A snapshot of today:

 

What happened today?

ASX 200 closes on its lows, down 36.1 points at 5166.5 after a slow start. Banks try to hold the line but once again resources the drag. Slater & Gordon and Dick Smith in the limelight. Asia markets slip a little with China down 2.87% and US futures down 28.

After a quiet start, the market turned bearish around 11.30am and hit the lows of 5166.5 for the day, before a small rally which fell away in the match out. Volume remained muted until the close. Oil Search (OSH) +0.61% experienced a massive volume spike at the close ($1bn) and may well be a corporate play. Prior to the match out, there was a lack of conviction pre the RBA meeting tomorrow. The ECB meeting later this week also took its toll. Banks held up better than most with Westpac Banking (WBC) +0.09% and Australia and New Zealand Bank (ANZ)-0.69% the outperformers.

  • Gold stocks were hit hard as bullion hit a six-year low. Evolution Mining (EVN)-10.76%, Northern Star (NST) -4.71%, St Barbara (SBM) 11.35% and Newcrest (NCM) -3.88% all hit hard.
  • Big miners were once again unloved with BHP -3.62%, Fortescue Metals (FMG) -4.85%, Iluka Resources (ILU) -4.49%, South32 (S32) -2.86% and RIO -0.69%. Second liners like Independence Group (IGO) -6.56% and Sandfire Resources (SFR) -3.66% all weaker.
  • Energy stocks eased as crude fell overnight. Santos (STO) -0.5% is approaching the issue price at 385c. Oil Search (OSH) +0.61%.
  • In industrials, airlines eased but airports held up – Sydney Airport (SYD) +0.76% and Auckland International (AIA) unchanged, Qantas (QAN) -3.7% and Virgin Holdings (VAH) -4.4% .
  • Financials were mixed. Wealth managers traded positively with Henderson Group (HGG) +0.64%,Perpetual Limited (PPT) +0.81%, IOOF Holdings (IFL) +0.53% and Magellan Financial (MFG) +0.86%. REITS were  mixed with GPT -1.28% and Vicinity (VCX) +1.45% and Westfield Corp(WFD) unchanged.
  • Woolworths (WOW) -0.38% and Wesfarmers (WES) -0.6% both closed weaker, with intra-day gains evaporating as they took heart from the Metcash (MTS) +12.12% update. Select Harvest (SHV) -5.64% continued to fall as did Coca Cola Amatil (CCL) -2.9% and Asaleo Care (AHY) -2.63%.
  • Speculative stock of the day: Intueri Education Group (IQE) +41.54% after reaffirming its quality student strategy with strong margins and good cash flows. It also completed the acquisition of the New Zealand Institute of Sport. The rather unfortunately named NZIS.
  • Dog of the day: Dick Smith (DSH) -57.58% for reasons below.

Corporate News

  • BHP -3.62% – Today released an update on the Samarco tragedy. The waste has been tested and seems not to be hazardous to humans although they are monitoring the fish deaths due to asphyxiation. The company has also been informed of a $7bn lawsuit from the government.
  • Metcash (MTS) +12.12% – Underlying net profit fell 6.1% to $86.9 million in the six months ending October as investments into reducing grocery prices and refurbishing stores crunched margins in the food and grocery business, wiping out gains in liquor and hardware distribution. Food and grocery sales stabilised in the first half, rising 0.7 % to $4.54bn, and same-store sales in IGA stores rose 0.6%. The underlying net profit result exceeded consensus forecasts around $78 million and compared with $92.5 million in 1H15.
  • Dick Smith (DSH) -57.58% today updated the market with a $60m write down on stock and backed away from its recent guidance coupled with comments from the company that things are still very much ‘below expectations’. The private equity buyers have done a great job selling the stock to the public two years ago for $520 having bought it for $115m. The business is now worth around $68m.
  • Slater and Gordon (SGH) +34.06% moved to restore some confidence by once again reaffirming its 2016 guidance. For the second time it said that revenue would be around $1.15bn and EBITDAW would be $205m.
  • Bellamy’s (BAL) +6.94% following news of a tie up with Fonterra to manufacture baby nutritional powders over the next five years. The new deal will see the plant at Darnum Victoria move to be ‘organic’ certified.
  • ALS Limited (ALQ) -17.94% returned from suspension following the capital raising at 335c. The stock was ex-entitlement and it announced the completion of the institutional component of the $325m entitlement issue.
  • Telstra (TLS) -0.74% has ratcheted up its overseas data fee just in time for Xmas. Travellers to the US and the UK will now pay $450 for a monthly pass rather than the $300 previously. Data costs have also risen form 3c a MB to 10c MB. Looks like it will have a lot of unhappy ex customers.

Economic News

  • The value of outstanding loans to property investors rose 9.7% in the year to October, which was the slowest annual expansion since September last year. Overall housing credit growth was unchanged at 7.5% a year as increased lending to owner-occupiers helped make up for the softening in the housing investor market.
  • A 289m Capesize ore carrier has arrived off the coast to load the first cargo from Gina Rinehart’s Roy Hill mine. Iron ore has sunk below $40 in Sinapore with the SGXAsiaClear contract for January down 3.1% to $39.50 a ton.
  • The ABS said gross operating profits rose 1.3% from the June quarter, above the 1.1% gain forecast by economists.
  • A separate RBA report showed business lending rose in October for the second straight month by more than 1%, the first such increase since just before the collapse of Lehman’s in September 2008.
  • Credit to businesses – which was up 1% from September, when it grew 1.1% takes the annual gain to 6.6%.

In Asia

  • Japan -0.66% and China -1.58% as brokerage businesses slump again. Haitong Securities fell nearly 10%
  • Japan’s industrial output rose for a second straight month in October and retail sales grew much faster than expected – a tentative sign of the economy’s recovery from a recession.
  • Trade ministry data on Monday showed factory output rose 1.4% month-on-month in October, versus economists’ estimate for a 1.9% gain and 1.1 % increase in September, led by general-purpose machinery, cars and electronics.
  • Separate data showed retail sales rose 1.8% in the year to October, more than a 0.8% annual gain expected, on sales of clothes, food and drink, cars and home appliances.
  • Looks like China’s yuan will join the Special Drawing Rights currency. Interestingly the PBoC has fixed the yuan weaker for the last 20 days the weakest since August 28th.

Ahead in European Markets and the US

Back from Thanksgiving – In the US Thursday we saw a new online sales record for the holiday: $1.73 billion, up 25% year-on-year, according to data from Adobe. Smartphones represented 22% of all transactions this year. The average Thanksgiving Day shopper spent $162 per order, up 5% from last year’s holiday.

  • FTSE -15 points.
  • DAX  -21 points.
  • CAC -16 points.

Clarence

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NT Markets

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