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A snapshot of today:

 

What happened today?

The ASX 200 rose 22 points to finish at 5215, strengthening into the weekend to give a loss of 27 points for the week. Financials and resources remain unloved as industrials shine. Asian markets positive with Japan up 0.65% and China 1.4%. US futures down 4.

The market really could not make up its mind today in a volatile session, as a mid-morning fall to 5152 prompted buyers back in following the release of RBA Statement on Monetary Policy.Tonight we get the all-important US non-farm payrolls report (180,000 expected) and Sunday brings trade data from China (just to prove how hard they work with weekend releases). AGM season continues and industrials offering growth are being rewarded in spades. Disappoint and you are toast.

  • The finance sector was slightly better despite ANZ -2.5% going ex-dividend. It has been a tough week for the banks and we did see some bargain hunting around.Westpac (WBC)+1.7% was the best of the bunch with Commonwealth Bank (CBA) +0.91% not far behind. Wealth managers firmed slightly with Macquarie Group(MQG)+0.29%, Platinum Asset Management (PTM) +0.81% and BT Investment(BTT) +1.24%. Challenger Limited (CGF) +0.73% was the standout today.
  • Resources were led down by BHP -2.49% as news of a tragedy in Brazil did not help an already negative lead. Both RIO +1.3% and Fortescue Mining (FMG) +4.69% was a beneficiary of potential iron ore disruptions and gold stocks rallied a little after a very negative week, Silver Lake(SLR) +4.76%, Resolute Mining (RSG) +5.71% andNewcrest (NCM) +0.5%.
  • Energy stocks were generally lower with Woodside (WPL) -2.12%, Santos (STO) -1.66% and WorleyParsons (WOR) -5.61% being hit hard following legal action by shareholders on compensation claims.
  • In Industrials it was once again a case of stock picking. Star performer was Credit Corp (CCP)+11.55% after the profit upgrade at its AGM yesterday. A 20% rise in two days is a very impressive performance. Following in its wake was Collection House(CLH)+11.76%
  • Other industrials standouts were Xero (XRO) +5.07%, Beacon Lighting (BLX) +0.54%, Ardent Leisure (AAD) +3.63% after big falls yesterday.
  • Building materials were in demand following the CSR +2.91% and Boral (BLD) +2.75% updates this week. Adelaide Brighton (ABC) +2.38% and James Hardie(JHX) +1.75% also in favour.
  • Healthcare stocks rose with Healthscope (HSO) +2.61% and Ramsay Healthcare(RHC) +3.36% leading the charge. The sector has been somewhat in the doldrums this year as the market has embraced more risk and avoided some regulatory uncertainty in the sector.
  • Qantas (QAN) -1.07% completed its capital return and share consolidation today, with the stock slipping slightly.
  • The speculative winner today was Rawson Resources (RAW) +22.5% after its AGM presentation. One of the biggest losers was recently listed and star performer Vitaco(VIT) -5.4% as it took a breather.

Corporate news:

  • BHP -2.49%. A horror day today, although a good bounce off the intra day low of 2202c, after tragic news that an iron ore tailings dam burst in Brazil with many deaths reported. BHP owns the project, Samarco, 50% with Vale.
  • Things just got real at Asciano (AIO) +8.09%. Things have taken another turn as Canada’s Brookfield has gone hostile and now has 19.99% of AIO, having bought 14.99% last night at 880c and putting its bid to shareholders. Looks like this one will run for some time longer, with the scheme vote now postponed by AIO. Brookfield still has to get the deal past the regulator and get shareholder approval so there are plenty of twists and turns to come.
  • NIB Holdings (NHF) +2.96% announced an agreement with leading NZ Brand, The Warehouse Group, to offer health and travel insurance.
  • News Corp (NWS) -1.75% as the digital space takes the lead. First quarter revenue was $2.01bn, a 4% decline over the pcp. Strong growth in Realestate.com.au.
  • Rumours emerging in the media that Telstra (TLS) -0.19% is looking to get out of its Foxtel shareholding. Think they may have missed the boat a little as Netflix etc continues to take market share off them. This week they lost the EPL to Optus and despite protestations that the EPL is a niche market, it is none the less a sign. And not a good one.

Economic News

  • The RBA released its statement on monetary policy. It reiterated its outlook from the recent board meeting saying prospects for improved economic performance had ‘firmed a little’. Forecasts for inflation and growth were lowered slightly which seems counter-intuitive given the commentary about outlook and rate cuts.
  • Still expecting 3% growth in 2016. No rate cuts here.

In Asia

  • Passenger-vehicle sales in China increased at the fastest pace in seven monthsafter the government cut a tax on car purchases to boost sagging demand. Retail deliveries of cars, SUVs and multipurpose vehicles rose 11.3% to 1.85 million units last month. Retail sales through October rose 6.4% to 16.2 million units.
  • This weekend we get the Chinese and Taiwanese heads in a historic meeting in Singapore as they agree to go ‘dutch’ in the dinner bill and not do the famous wallet fumble. This is the first meeting for nearly 70 years, so things may be a little frosty at first.
  • Standard and Chartered fell 7% in Hong Kong after a downgrade from Fitch Credit Ratings, as the bank moved this week to raise US$5.1bn and cut thousands of jobs.
  • It has been an almost ‘Thatcher 80s like’ run in Japan this week with government company Japan Post and its newly listed subsidiaries soaring before a profit taking today.

European and US Market Preview

  • US NFP tonight-A strong number will firm up rate rise for December.

Ahead in European Markets

  • FTSE – +16
  • DAX – +53
  • CAC – +31.5

And finally a thought for the week with a nice graph showing we have much work to do to be true creators of wealth, harnessing technology and innovation.

Have a great weekend

Clarence

XXX

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