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A snapshot of today:
What happened today?
ASX 200 closes up 32.7points at 5230 as resources continue to outperform. Westpac still in trading halt. Strong bounce after jobs number disappoints and currency jumps. China pushes higher up 1.4% with Dow futures also pointing up 98 points.
A positive start to the day, as once again resources took the lead, continued as resources rallied into the close breaking the three day losing streak. We have a small blip down mid-morning after the jobs numbers were slightly worse than expected, but they are volatile numbers and can jump around. The headline rate was once again 6.2% as the full-time number fell, and the part-time number rose. The AUD spiked on the numbers but came back off but still up on yesterday’s trading. Volume was again on the low side as lack of conviction and nerves still apparent.
- Banks were once again left out of the rally a little. ANZ –0.31% slipped on Asian worries, Commonwealth Bank (CBA) +1.13% was the stand out with Westpac still in a trading halt as they bed down the placement of the entitlement issue. Credit Suisse has suggested that if all the banks followed the lead in raising rates they would make another $1.25bn in combined profits. Not bad for a regulatory cost passed on to mortgage holders.
- In industrials, Domino Pizza (DMP) +9.64% was a big winner following its French Pizza chain purchase yesterday. Brokers seem to be updating their target prices to above 5000c as growth outlook.
- Telecommunication stocks were all better at the expense of Telstra (TLS) -0.91% who is starting to look like an ageing gunfighter that everyone wants to take a shot at. Chorus(CNU) +4.05% and Macquarie Telecom(MAQ) +3.72%.
- Healthcare stocks continue to go nowhere as risk is once again back in fashion. Even the buyback in CSL -0.29% was not enough to lift spirits in the sector.
- Baby Bunting (BBN) +3.83% had another good day after its perfect birth yesterday.
- In resources, energy stocks were in demand as Woodside were rumoured to be looking to up their bid for Oil Search (OSH) +3.78% and Santos(STO) +3.09% joined in on speculation they may even turn their attention to them.
- Big miners were better as BHP +1.78% has tapped the US hybrid market for $3.25bn and the European markets for EUR2bn and the UK for GBP600m. RIO +2.3%,South32(S32) +1.35%
- Gold stocks were once again the stars of the day led by Newcrest (NCM) +5.36%,Evolution Mining (EVN) +7.38% and Northern Star (NST) +3.96%.The gold sector is now up a massive 50% since the beginning of the year.
- Speculative star of the day was Maximus Resources (MXR) +100% before going into a trading halt. According to the company they need more time to evaluate the recent drilling results after identifying significant new gold anomalies
- Freelancer (FLN) +12.03% Another record quarter with cash receipts up 42% of $9.7m. They now have 16.8m users and 8.6m projected posted. Not bad for a company valued at $800m
- ERA -20.78% after an update on the Ranger authority expansion. The company had been seeking stakeholder support for the project, however, the Traditional Owners have advised they will not support the project, and the company will be looking at options including whether the assets are now impaired.
- Insurance Group Australia (IAG) +6.3% has abandoned plans for an expansion into Asia. IAG has scrapped plans to expand in Asia. After securing a strong capital injection from its deal with Berkshire Hathaway in June, investors and analysts have been speculating IAG could splurge up to $1 billion for a joint venture in China.
- Woodside (WPL) +1% reported a 45% drop in third-quarter revenue and narrowed its full-year production forecast on weak oil and gas prices Woodside’s revenue for the September quarter fell to $US1.09 billion from $US1.96 billion a year ago, with sales volumes down 1.6 %. It changed its forecast for full-year production to between 88 million and 93 million barrels of oil equivalent from 86 to 94 mmboe. That is down from record output of 95.5 mmboe last year.
- Fortescue Mining (FMG) +6.02% results today. Volumes were broadly in line, but pricing was secured at around 8% more than the market was expecting coupled with lower cash costs. The debt was also addressed as they paid down US$600m of its net debt position after cash generation.
- Lend Lease (LLC) +5.83% on their strategy day today. For the first time, the company was happy to address their exposure to the Chinese market. They said that less than 20% of their residential sales were directly related to China. In a worst case scenario, a 3.8% EBITDA hit as a result of an across the board default.
- CSL -0.29% announced another $1bn share buyback after only recently finishing their $950m buyback from last year. This is the ninth buyback in the last ten years. They also reaffirmed their forecasts for next year with trading in line with previous estimates.
- Asciano (AIO) -7.62% fell heavily today after the ACCC released a “statement of issues” on the proposed deal with Canadian infrastructure company Brookfield,, and invited further submissions by November 4th. It expects to make a final decision on December 1.
- Coffeys (COF) +116% has recommended a takeover offer at 42.5 cents by Tetra Tech a NASDQ listed company.
- The unemployment rate remained at 6.2%, the economy shed 5100 jobs instead of creating nearly 10,000 new ones as had been expected. The participation rate slipped slightly to 64.9 %, from 65% in August. That of course if you believe the figures as one former ABS official has said that the way the ABS measured the number is seriously flawed.
Part-time jobs continue to gain while full-time jobs fall. The proportion of workers with part-time jobs continued to rise in September, reaching a record 31%.
- Monthly new motor vehicles sales have hit 100,000 for the first time since the Australian Bureau of Statistics began issuing the data in 1994.The number of new motor vehicles sold rose 5.5 % in September and are up 7.7 % over the 12 months to September.
- Once again Asia rallied on a weaker USD following disappointing retail sales numbers last night. The rate rise seems to be receding into the background as a long US dollar liquidation continues. China was up 1.6%. Japan up 1.33% and Hong Kong up 1.83%
- Global bond yields fell to a five-month low Wednesday as weaker-than-estimated retail sales data from the U.S. added to a string of reports showing deterioration in major economies from Japan and China to the U.K. and Germany.
Ahead in Europe and US.
- Germany has said that the immigrant crisis is similar to a mini stimulus package as government spending will increase as a result.
- Plans out today from the UK government on how to make big banks ring fence their retail operations from the riskier businesses.
European markets preview
- FTSE up 29 to 6299
- DAX up 61 to 9976
- CAC up 33 to 4642