Catch up time today after two days of the Dow. 350 points of US losses has translated into a relative flesh would of 65 points in our market. Having opened up down 80 points odd it rallied to be only 20 down before nerves and vertigo set in. Tonight will prove an interesting one after 5 nights of lower US stocks and disappointing numbers from Apple to boot. Of course the big four financials did most of the damage with the banks contributing 15 points of the decline whilst BHP Billiton Limited (A$36.31, -2.0%) accounted for 9 and RIO Tinto Limited (A$64.31, -1.3%) 1.4 points. Other big losers were Wesfarmers Limited (A$42.39, -1.3%),Woolworths Limited (A$33.52, -1.4%),Crown Resorts Limited (A$16.73, -2.8%),Twenty-First Century Fox, Inc. (A$34.62, -2.3%),Csl Limited (A$70.04, -1.2%) and Fortescue Metals Group Ltd (A$5.15, -1.5%). In the sectors insurance hit a bump led by AMP Limited (A$4.25, -1.8%),Insurance Australia Group Limited (A$5.50, -1.8%) and QBE Insurance Group Limited (A$11.37, -2.9%) whilst Macquarie Group Limited (A$54.35, -2.7%) which did so well last week got whacked and closed down nearly 2.8%.Big resources obviously took things badly despite the Iron Ore [price staying pretty stable. A rising AUD didn’t help matters either after the Business confidence survey showed that a lower dollar was doing the trick. BHP Billiton Limited (A$36.31, -2.0%) clobbered as were RIO Tinto Limited (A$64.31, -1.3%) and Fortescue Metals Group Ltd (A$5.15, -1.5%) and we also saw some weakness in building stocks with Boral Limited (A$4.70, -0.4%),Fletcher Building Limited (A$8.26, -1.8%),James Hardie Industries PLC (A$12.91, -2.0%)Duluxgroup Limited (A$5.29, -1.7%) and Adelaide Brighton Limited (A$3.62, -1.6%) weak.
In the much hated gold sector things were bad then they recovered somewhat with Newcrest Mining Limited (A$9.54, +0.6%) even up at the death. But tiddlers fell in a drilling hole and couldn’t really get out of the mud. Kingsgate Consolidated Limited (A$1.13, -5.0%),Silver Lake Resources Limited (A$0.615, -0.8%),Papillon Resources Limited (A$1.215, -3.2%)Perseus Mining Limited (A$0.385, -7.2%),Resolute Mining Limited (A$0.54, -6.1%) and Oceanagold Corporation (A$1.995, -5.0%) all looked washed up today.
Tech stocks also felt the Wrath of Khan with Carsales.Com Limited (A$8.81, -2.4%),Computershare Limited (A$11.10, -1.4%),Reckon Limited (A$2.12, -1.4%) and Wotif.com Holdings Limited (A$2.40, +0.8%) whilst Telstra Corporation Limited (A$5.12, -0.6%) managed to avoid the worst of the rout. Mining services shouldn’t have got out of bed again. Boart Longyear Limited (A$0.455, -6.2%),Bradken Limited (A$4.95, -2.2%),Austin Engineering Limited (A$3.33, -3.8%),Cardno Limited (A$6.29, -2.8%) and Monadelphous Group Limited (A$16.40, -2.3%) felt a bit of the wrath too!
In the enclosure today were JB Hi-Fi Limited (A$19.19, +4.9%), after a trading update helping other retailers like Myer Holdings Limited (A$2.56, +2.4%) and Dick Smith Holdings Limited (A$2.21, +1.8%), with Downer EDI Limited (A$4.97, +2.5%),Hutchison Telecommunications (Australia) Limited (A$0.086, +2.4%),Arrium Limited (A$1.56, +3.3%),Iluka Resources Limited (A$8.85, +2.3%),#WAM#,Fonterra Shareholders’ Fund (A$5.75, +3.0%),Oil Search Limited (A$8.26, +1.5%) and Energy Resources of Australia Limited (A$1.255, +0.8%) ,doing a fine Justin Bieber impersonation were Lynas Corporation Limited (A$0.30, -6.3%),Oceanagold Corporation (A$1.995, -5.0%), Freelancer, Whitehaven Coal Limited (A$1.80, -3.7%),Ten Network Holdings Limited (A$0.335, -4.3%),Panaust Limited (A$1.64, -4.4%),#BRU and Macquarie Atlas Roads Group (A$2.71, -3.9%). Volumes were higher than recent holiday trading with around $5 bn traded. Currencies are where the big players are smashing each other at the moment and we saw a relatively quiet day in the Aussie around 87.85 with Bitcons hanging in despite some arrests in the US, just a smidge above $1100.
