A snapshot of today:
What happened today?
ASX 200 grinds 7.7 points higher to 5116.7 after a strong start evaporates. Blame BHP, Blame RIO, Blame it on the Boogie. Asian markets weaker with Japan down 0.06% and China slipping 0.45%. US futures up 27 points.
Every day it is getting quieter and quieter as traders shut up shop for Christmas. Only $3.2bn today. Strong leads from the US gave us an adrenaline shot this morning helping us hit a high of 5159, but much like a short black after a hangover, the effects were short lived and the market came crashing back to earth with a thud. Financials were the main culprit of the sogginess but falls in BHP -1.75% once again weighed on sentiment.
- Energy stocks continue to see some position squaring before the break and rallied again despite the sinking oil price. Woodside (WPL) +0.59%, Caltex (CTX) +2.33%, Oil Search (OSH) +0.82% and Santos (STO) +3.06% putting in good gains.
- In other resources Independence Group (IGO) +4.31%, Lynas (LYC) +17.33% and Iluka (ILU) +2.77% all fared well but iron ore stocks were again out of favour, RIO -1.52%, Fortescue Mining (FMG) -1.69% and BHP -1.75%.
- Banks eased with Westpac (WBC) -0.78% faring the worst. The sector has been a serial underperformer this year. National Bank is -13% for the year, Australia and New Zealand -17%, Westpac -3.3% and Commonwealth Bank -4.4%. Notice anything about these relative performances. The banks that stayed at home and stuck to their knitting performed best. Asian strategy and UK woes killed the performance of ANZ and NAB. The rudimentary banking index of the big four added together, was 183 on New Year’s Eve 2014 and now stands around 168 or down around 9.8%. Taking into account the fully franked dividends you haven’t done so badly after all. Especially given the performance of other blue chips like BHP -36%, RIO -26% and WPL -28%. Aren’t you glad you avoided resources?
- Insurers were stronger IAG +0.38%, QBE +1.09%, Clearview Wealth (CVW) +5.26% and AMP +1.08% all doing well.
- In the industrials healthcare stocks staged a slight comeback with Sonic Healthcare (SHL) +0.91% and Ramsay Healthcare (RHC) +0.98% leading the way. Clean and Green continued to shine with Bellamy’s (BAL) +4.22%, Huon Aquaculture (HUO) +4.79% and Tassal Group (TGR) +2.16%.
- Boring utilities got back on track today with Sydney Airport (SYD) +1.92%, Transurban (TCL) +0.87%, Qantas (QAN) +0.78% and Aurizon (AZJ) +1.86% all firmer.
- Speculative stocks of the Day: eCargo (ECG) +223.8% following selection by Woolworths for its digital content launch. Look at those eCargo.
- Woolworths (WOW) -0.00% – Is aiming to tap billions of dollars in Chinese consumer spending and insatiable demand for Australian food and grocery products by setting up shop on China’s largest online business-to-consumer market, Alibaba’s Tmall Global. While we are on Woolworths ,former OrotonGroup CEO Sally MacDonald has been appointed to run Big W. Much the same business really. Look out for more Ralph Lauren in the store.
- Finally, an oil company, Origin Energy (ORG) -1.79%, has decided to hedge its production against further falls in the crude price. The hedging involves ‘put’ options and reduces the risk with minimal costs. Finally. Shame no one thought of it when oil was $100.
- Royal Wolf (RWH) -35.14% as one of its major customers Titan Energy went into administration. This will have a material impact on the numbers and the stock responded accordingly. EBITDA is reduced to the $36-39m range and NPAT of $7.5-9.5m.
- Asciano (AIO) +0.92% had some news from the ACCC this morning that it would consult with industry on the Brookfield bid and would be reporting back in February. Qube (QUB) rallied +1.73% on the news.
- Ramsay Healthcare (RHC) +0.98% announced it had acquired a French hospital group based in Lille called HPM Group for EUR169m. Payment would be cash in hand, draw down of debt facilities and assumption of the French group’s external debt position.
- Not much happening on the economic front this close to Christmas.
- The government has given approval for the revised expansion plans for the controversial Abbott Point coal terminal in the Great Barrier Reef.
- The vast majority of property owners who sold their home in the September 2015 quarter sold at a profit, according to the latest CoreLogic RP Data quarterly Pain and Gain Report. The Report found that 91.6% of properties resold for profit over the quarter with 31.4% of homes selling for more than double their purchase price. The total value of all profit was $17.3 billion with the average gross ‘gain’ $265,605 per sale.
- Chinese investments in Korean companies soared 119% this year to $1.9bn, led by deals in the insurance, technology, health care and cosmetics industries, according Bloomberg.
- China’s government said monetary policy must be more “flexible” and fiscal spending more “forceful” to combat slowing growth in the world’s second largest economy.
- A gauge of Chinese cement makers, copper producers and steelmakers in the CSI 300 Index rose a second day, gaining 6% to the highest since November 12.
Ahead in Europe and US
- Suspect we will be hearing a lot more from Spain in the early part of 2016 as post election paralysis will undo much of the good work of cheaper fuel, a weak euro and ECB stimulus. Public debt has jumped to 100% of GDP and is nearing the safe limit for a country in a currency union with no sovereign central bank.
And finally just because it is the silly season:
In 2011 a similar jumper would have cost GBP38 online. Today GBP30. Deflation. That’s what keeps central banks up at night.
Ahead in Europe
- FTSE +20 points.
- DAX -68.50 points.
- CAC -52.50 points.
ASX 200 Index Today Aussie Dollar Today US72.20c.
- Volume was $3.29bn Daily (average $4.3bn)
- Dow Jones Futures up 27 points.
- Dow Jones was up 123 points overnight.