ASX 200 finishes the week on a sour note falling 83.4 points to test the 5000 level heading into the US jobs numbers tonight. Big four banks stripping 30 points alone. BHP and resources outperform but still weak. Asian markets Tankan with Japan down 3.47% and China down 1.6%. AUD steady as she goes at 76.52 with US futures -32.

Perhaps it was all a bad April Fool’s day joke but the market once again got trashed as the bank rally fizzled as the bears came back out to play. Volumes were low at around $4.2bn as many traders waited for tonight’s Non -Farm Payrolls number in the US. Futures volumes though were big as index selling hit all sectors. Nowhere was safe with very few spots of green on the market map.

The slightly better than expected Chinese PMI could not lift the gloom for long with a decent 40- point bounce failing to stick. After lunch the selling reappeared as the sellers still had orders to fill and the buyers once again stepped back. The meltdown in the Japanese market following the Tankan survey proved ‘unhelpful’ too.

For the week the index is down from 5084 to around that 5000 level. A 1.6% fall. A late rally spared our blushes from a 100 point weaker close. This morning we had suggested that 5050 would halt the decline but it was not to be as we sliced through that level and tested the 5000 level we thought we would see a few days ago.

We saw a big range again today with lows around 4976 and a high of 5075. All that window dressing yesterday was quickly undone. Couple that with regional weakness, some capital raisings from Duet and Western Areas and profit taking in mid-caps all ensured persistent weakness.

  • April is traditionally a good month for the ASX with May and June the time for reckoning.
  • Seven of the last ten Aprils have been positive. Average growth for the index is 1.97%. May averages a 2.3% decline over the last decade and June around 1.7%
  • The ASX 200 is still trading a range of 4750-5150. Stuck in the middle with you.

ASX 200 Index & Aussie dollar charts – Today

Stocks and Sectors

  • Resources at least in the big miners bucked the sell off with BHP +0.65%, RIO +1.05% and Fortescue Metals (FMG) +0.39%. Other resource stocks fared worst though with Incitec Pivot (IPL) -5.64% after broker downgrades and USD exposure and Bluescope Steel (BSL) -2.58%. Gold stocks were easier despite the rising bullion price last night with Newcrest (NCM) -0.35%, Oceanagold Corp (OGC) -0.84% and Silver Lake Resources (SLR) -4.84%
  • Energy stocks were again hit. Santos (STO) -2.73% has announced a new executive committee of six in an effort to streamline their business and drive efficiencies. Oil Search (OSH) -3.55%, Origin Energy (ORG) -3.73% and Woodside (WPL) -1.12% followed suit.
  • Financials were painted red across the board with wealth managers Macquarie Group (MQG)-2.86%, Henderson Group (HGG) -2.86% and Magellan Financial (MFG)-3.09%.
  • Banks took things badly again today as the bears were back in town. Losses of -22.8% across the big four with insurers slipping more in places with IAG -3.94% and QBE Insurance (QBE) -2.2%
  • Industrials were not spared today as Duet (DUE) -3.07%completed their $200m placement ensuring some profit taking in others in the sector. APA group (APA) -4.09% with healthcare also in the casualty ward led by Sonic Healthcare (SHL) -2.24% and Healthscope (HSO) -2.63% with Telstra (TLS) -1.31% giving up some recent gains.
  • Consumer stocks hit too Treasury Wine Estates (TWE) -2.18%, Woolworths (WOW) -1.76% and Wesfarmers (WES) -1.81%
  • Speculative stock of the day: Oklo Resources (OKU) +22.22% After announcing high grade gold intersections at Diabarou in Western Mali. 31m at 3.42g/t with 6m at 30.22g/t.

Corporate News

  • Primary Healthcare (PRY) -0.27% CEO is now suing the Fairfax Media after reports linking him to global corruption. Media reports have also mentioned Worley Parsons (WOR) -4.46% and Leighton Holdings (Now Cimic)+1.64% in the same enquiry. Peter Gregg was the former CFO of Leighton before joining Primary. Surprising that the PRY share price hardly moved in the news.
  • Suncorp Group (SUN) -2.35% after CIO Matt Pancino has left to join the Commonwealth Bank (CBA) as an executive GM.
  • Western Areas (WSA) -5.09% following the successful completion of the $60m placement at 200 cents. This was a small premium to the floor price of 195 cents and a7.4% discount to the previous trading price.

Economic News

  • Malcolm Turnbull’s Great Big New Tax plan has been defeated by the states today at the COAG meeting. Everyone can breathe a sigh of relief.
  • The Australian Industry Group’s performance of manufacturing index remains above the 50 level separating expansion from contraction, lifting 4.6 points in March to 58.1. That’s the highest level since April 2004 and the ninth consecutive month of growth.
  • The annual rate of growth in housing for capital cities, which has been falling steadily since July last year, is now 6.4 per cent for the 12 months to March. This time last year it was 7.4 per cent. At 6.4 per cent the rate is also closer to Australia’s ten-year annual growth of 5.4 per cent.

In Asia

  • China’s official factory gauge unexpectedly rebounded, suggesting the government’s fiscal and monetary stimulus may be kicking in. The manufacturing purchasing managers index rose to 50.2 in March, compared with estimates of 49.4. The non-manufacturing PMI rose to 53.8 from 52.7 in February.
  • Macau March casino revenue has fallen a worse than expected 16.3%
  • The $14bn bid for Starwoods Hotels group has been pulled by the Chinese group Anbang leaving the field clear for Marriott Hotels in the box seat.
  • Negative interest rates will make next year a difficult one for Japanese lenders and the central bank should examine the impact of the policy before pushing them further below zero, the new head of the country’s banking lobby said.
  • The Tankan index of confidence among large manufacturers stood at 6 in March, the Bank of Japan said Friday, declining from 12 three months ago. A positive number means there are more optimists than pessimists among manufacturers. Economists had forecast 8 in a Bloomberg survey.
  • Seems that Abenomics is struggling, to be polite. All that money in stimulus and those negative interest rates and still nothing. Structural reform and demographic challenges are the issue and are not being addressed.

Europe 

  • News out today that the current account deficit is the worst peace time number in the UK since records began in 1772 under George III. The GBP will remain under pressure at the Brexit vote looms.

And then there is the ratio of income to household debt.

Seems we are not the only ones with a housing issue as UK house price to income ratios continue to blow out.

FINANCE SUMMARY

And its good night from me and its goodnight from him.

RIP Ronnie

No more Ronnies. So Sad.

Clarence

XXXX

mt_tryforfree

NT Markets

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