It was another choppy week for the All Ordinaries, which managed to eke out a miniscule gain of 0.3%, finishing down by 50 points on Friday from the record high posted the day before.
Rio Tinto (ASX: RIO) continued to tread water above AUD$90 as speculation about a possible takeover receded (was it ever really a serious proposition?), but did close lower for the week at AUD$90.91, for a drop of 1.2%. Still, that's peanuts considering it has risen by 22.4% since the start of the year compared to an 11% rise for the All Ordinaries.
Fellow miner BHP Billiton (ASX: BHP) had a similarly flat week, but has also had an impressive record since the start of the year, rising by 21.4% to only just underperform its rival.
The other share price that has caught the market's attention over the last week or so has been Macquarie (ASX: MBL). Especially following the upgrade in profits. Macquarie was one of the few stocks that advanced on Friday, which is probably not surprising given the strong momentum the bank had during the week. As of last Friday's close, Macbank had gained by 9.2% for the week, giving it a resource-sector-style gain of 23% since the beginning of the year.
Over on Wall Street, the US market continues to defy its detractors. Is it a case of the market keeping its head in the sand and fiddling while Rome burns? Or are things truly not as bad as many think? Whatever the answer, the Dow Jones Industrial Average continues to pile on the pounds, rising by another 1.7% to close the week within 3.3% of reaching the 14,000 point mark.
Not bad considering it only breached the 13,000 point level one month ago. Are the good times back? Or is this another signal that the market is starting to become top-heavy?
Speaking of the good times, it looks as though they continue to roll with unblemished views for residents of California following the decision by Governator Schwarzenegger to veto a plan by BHP Billiton to build a liquefied natural gas (LNG) terminal off the coast of Malibu in Los Angeles.
Apparently, residents were concerned that the LNG terminal would result in excessive emissions of carbon dioxide (much more than the petrol guzzling limousines and four-wheel drives of course), and would be a potential terrorist target!
Oh, and of course a much lesser concern was that it could create an eyesore to residents. Not for the average punter though, seeing as the LNG terminal would be several kilometres offshore. However, it may have caused local Malibu residents like Pierce Brosnan, Tom Hanks and Cindy Crawford some emotional distress when taking their yachts out for a cruise.
Seeing as their main concern was the CO2 emissions and the potential for the terminal to be a terrorist target, we are sure that they would have no problem if the Governator decided to locate a bunch of windmills in the Hollywood hills. Surely petrol guzzling, green-when-it-suits-them stars could have no objection to that.
We wonder if they would be prepared to show the same concern for residents on the coast of the Gulf of Mexico that enjoy vistas of several thousand offshore oil and gas rigs? No, we thought not.
Kris Sayce
The Daily Reckoning Australia
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About the Author
Kris Sayce began his financial career in the City of London as a broker specializing in small cap stocks listed on London's Alternative Investment Market (AIM). At one of Australia's leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.
