A snapshot of today:
What happened today?
The ASX 200 closes up 20.3 points to 5276.4 in a solid start to the week. Banks feature again with WOW and Big W also in the spotlight. BHP continues to wobble and gold stocks resume their falls. AUD falls back to 71.81c. Asian markets mildly positive, Japan closed. US futures up 10.
A tentative start today given the weakness overseas from BHP -2.1%. Banks were the key again and eventually found their mojo, pushing ahead with National Bank (NAB) +0.87% andCommonwealth Bank (CBA) +0.71% the best of the bunch. Volume was relatively strong at over $5bn and following last week’s 4% rise, it was good to kick the week off on a positive note as Mondays recently have seen big falls. It was only a week ago that we saw the French terrorist attacks and the market tested 4982 before bouncing hard in a straight line.
- Financials were mildly positive, QBE +0.31%, Macquarie Group (MQG) +0.11% after a $400m note issue, Blue Sky Limited (BLA) +0.14% and HFA Holdings (HFA) +5.63%. REITS were once again firm led by Westfield Corp (WFD) +1.53% andScentre Group (SCG) +0.24%.
- Perennial short target Slater & Gordon (SGH) -19.78% had another shocker today after the AGM Friday triggered broker downgrades and aggressive selling again.
- Healthcare stocks were buoyed by yet another mega pharma merger with Pfizer and Allergan set to announce a US$280bn deal. CSL +0.86%, Nanosonics (NAN) +5.98%, ResMed (RMD) +1.24%, Ramsay Healthcare (RHC) +0.88% and Cochlear(COH) +1.09%.
- Telecoms were mixed – TPG Telecom (TPM) +0.97%, Spark New Zealand (SPK) -1.65%, Telstra(TLS) +0.92% and Speedcast (SDA) +3.3%.
- Consumer stocks were firm with Myer (MYR) +3.88%, Surfstitch (SRF) +6.09%,Specialty Fashion (SFH) +8.4% and Beacon Lighting (BLX) +1.88%.
- In resource stocks, BHP -2.1%, RIO -0.99% and South32 (S32) -5.06% were once again in the dog house on falling iron ore and other commodity prices but strangelyFortescue Mining (FMG) +4.31% bucked the trend. Mid-caps like Sandfire (SFR) -0.88%, Western Areas (WSA) -4.22% Metals Ex (MLX) -3.33% and Independence Group (IGO) -1.09% all suffering as commodities continue to fall. Zinc gave back some of Friday’s gains, falling 1.2% with copper down 1.6%.
- Energy shares were mixed as sellers continue to punish Santos (STO)-3.38% and the rights down 44.83% as trading ends today with the underlying stock looking to be headed towards the issue price. Oil Search (OSH) +1.59% picked up but US hopefulLiquefied Natural Gas (LNG) -11.15%. Woodside (WPL) was unchanged but uranium producer Paladin (PDN) -8.33% was once again sold off.
- Speculative stock of the day: Animoca Brands (AB1) +33.33% after an operational and revenue update last week. Revenue increased 88% to $7.5m and total downloads of its apps at 163m up 44%. The company is a leading mobile online games developer. It has also recently linked up with Mattel to develop and licence ‘Ever After High Tea Party Dash’.
- Dog of the Day was former high flyer Oncard International (ONC) -41.18% after the company appears to have been gazumped on its forthcoming deal to enter the dairy market through a Tasmanian acquisition. Looks like lawyers will be rubbing their hands with anticipation.
- The Veda (VED) +2.23% board has unanimously backed the bid from US Equifax at 282.5c by way of a scheme of arrangement.
- Woolworths (WOW) +3.88% produced a solid performance as media articles suggested that private equity buyers may be circling to take out Big W. No comment from the company but not doubt there are sharks circling.
- Newcrest (NCM) -2.21% after its mill failure at the Cadia mine in NSW. Guidance remained unchanged despite the failure and it’s now back to ‘full capacity’. Although NCM said the mill is not in perfect condition, the rewiring required is not urgent and can be conducted on the next outage.
- News Corp (NWS) +1.45% as it announced 55 jobs cuts in the newspaper division.
- Moody’s has suggested that home loan delinquency rates are at 14 year highs. Households with two income earners spent an average 29.3% of their monthly income on mortgage repayments in October, up from 28.2% at the same time last year. In Sydney, where house prices have surged over the last year, households spent an average of nearly 40% on monthly mortgage repayments, up from 36% a year ago.
PERCENTAGE OF MONTHLY INCOME SPENT ON MORTGAGE REPAYMENTS
- Sydney: 39.2%, up from 36.1%
- Melbourne: 32.1%, up from 29.1%
- Brisbane: 23.3%, down from 24.1%
- Adelaide: 21.7%, up from 21.2%
- Perth: 21%, down from 23.9%
An interesting graph today from Macquarie Group shows the falls in asset prices this year, with equity indices and some soft commodities the only winners, at least in USD terms anyway.
In Asia – A holiday in Japan today for Labor Thanksgiving day. US Thanksgiving is Thursday.
- The yuan has dropped to a three-month low as the central bank weakened the currency’s reference rate amid a US dollar advance and on concerns China will allow a decline to help its economy. The yuan is down 0.07% to 6.3894 a US dollar, after earlier falling to 6.3955, the lowest since August 28. In Hong Kong’s offshore market, the currency slipped as much as 0.21% to a two-month low of 6.4352.
- In China, margin requirements will be raised to 100% from 50% starting on November 23. The rule change means that investors with 1 million yuan ($156,895) in their accounts are limited to borrowing another 1 million yuan from a broker to buy more shares. Previously, they could borrow as much as 2 million yuan.
- Bank of Jinzhou, a lender in north-eastern China, along with an existing shareholder, are seeking as much as $943 million from a Hong Kong initial public offering. Bank of Jinzhou, based in Liaoning province, and the investor are offering 1.32 billion shares at HK$4.64 to HK$5.54 apiece, according to terms for the deal.
Ahead in European Markets
- As we approach the OPEC meeting, Saudi Arabia has two options to restore its balance sheet. Either cut production and get the oil price back up or unpeg and devalue the riyal from the USD. For the last 30 years the riyal has been pegged at 1 riyal to 3.75 USD. Expectations rose to their highest level since 2008, reflecting a rate of 3.7962 or about a 1.2% devaluation.
- Oil production continues to rise as prices fall and devaluation risks rise too
- FTSE -28 points.
- DAX +37 points.
- CAC -2 points.
And finally, twenty years ago today the world changed forever. ‘Woody’ and ‘Buzz Light year’ entered our world in ‘Toy Story’. ‘To infinity and beyond’. And coming soon ‘Toy Story 4.’
ASX 200 Index Today Aussie Dollar Today US71.81
- Volume was $5.33bn Daily (average $4.3bn)
- Dow Jones Futures up 10 points.
- Dow Jones was up 91 points overnight.
VOLUMES AND VALUE
Small stocks trading big volumes today