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A snapshot of today:
What happened today?
ASX200 up a massive 105.9 points at 5221 as bull-run continues as we break through 5200. Japan now up 1300 points in two days as China positive too, up 1.65%.US futures up 185 points.
Not sure what was said at the G20 meeting last week but whatever was decided behind closed doors has certainly done the trick for the time being. Global markets are back in full bull mode.
- Another massive rise today across the board on good volume as bargain hunters and shorts raced to cover quality names. The banks which have been under a huge cloud now for some weeks were like a coiled spring and over the last two days they have unwound. The yield has proven to be irresistible and with two months until they go ex div there is a push ahead for these ones. The big four were up over 3% accounting for nearly half of the rise today. It seems that the pricing period for the ANZ SPP and the CBA rights was holding things back. Other financials also starred with big names dominating. Macquarie Group (MQG) +3.77%, AMP +3.15%, QBE +3.24% andSuncorp (SUN) +3.38% all doing very well. Maurice Blackburn today launched a $200m class action against QBE for misleading shareholders.
- Resource stocks were positive with BHP –0.2%, one of the few going backwards, as the stock went ex-dividend. RIO +2.57%, South32 (S32) +3.05% and Fortescue Mining (FMG) +4.08% all showing good gains as did the energy sector. Santos (STO) +5.9% and Origin (ORG) + 2.98% the standouts but Oil Search (OSH) -0.63% went backwards after rejecting Woodside’s advances (WPL) +0.81%. Whitehaven (WHC) +7.92% and Paladin (PDN) +12.82% rebounded today on renewed risk appetite and a hope of more stimulus measures in China. The WPL/OSH proposed deal helping sentiment.
Woodside has joined the fray with their $12bn bid for Oil Search.
- Industrials also stage a very positive day, Telstra (TLS) +1.94% and other Telcos in focus. Having completed the recent takeover of iiNet, TPG (TPM) +5.18% is looking like a great cost out opportunity and brokers are warming to the story.
- Some of the darlings were in demand in the food and supplement sector, Bellamy’s(BAL) +7.8% continues to be a stand out as are Blackmores (BKL) +5.52% andCapilano Honey (CZZ) +11.9%.New tech shares 1PG (1PG) +10.89%, Audio Pixels(AKP) +6.99% and Future Fibre Technology (FFT) +6.67 % all shone today.
- In corporate news, Quicksilver in the US will be put into bankruptcy protection asBillabong (BBG) +4.42% regained losses on hopes that 38% majority shareholder Oaktree Capital will move to take control in a restructuring and refinancing of Quicksilver. Hopes for some kind of tie up seem to be high.
- In economic news, consumer confidence continue to plunge lower in September. Westpac today that the index dropped 5.6 per cent in September, from 99.5 points in August to 93.9 this time.
- Last month, with more than US$300bn worth of deals announced, was the busiest August in US history, as M&A activity hit US$1.46tn year-to-date in 2015, surpassing overall transaction volumes in 2014.The announcement of big deals in Asia-Pacific on Tuesday also pushed our region’s deal making total past US$700bn for only the second time on record.
- Across Asia we saw similar positive moods develop. Japan has put on around 1300 points in two days as valuations crashed to 11 month lows. Today we saw a 7.7 % move higher as the rally extends its best run since 2008.
Looks like words from PM Abe on corporate tax cuts were just what the doctor ordered. Valuations also appear to have become too cheap in Japan with the Nikkei trading at around 14 times earnings, the lowest since October.
China today was up another 1.65% as the 3000 level seems to be the government’s key level.
- Meanwhile in China it seems that the authorities have well and truly killed the futures market with volumes plunging. They are now down 99% from their June highs. Liquidity has dried up as margin requirements and position limits have all but killed the exchange.
And the heads up for early calls for European markets:
- FTSE 6227 up 80
- DAX 10450 up 179
- CAC 4672 up 74
This is the dilemma facing Janet next week. Good jobs growth but inflation well and truly dead. Good luck.
It has been 6 years of near zero interest rates so we are in for a new environment at some stage.
And finally the new iPhone is about to be unveiled. Much excitement for the Apple disciplines. What could this amazing device possibly do? To put this in perspective, the iPhone brought in $102bn in sales for Apple last year. That is more than the combined revenue of Twitter, Facebook and Google!