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A snapshot of today:

 

What happened today?

ASX 200 closes up 14.9 at 5133.1 after a good turnaround led by banks. Resources again weak with BHP at seven year lows. Asian markets mildly positive with Dow Futures down 16.

After a weak start on the back of commodity price falls with the ASX200 hitting a low of 5082, the markets staged a very positive turnaround with Commonwealth Banks leading us higher. This is a good result considering the market had every excuse to sell off again after the big rise yesterday.

  • Once again banks were in demand following the CBA AGM yesterday. The big four were up around 1% with REITS also doing well. Vicinity Centres (VCX) +1.1%,Dexus (DXS) +1.74% and Lend Lease (LLC) +1.21% all doing better than the pack.
  • Industrials were also firm. Gaming stocks were better with Crown Resorts (CWN) +1.99%, Star Entertainment Group, the casino formerly known as Echo Entertainment (EGP) +1.43% and Tabcorp (TAH) +1.11% all doing well. Crown bucked lower Macau estimates for gambling revenue too.
  • Healthcare was a mixed up world with Sonic Healthcare(SHL)-3.22% especially weak ahead of its AGM tomorrow. Mesoblast (MSB) -4.41% continued lower, after their less than optimal US listing this week. Healthscope (HSO) +0.71% and Fischer and Paykel (FPH) -1.76% were both weak while CSL+0.27% and Japara Healthcare(JHC) +5.02%.
  • AGM news continues to dominate and McPherson’s (MCP) +21.21% were back in favour following an update from the MD and a positive outlook for the second half of FY16.
  • Utilities were also sought after with AusNet Services (AST) +3.68% strong after the AGM yesterday. Spark Infrastructure (SPK) +0.34% also performed well as did AGL Energy (AGL) +1.2%.
  • Resources were another story altogether. BHP -2.75% remained under pressure ahead of the expected fiery AGM tomorrow in Perth. RIO -2.7% joined in the fun as did South32 (S32) -3.50 which has plunged to years’ low. Fortescue Metals (FMG) -3.15%, Sandfire Resources (SFR)-4.18% and Independence Group (IGO) -2.62% all falling away again.
  • Gold stocks were in the dog house led by Northern Star (NST) -7.87% as the gold sector performance continues to unravel. Newcrest (NCM) -4.15%, Oceana Gold(OGC) -5.28%, Saracen Minerals (SAR) -6.9% and St Barbara (SBM) -4.23%. Once again the gold price has failed to respond to global black swan events on terrorism and increased Middle East conflict. Seems the old rules no longer apply and that is frustrating the Bulls as central banks just keep on printing.

  • Despite falls in for the oil price, our energy sector held up reasonably well. Santos(STO) +1.61%, STO Rights +16%, Woodside (WPL) +0.37% and Origin Energy(ORG) +0.95% all firmer while LNG-3.95% and Paladin Energy (PDN) -7.69%, on the periphery, were significantly easier.
  • Speculative stock of the day: New float Pwr Holdings (PWH) +93.33% a company specialising in cooling systems for high performance motorsport applications.
  • Biggest loser of the day: Lovisa Holdings (LOV) -7.76%

Corporate News

  • BHP -2.75% has been issued a civil lawsuit for $3.69bn as compensation for environmental damages. Not quite sure how they arrive at that, rather than just an ambit claims for, cue Dr Evil, 10 billion reais.
  • Orica(ORI) +2.31% results today showed earnings lower at $417m than analysts expectation at $433m. After taking a $1.69bn write down and saying the current year had been challenging. They have suspended their share buy-back. The CEO did foresee some improvement in earnings before interest and tax in fiscal 2016 before further improvement in the 2017 financial year.
  • A non-listed company but one that is closely watched is David Jones. Now in the hands of South African Woolworths, the company rubbed salt in Myers’ wounds today with news that sales had jumped 12.2% in the fist 20 weeks of the new year. This was the best growth in 15 years so once again we see retail is not all bad.
  • Netcomm (NTC) +25% which makes modem for the’ internet of things’ had a stunning reaction to the AGM today. The stock has been a huge winner this year and continues to go from strength to strength.
  • The stock everyone loves to hate Cabcharge (CAB) +6.23% is fighting back against Uber and GoCatch and todays AGM was well received. Cabcharge says it’s looking beyond the taxi industry in the face of pressure from ride-sharing services, with chief executive Andrew Skelton pointing out the $1.9 million in 2014/15 revenue from services including payment services and coding to Westpac and Woolworths. Profit of $46.5m dropping 16.6%.

Economic News

  • Wage growth remains at a record low, at 0.6 % over the September quarter and 2.3 % over the 12 months. The ABS’s wage price index also showed that private sector wages grew even more slowly: by 0.5 % for the three months and 2.1 % year-on-year.

In Asia

  • Chinese home prices have finally stabilised after more than a year of price declines, according to China’s National Bureau of Statistics. According to calculations by Reuters, new home prices in 70 large cities were up by an average 0.1 % year-on-year, improving from a 0.9 % decline in September, a 2.3 % decline in August and a 3.7 % decline in July. Month-to-month prices rose 0.2 % on average, a sixth straight gain.
  • More bad news from China on the outlook for iron ore. Crude steel production in China will collapse by 23 million metric tons next year, according to the nation’s leading industry group. That’s equivalent to more than a quarter of annual output from the U.S. Supply from the top producer may drop 2.9 percent to about 783 million tons from 806 million tons in 2015, according to the China Iron & Steel Association.
  • Chinese unemployment is always a tricky one to measure or believe. The official gauge is always steady at between 3.9% and 4.3% and has been for the last 13 years. The current reading is 4.05% in the third quarter but this index does exclude 200m migrant workers who are the first to be sacked in an y downturn. The monthly survey based number is believed to be more accurate and came in at 5.2% in September.

Ahead in European Markets

  • FTSE : -10 points.
  • DAX : +271 points.
  • CAC : 132.50 points.

 

Clarence

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NT Markets

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