville Copper Limited | 1.15 | 0.14 | 13.86 | 42.1k |
All Ords Percentage Losers
| Code | Name | Close | +/- | % | Volume |
|---|---|---|---|---|---|
| MDT | Macquarie DDR Trust | 0.22 | -0.04 | -15.69 | 13.3m |
| CSL | CSL Limited | 33.25 | -3.45 | -9.4 | 5m |
| AGO | Atlas Iron Limited | 2.69 | -0.25 | -8.5 | 1.8m |
| VBA | Virgin Blue Holdings Limited | 0.66 | -0.06 | -7.75 | 1.8m |
| CTO | Citigold Corporation Limited | 0.25 | -0.02 | -7.41 | 360.3k |
