By MoneyMorning.com.au
1: No one wants German bonds
Today on the Australian market stocks were down again this morning. Why? Germany was flogging nearly 6 billion euros of 10 year bonds… and the ‘take up’ was just over half at 3.64 billion.
‘This is nothing short of a disaster for Germany,’ said managing director of Southwest Securities Inc, Mark Grant. ‘If the strongest nation in Europe has this kind of difficultly raising capital, one shudders concerning the upcoming auction in other European nations.’
The failure to buy the nicknamed ‘gold standard’ German bonds is telling you something. No one has any faith in the market.
2: Dollar dives in Australia… China’s economy to blame for not working hard enough.
If you were planning on doing your Christmas shopping from American retailers this year, you may want to put those plans on hold.
The Aussie dollar was trading at US 96.83 cents this morning. So who’s to blame? The poor German bond sales and China’s preliminary manufacturing data.
But it could be worse. The PMI figure was just HSBC Bank’s estimate of the PMI. It estimates the figure will plummet to 48, the lowest in over two years when the official figure is released next Thursday.
Any number below 50 suggests manufacturing activity is slowing. If HSBC data is on the money, it could be ‘bye bye’ to a controlled soft landing from Chinese central bankers… and ‘hello’ to a ‘crash landing’ instead.
3: Supermodels know more than your stock broker…
We know the market’s in turmoil. Picking trades and planning your investments isn’t easy.
But perhaps you should do what the supermodels do.
If that sounds crazy, check out this chart.
If you’d invested in the publicly listed company’s supermodel, Gisele Bündchen has been involved with… your stock portfolio would have outperformed the Dow Jones.
Since 2007 the ‘Gisele Index’ is up more than 47% compared to the Dow Jones Industrial Index. Companies she has endorsed in the past four years include, Volkswagon [PK: VLKAY], Polo Ralph Lauren Corp [NYSE: RL], Vivo Participacoes [NYSE:VIV], Newscorp [NASDOQ:NWSA], Procter & Gamble [NYSE:PG] and Disney [NYSE:DIS].
But if you’re going to use models as a basis for stock choices, pick ‘em carefully. Miranda Kerr, another model, is an ambassador for David Jones [ASX:DJS].
This morning it’s down 4%. And DJ’s has a lost a massive 49% since its peak 2007…
Shae Smith
Editor, Money Morning
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