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A snapshot of today:

 

What happened today?

ASX 200 closed down 46.8 points at 5232.9 with energy shares and banks the big drag. Low volume as the market consolidated after big rises last week. China positive as is the oil and gold price. Dow futures up 4. BOJ expects to see no additional stimulus.

After a subdued start the market continued to fall as profit taking in energy shares and banks hurt the market. Volume was low as US markets are partly closed on Monday despite good gains from Asia. Across the board selling with major stocks sold-off kept us in negative territory for the day.

As the USD has fallen away, so world markets have rallied. The US payrolls number has been the catalyst for this change as we head into another Fed meeting at the end of the month.

Since September 29, when the ASX fell 4% to a two year low, the Materials sub-index has soared 14.2%, while Energy has risen 17.7%.

The only sector in the green today was the Gold sector which continues to power on as higher bullion prices continue.

  • Energy sector down around 2.4%, Origin Energy (ORG)-3.54%, Woodside (WPL) -1.81% and Santos (STO) -0.67% holding on to most of the gains from last week while Oil Search (OSH)finished -4.18% after the articles in the media this weekend.
  • Big miners BHP -0.94% and RIO -0.67%, although Fortescue Metals Group (FMG) +5.26% and the stock is up 24% last week. A huge jump too for Independence Group (IGO) +9.17% on both gold and better base metal prices and the wrap up of the Sirius Resources takeover. Zinc producers also did well today as LME prices rose substantially.
  • Gold stocks were in demand Evolution Mining (EVN) +11.52%, Regis Resources (RRL) + 8.11% and Perseus (PRU) +10.67% all putting in very strong results.

  • Banks fell around 1% with the exception of Australia and New Zealand Bank (ANZ) -0.39%. Analysts are talking the sector down with payout ratios falling to 50% according to some. Insurers and other wealth managers were easier led by Macquarie Group (MQG) -0.21%, IAG -1.17% and AMP -1.03%.
  • In Industrials, ‘Clean and Green’ stocks had a bad day today. A few weeks ago this sector was the stand out of the year on the demand from China for premium quality products story. It lifted Blackmores (BKL) -6.35% to over $157. Today the reversal also dragged Bellamy’s Australia (BAL) -6.67% in its wake as profit taking brought the sector comes under pressure. Select Harvest (SHV) -3.75%, Webster (WBA)-2.8% and Graincorp (GNC) -0.76% all lost ground.
  • Other healthcare stocks also slid away, led by CSL -2.5% and Ramsay Healthcare (RHC)-1.81%.
  • The higher AUD is taking its toll on sentiment in the USD earners like Amcor (AMC) -1.88% Brambles (BXB) -1.47%, QBE Group (QBE)-0.76% and James Hardie (JHX)-0.63%

Corporate News

  • Glencore put its Hong Kong shares into a trading halt today pending an announcement on asset sales. It is looking like Australian and Chilean assets are being sold with agricultural assets in the spotlight.
  • Transurban (TCL) -0.51% as toll revenue increased by 17.0% to $427 million when compared to the prior corresponding period (pop). Proportional toll revenue, which Transurban believes is the most accurate reflection of the portfolio’s performance, increased by 18.9% from the PCP, to $446 million.TCL highlights included:
    • In Sydney:For the September quarter 2015, Average daily traffic (ADT) increased 10.3% to 622,000 trips. Revenue on the M7 increased by 24.3% in the September quarter compared to the pcp. This was in part due to the increase in the truck toll multiplier to 1.67 times the car toll in the September quarter. The multiplier will reach 3 times the car toll on 1 January 2017
    • In Melbourne:For the September quarter 2015, Melbourne toll revenue increased 6.7% to $153 million. ADT increased 2.4% to 833,000 transactions
  • Evolution Mining (EVN) +11.52% announced it partner Emmerson Gold (ERM) +22.86% had made a high grade gold discovery in Mauretania. Results from the three drill program showed 30m at 3.22g/t Au, 13.1g/t Ag, 0.33 % Cu. Some talk too on a production upgrade later this week.
  • Veritas Securities has underwritten Skydive the Beach’s (SKB) $19.6 million rights issue and opened the books on the institutional portion of the company’s raising. Skydive is seeking to raise $19.6m at 30c a share, which was a 4.8% discount to its last close. The deal was structured as a two-for-nine non-renounceable entitlement offer.
  • Santos (STO) -0.67% has announced a cut of 200 people from its South Australian operations.

Economic News

  • Personal finance borrowing fell 2.5% while commercial financing fell 4.4% and leasing was down 33%.
  • Big speech from Deputy RBA governor Lowe tomorrow.

In Asia – China had another positive day up around 3.9%.

Looking at consumer data rather than manufacturing data is interesting.

 

Golden Week has been a huge week for consumption.

  • Sales at restaurants and retailers were over 1 trillion yuan, more than the entire economic output of Kuwait in 2014.
  • 639m trips on the road, according to the Ministry of Transport. 4m Chinese travelled overseas whilst 11.5m visited Beijing.
  • China will release export and consumer price data on Tuesday and Wednesday, respectively. Overseas shipments probably dropped 6% last month from a year earlier.
  • Car Inc.’s stock jumped after announcing it was looking to sell used cars. The stock was up as much as 11% in Hong Kong and traded 9.8% higher for the biggest gain in more than four months. The company will start with sales in eight cities and expand to about 100 smaller municipalities next year by acquiring existing dealerships. It will initially sell cars that are part of its rental fleet and subsequently offer pre-owned vehicles from other providers as well as new cars.
  • China continues to import more oil to boost its strategic stockpiles during times of weaker prices. Tankers carrying crude are piling up at ports around China and up to 19 have been waiting for over two weeks. These ships are called VLCC (very large crude carriers) and can carry around 2m barrels of oil.

Booming tanker market in China as it continues to import oil for strategic stockpiles

  • The country has amassed 200 million barrels of crude in reserves as oil prices slump, and aims to have 500 million barrels by the end of the decade, according to the International Energy Agency in Paris. In the first seven months of the year, China purchased about half a million barrels of crude in excess of its daily needs, the most for the period since 2012, according to data.
  • Japan closed for a holiday today.

Ahead in Europe and US

  • FTSE at 6400 down 17
  • DAX at 10129 up 33
  • CAC at 4705 up 4

Columbus Day holiday in the USA (Equities open, bond markets closed) and Canada closed for Thanksgiving.

  • Looks like Dell is on the brink of unveiling the biggest tech deal ever, as it looks to buy data storage provider, EMC, for USD53bn. The deal would eclipse the pending US$37 billion Broadcom-Avago merger, currently the biggest tech tie-up.

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