Asian markets swung between gains and losses with little movement as we went to press. Seems they are waiting for the words of wisdom from the latest FOMC meeting later this week. Ben exits stage left pursued by a bear!
Stocks and Stories
Time for another downgrade from a corporate as Treasury Wine Estates Limited (A$4.55, unch) went into a trading halt today. Probably about to announce lower everything and plunge 10%!
In house stocks, AWE Limited (A$1.275, -2.3%) sold 11.25% of the BassGas for $85m,Regeneus Ltd (A$0.46, -4.2%) slipped a little, #RLE# held steady and #IMC# had a good day continuing to bounce around near the rights issue price.
JB Hi-Fi Limited (A$19.19, +4.9%) decided to clear the air today after a couple of naff retail updates from Super Cheaper and The Rejected shop. As one of the most heavily shorted stocks it was time to punish the bears with good sales numbers and a good forward guidance for more to come. At one stage the stock had soared to over 10% gain before some sanity prevailed(did you spot the allusion to another retain electronics chain). JB Hi-Fi’s net profit rose 10 per cent to $90.3 million in the six months ended December 31, compared with $82.1 million in the year-earlier period. The result was slightly ahead of market consensus forecasts of about $90.25 million.
My Kitchen Rules easily beat The Block last night which won’t make #NEC# bosses very happy, as ratings season gets back into the swing. Ten Network Holdings Limited (A$0.335, -4.3%) has neither of these but yet another series of The Biggest Loser! What is really scary is that 1.7million people watched this drivel. Is this the best thing to do on a Bank Holiday night!!Really? Cheese recipes?
Oil Search Limited (A$8.26, +1.5%) reported quarterly numbers today and was one of the few stocks that showed a green flash.
Mcpherson’S Limited (A$1.37, -10.7%) profit warning. AJ Lucas Group Limited (A$1.17, +3.5%) rallied after their CEO resigned
Looks like one of the early 2014 winners #PBT# has bolted again today after already doubling in the last few weeks. I think they are working on a new Alzheimer drug but I forget how they are going or where I put the car!
To give you an idea of the overseas movements, #IEU# which is a US Dollar denominated proxy for big Zombie companies had a bit of a shocker today!!!
Here’s a scary thought. SMSF borrowings have gone from $0.5Bn in 2008 to a much more $6.3 Bn.And you wonder why houses are so expensive in our capital cities like Sydney and Melbourne.
Another reason why the RBA will not cut again. In the NAB survey business conditions have soared to a 2½-year high as sales and profits in some industries are rising sharply amid low interest rates, higher share and house prices and a weaker exchange rate.Shame we are not seeing it in the company updates! More downdates than updates at the moment.
Tomorrows News Today
Well one punter in the US thinks that the current volatility will end or at least abate as he has sold a massive amount of VIX calls for February. $18m in call options as they hope that the VIX wont bust above 22.Last week we saw a huge rally in volatility from 12’s to 17’s.The trade included the sale of 250,000 February 22 calls for about 70 cents each
Global smartphone shipments topped 1 billion units for first time in 2013, climbing 38.4 percent from the previous year to 1.004 billion units, research firm IDC said.
Turkey in emergency meetings.UK growth expected to show a clean pair of heels. French unemployment at a new record (although Hollande is trying to keep lawyers busy) and Apple get smashed down 9% after their figures in after-hours trade. Chinese New Year to come!
RBS about to announce another huge loss. RBS has incurred more than £40bn of losses since its 2008 bailout – almost as much as the £45bn taxpayers pumped in to rescue it. And still the management get huge bonuses. Even the Wolf of Wall Street would blush. “Was all this legal? Absolutely not!” The Wolf.
That is all