And they are off!!We’re racing! A killer combo of better than expected BHP Billiton Limited (A$38.98, +1.2%) production numbers ,stronger overseas markets, a benign CPI,Commonwealth Bank of Australia (A$81.56, +0.4%) lowering its five year loan rate and some chart busting buying, meant we put in a very strong day, well at least for a while!. Up close to 5600 at one stage ,the market eased back into the afternoon with concern about US GDP and IMF GDP downgrades taking some enthusiasm away. In the final countdown we closed up 33 points at 5576 closing above the resistance level at 5570.Thunderbirds are go(maybe?). It’s all resources baby! The market dynamics have changed dramatically with value now being found in the resource stocks as corporates are prepared to pay more than shareholders for stocks.
The big ones are firing, Woodside Petroleum Limited (A$42.37, +1.2%), Alumina Limited (A$1.56, +4.3%),RIO Tinto Limited (A$64.53, +0.6%),Fortescue Metals Group Ltd (A$4.62, +0.2%) well a little bit anyway with good gains in Lynas Corporation Limited (A$0.20, +17.6%) (I believed),Liquefied Natural Gas Limited (A$2.87, +3.6%),Sims Metal Management Limited (A$10.85, +5.8%)(new strategy),Sundance Energy Australia Limited (A$1.34, +4.3%), and gold stocks like #GOR#,Newcrest Mining Limited (A$11.49, +0.5%) and Evolution Mining Limited (A$0.83, unch). Financials as usual were taking it in turns to run, Westpac Banking Corporation (A$34.09, +0.4%) being todays’ laggard. Second tier banks and insurers also did well with Macquarie Group Limited (A$61.27, +1.0%),ASX Limited (A$36.60, +1.0%),Challenger Limited (A$7.98, +2.0%) and Insurance Australia Group Limited (A$6.04, +0.7%) having a ball.
Other industrials were mildly better following the mean adjusted, trimmed, weighted and seasonally adjusted inflation number that bears absolutely no reality to the real rise in the cost of living but hey, let’s not worry about that too much. Staples Woolworths Limited (A$35.94, +0.7%) and Wesfarmers Limited (A$43.65, +0.6%) felt better with small gains in discretionary stocks like JB Hi-Fi Limited (A$19.24, +1.1%),Myer Holdings Limited (A$2.28, +0.9%) and Crown Resorts Limited (A$15.66, +1.2%) to the fore. Telcos were also better as the NBN seems such a distant memory of what could have been and Vodafone continues to lose as many customers as it does signals in the CBD.
Running around doing Hi-fives were Magellan Financial Group Limited (A$12.02, +7.0%),Sims Metal Management Limited (A$10.85, +5.8%),#VED#,Syrah Resources Limited (A$5.70, +4.4%),APN News & Media Limited (A$0.76, +4.8%) and Arrium Limited (A$0.81, +4.5%) in the bigs whilst small caps Starpharma Holdings Limited (A$0.85, +16.4%),Lynas Corporation Limited (A$0.20, +17.6%) and #AMI# were the standouts. Losers ,well who cares. Volume finally got to nearly $4bn, but still all things considered not great.
Punters specials today were running hot too. Boart Longyear Limited (A$0.21, +75.0%) (once a blue chip) #ROG#,#THR#,Summit Resources Limited (A$0.32, +45.5%) and #IBG# stealing first base.
The Aussie dollar enjoyed a solid bounce following the CPI numbers to 93.360,Gold $1306 and tulips $657.Asian markets were mixed Tokyo unchanged HK up 0.76% and China up 0.39%.
Stocks and Stories
BHP Billiton Limited (A$38.98, +1.2%) shot the lights out with its production report, delivering a much stronger than expected 225 million tonnes in 2014 with expectations this will increase again by almost 9 per cent in 2015.It remains a cost out ,squeeze the assets story with no word what CEO McKenzie is going to do with the B grade assets like Nickel or any capital management issues.
Computershare Limited (A$12.84, +1.7%) has agreed to buy a UK business in mortgage administration for 47m quid. It’s called Homeloan Management. Needs approval but should be a rubber stamp.
Starpharma Holdings Limited (A$0.85, +16.4%) marching higher following news a few days ago of approval of ‘Bieber’ Gel in condoms.
Affinity Education Group Limited (A$1.24, +6.0%) also shone as they digested the productivity commission report of childcare. Up 27% in three years since the government got involved. Also news of the DD being completed on some recent purchase helping as they now account for 104 child care centres.
#XRO# has told shareholders that it is targeting an 80 per cent lift in full year revenue from the $NZ70 million booked last financial year. Hoping to go for a NASDAQ listing in the near future.
Vodafone Australia lost 137,000 mobile subscribers in the six months ending June 30, 2014 to reach 5.2 million. Telstra Corporation Limited (A$5.45, +0.4%) has 15.8 million mobile subscribers compared to the 9.43 million at SingTel Optus.
Consumer prices rose by 0.5 per cent in the June quarter, broadly in line with market expectations. The quarterly growth, compared with 0.6 per cent in the preceding six months, equates to an annual rate of 3 per cent.
Once upon a time. Sims Metal Management Limited (A$10.85, +5.8%) has announced a new strategic five-year plan to lift EBIT by 350 per cent above FY13’s underlying result, through cost cutting and the sale of non-profitable businesses. And they all lived happily ever after.
Aurizon Holdings Limited (A$5.05, +0.6%) reported that coal output over the June quarter was 52.1m tonnes, which represents 1 per cent decline year-on-year, the company said in statement.
The final FY14 coal output of 210.4m tons is within previously advised guidance range of between 207m and 212m tonnes.
Tomorrow’s News Today
Oops, looks like Microsoft dialled the wrong number as it reported a 7% fall in profit during the second quarter. The company said profit during the March to June period was $4.6bn (£2.7bn), compared with $4.97bn during the same period last year. Microsoft said its Nokia division, which it acquired in April, lost $692m.
1 in 25 New Yorkers is a millionaire!
There’s a new kid on the block. Indonesia has finally confirmed a new Joko in the pack and he is promising to really expand the economy. Talking 7%.Would be good for the region if he can achieve that .
Seems the iPad is passe as Apple now relying more and more on the sale of iPhones. They sold 35.2m units, up 13% on the same period last year, to fuel growth. Revenues came in at $37.4bn for the June quarter, within the company’s range, and Apple said revenues would be between $37bn and $40bn in the September quarter. However the one fly in the ointment is iPad s which dropped 9%! iPeakPad is here. Seems there are a few new products coming too.
“It’s all a circus kid ,a three ring circus”. Britain borrowed £11.386bn to balance the nation’s books in June – more than expected, and more than a year ago. Analysts had predicted a deficit of £10.665bn. In June 2013, the UK borrowed £7.594bn That’s not a great sign for the state of the UK’s finances, showing little progress in bringing the deficit down.lucky house prices are going through the roof.
US GDP Friday and word from the IMF will be a focus.
US traders’ love affair with all things Germanic is waning as they have pulled almost $817 million in the past six weeks from a U.S. exchange-traded fund holding German companies, while investing $270 million in an ETF of broader European equities, according to media reports.
The Russian Index is at a two month low. Probably won’t last as pressure on Putin is building.US now not pointing all their fingers his way.
Nobody but a few care about this, but the Baltic Dry Index has collapsed to an 18-Month low, the worst July since 1986
That is all