A snapshot of today:
What happened today?
ASX 200 closes down 30.6 points after weak leads from overseas and yet another commodity rout. BHP heading down again as oil stocks suffer with Santos placing the rump at 410 cents. Asian markets mixed with China up 0.38% and Japan down 0.15%. US futures +16 points.
- A big fall at the opening after overnight losses in metals and US markets was tempered as some bargain hunting emerged again. The ASX 200 touched 5200 briefly before bouncing off this psychological support as media stocks bounced and banks pared back early losses.
- Selling in resources once again dominated with BHP-2.99%, RIO-2.06% andFortescue Metals (FMG) -2.29% slipping. Gold stocks were also weaker following falls in the bullion price to the lowest level since 2010 Regis Resources ( RRL) -5.63%, Northern Star (NST) -5.2% and Kingsgate Consolidated (KCN)-8.77% were the worse of the bunch in mid-caps with Newcrest (NCM) -0.18% almost holding its ground.
- This is how gold reacts to a rising US interest rate. Not what we expected?
- Energy stocks were not a happy place to be today on the oil price touching $40 ahead of the OPEC meeting this weekend. Woodside (WPL) -4.11%, Oil Search (OSH) -2.78%, Origin Energy (ORG)-1.77% and Worley Parsons (WOR) -6.26% to a nine year low. Santos were back in the spotlight following their return having placed the rights issue shortfall at 410 cents. The stock fell heavily in early trading but did recover well to close nearly unchanged.
- In the industrial space, healthcare flopped with Healthscope (HSO) -4.92%,Greencross (GXL)-6.12% and Ramsay Health (RHC) -2.72% the worst of the bunch.
- Financials were weaker with the big four down around 0.5%-1%. Wealth managers were mixed with BT Investment Management (BTT) +1.72%, HFA Holdings (HFA) +2.79% but Magellan Financial (MFG) -0.78% and Macquarie Group (MQG) +0.11%.
- Consumer stocks eased in line with the market, Woolworths (WOW) -1.29%,Wesfarmers (WES)-0.54%, Myer (MYR) -2.12%, Billabong (BBGDA) -4.38%.
- Media stocks are attracting some attention as Xmas advertisers vie for eyeballs.Seven West Media (SWM) +8.97%, APN News and Media (APN) +6.05% and outdoor billboards group APN Outdoor(APO)+2.03% all doing well. Channel Ten (TEN)-3.23% not so. Seriously.
- Private equity favourites this week Slater and Gordon (SGH) -6.32%, Dick Smith(DSH) -1.5% and Spotless Group (SPO) -2.26% all headed back down after a volatile few days.
- Speculative stock of the day: New IPO today Over the Wire (OTW) +34%. The company is a high growth provider of telecommunications and cloud and IT solutions. Aren’t they all? They raised $10m at 100 cents to have an enterprise value of $50m.
- Santos (STO) -1.48% announced they had successfully placed 152 m retail entitlements at a clearing price of 410 cents. Eligible retail shareholders that did not take up the rights will be entitled to 25 cents being the difference between the clearing price and the rights issue price.
- Nufarm (NUF) -2.83% as the company reported underlying profit will be lower than the previous year. The company has incurred losses of around $10m on hedging the extreme volatility of South American operations, with Brazil the main culprit. The 25% devaluation of the Brazilian real is partly to blame.
- Oops. The long awaited Roy Hill iron project has been left with egg on its face following Gina Rinehart’s’ Churchillian effort yesterday with ‘the light of history shall shine on all your hard hats and the first Roy Hill ship’. It appears that ‘progressive commissioning’ and ‘operational and safety issues’ have caused the delay of the first shipment. It now appears that the first shipment will be rescheduled until next week.
- Australia’s trade balance has stayed in the red with a deficit of $3.3 billion in October, following a deficit in September of $2.4 billion. Analysts had expected a deficit of $2.6 billion in October. Exports fell 3 % in the month, while imports were flat, the Australian Bureau of Statistics said.
- In other data, new home sales have slipped again, falling 3 % in October, following a 4 % drop in September.
- Weekly rents have risen in capital cities by around 0.3% for the lowest annual growth rate on record. Sydney and Melbourne were the only increases of around 2%
- Sales of new vehicles rose 6.9 % in November compared with the same period a year ago, a third month of strong gains that looks set to make 2015 a record.
- The Australian Federal Chamber of Automotive Industries’ VFACTS report shows total sales were 98,639 in November, compared with 92,232 for the same month last year. Both months had the same number of selling days. Sales were up 4.6 % from October, reaching the highest ever November figure. The running total for 2015 so far rose to 1.06 million, 3.9 % ahead of the same period last year.
- China’s current account surplus as a proportion of gross domestic product is forecast to swell to 2.7 % this year, from 2.1 % last year, and hold at 2.5 % in 2016 and 2017, according to economists surveyed by Bloomberg. The goods trade surplus relative to a more stagnant global economy is back near pre-crisis levels.
Ahead in Europe and the US
- A big day for the ECB as Super Mario takes the stage to announce yet more stimulus. Or so the market expects. It has a number of options including negative interest rates, higher monthly spending than the current EUR60bn or it could extend it beyond September 2016.
- There are rumours that the Saudi’s are proposing a deal to stabilise global oil markets. According to some sources they are proposing cuts to OPEC output of 1m barrels a day if Iran and Iraq participate and non –OPEC countries join the cuts. Bless.
- FTSE -27.50 points.
- DAX -75.50 points.
- CAC -8.50 points.
- And finally Goldman Sachs has run the numbers on the IPO market since the second half of 2013. 56 companies have come to the market with a market cap of $100m or more and 80% have outperformed. Just the ones floated by private equity that haven’t.
- Last year, vendors raised a record $17.1 billion from 70 IPOs, according to Thomson Reuters, up from $6.7bn in 2013.
- This year there have been 59 deals that have raised $7.1bn, with the biggest being Link Administration, MYOB and Costa Group.