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1. European solvency and liquidity concerns & poor economic results in the US led US markets to trades significantly lower from the open and European equity markets finish down in the vicinity of 3-4%.

2. From the start of the trading day it was the first time I had seen AUD buying and ASX selling, signals to us that foreign investment capital playing less a role in equity market decisions, our dollar being driven more so by money market investment and demand for our exports. In reality the Aussie dollar bounced around all day.

3. Electrical utilities the biggest outperformers for today. Given the relative assurance of demand for energy over time in the sector the idea to invest in an AGL or Spark is substantial, despite small margins and large debt laden infrastructure burdens. Energy prices also expected to hold over time. APA +1.12% PIH +0.93% SKI SPN +0.66%

4. ABS Job vacancies fell -2.8% from Feb to May-10, however since May trading conditions have slipped somewhat. A more important employment release today was the Department of Employment job vacancies index for skilled workers -0.3% in June, signalling there is still a skilled worker shortage not being fundamentally challenged by our economy which will lead to capacity constraints.

5. RBA financial aggregates saw total credit rise +2.7% over May-10. Financial intermediaries credit grew +0.2% MoM April to May-10. Housing credit grew +0.1% MoM from April to May-10 YoY +8.6% to May. Personal credit fell -0.5% in May from +0.2% in April. M3 rose 0.9%, broad money +0.7% MoM or +3.25% YoY overall signs of better credit conditions for the greater economy.

6. Housing Industry Australia economist Harley Dale commented today on new home sales -6% in May. He stated successive interest rate increases, persistent cost pressure from on-going supply side constraints, which need to be addressed, all contributing to the fall in sales activity. Multi-unit housing sector fell the most dramatically -11.6%, whilst NSW and SA the best performing states. The argument for investment in the NSW property sector continues to be strengthened with the state government spending money within the sector to promote better support comparatively. Stocks with good NSW residential property exposure include SGP, ALZ, sector otherwise REITs ABP. It should be noted that other unique investments within these businesses may drag on stock prices. A list of NTA > $100M; PE < 10 stocks in the NSW residential sector follow: FKP -2.16%; LEP -0.48%; SDG.

7. The first spate of job cutting at Coffey COF as the company “right-sizes” into operating conditions for the coming financial year. Coffey affirms guidance excluding potential goodwill impairments. Issues with employment are never good considering the circular nature of the economy as such the sign from Coffey is not that positive for the general market. COF +6.67%

8. Ausenco today announce a $6.8M impairment for the half year accounts given a review of its energy business. This is not to be confused with the speculation of poor cash flow management at Downer EDI yesterday. Downer’s difficulty in managing liquidity conditions are far more of a concern that those for Ausenco. Ausenco has had a revision to a goodwill asset which was addressed at its AGM. Downer Chief today Geoff Knox today confirmed that their remaining stake 49% in MB Century Drilling would be sold for a pre-tax gain of $5M ($88M cash inflow). Liquidity management a central issue for Downer at the moment with overhang of the Reliance Rail project. Really to see full value in the stock you may need to hear some better results coming from that Rail investment. There is definitely value there, prices may get better over the short term to get in, but unlocking that value is crucial and it just is not the current time for that to happen with Downer. Unless there is some drastic occurrence in the next quarter. AAX -7.69% DOW -3.74%

9. Tower HY NZFY results +28.8% Gross profit, interim dividend NZ4c/share (81.1% of cash from operating, investing and issued caital), significant increase in policy liabilities NZ$8.1M vs. -NZ$49M HY09. Difficult operating conditions for an already complex industry (insurance) better value elsewhere. TWR -3%

10. Leading into tonight economic releases and developments in negative social externalities of economic slowing, especially with respect to European nations will be of key focus.

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