So will our market take a breather today after eight nasty days of selling and gloom which has seen the ASX 200 lose almost 200 points?
Is today the day investors decide that our market represents value, and start dipping back in ahead of what many still think will be a rebound in the economy and earnings in 2015?
Well, quite a few bears still think 2015 will see more of the same – Goldman Sachs for one.
Others think that earnings will start rebounding as 2015 progresses – certainly that’s the thinking from a string of companies large and small which have cut their first half earnings guidance during the current annual meeting season, but maintained their full year outlooks.
Other, more realistic groups reckon 2014-15 will be a rough 12 months and see little chance of a strong rebound.
And you only have to look at the way the falling price of iron ore (aided by the slide in oil prices since mid year) have crushed the local market this month especially.
In fact the falling iron ore price took away 2014 from local investors yesterday, leaving the market 36 points down from where it started the year.
But a 1.1% rise, to around $US70.97 a tonne overnight Thursday should ease some of the enormous pressure on the sector on the ASX.
That pressure saw the local market blitzed by a late selling wave yesterday,
The market had opened weaker after spot iron ore prices fell to US70.20 (or $US70.000 depending on the source) a five year low, and continued to drift until a burst of late selling saw it lose 1% in value.
As a result, the ASX 200 lost nearly 53 points to 53162.2, and the All Ords lost 0.9%, or 50 points, to end at 5302.5.
The losses were led by the materials sector, which slumped 2.3% large falls in the big miners, while financials slipped 0.4%.
BHP fell 2.6% to $31.80 and Rio Tinto lost 2.7% to $56.41, as both hit 2014 lows, as did Arrium which dropped another 5.7% to 24.5 cents, Mt Gibson ended flat on 40 cents, BC Iron dropped 4.3% to 55 cents.
Atlas Iron actually gained 4.9% to 21.5 cents, and Gindalbie dropped 4% to 2.4 cents. No one could explain the rise for Atlas.
Big retailer, Woolies, lost another 3% yesterday to take its losses this month to more 13%.
It is now 20% under its all time high hit in May.
Worries about growing losses in the Masters hardware chain are said to be worrying big investors.
Figures released this week in the US by Lowes,the second biggest US hardware chain and Woolies partner in the joint venture, which owns Masters, Home Timber & Hardware and Thrifty-link stores, suggest widening losses in the business.
Lowes comments suggest that losses widened to around $57 million in the three months ending October, up from a loss of $38.8 million in the previous quarter and a loss of $48.6 million in the first quarter of 2014.
Australian analysts now think losses in Woolies hardware businesses could top $180 million, up from the surprise $169 million loss in 2013-14.
The value of the Aussie dollar was driven under 86 US cents at least twice yesterday afternoon on the weak iron ore price and a six month for one of the two monthly surveys of the health of China’s manufacturing sector.
But the dollar rose back over 86 cents in offshore trading and was around 86.30 in early Asian dealings this morning.
The banks were mixed. The Commonwealth lost 0.25% to $80.34, The National Australia Bank shed 0.09% to $32.10, ANZ rose 0.5% to $31.94 and Westpac fell 0.8% to $32.53.
Our market could start with a small gain this morning, but that’s no real guide after similar performances earlier in the week were overtaken by selling during the day here.
November is turning out to be a rotten month for Australia, while markets in Germany, Japan (understandable given the huge stimulus) trade higher.
Watch for what shareholders in the ANZ, NAB and Westpac are told at forthcoming annual meetings. Bank shares are holding up the market, if they start delivering gloomy views on revenue and earnings, then we could see further losses.
