FRiday 3rd

 

ASX 200 rallies 40 points at 5318 in quiet trading in front of a big US jobs number tonight. Strong gains across all sectors but not enough to salvage a 1.6% fall for the week. Asian markets mildly positive too with Japan up 0.4% and China up 0.7%. AUD stronger at 72.4 cents and US Futures down 6.

A quiet positive end to the week that was. Nothing much to write home about as book squaring and a bounce in the banks helped us limp towards the weekend. In the final analysis the market finished up 36 points for a loss of 90 points for the week. Eight weeks of gains was never going to be easy as the head winds loom. As we head towards the FOMC meeting and the Brexit vote more and more players will step away from the chocolate wheel. Volumes and stories were in short supply, so much so that Sky Business continued to run the ‘biggest’ story of the day that CIO director Clive Whincup had resigned. Hardly even enough to prompt an official announcement from Woolworths themselves. It seems that no one really cared or even knew who he was. Sorry Clive I am sure you are important really.

All sectors gained but volume was hardly enough to stir a supermodel out of their bed let alone a stockbroker from his lunch and afternoon nap. As the finish line approached we saw some renewed enthusiasm and we closed near our high for the day.

Range was 5324-5286. Trend still needs to be down as June is shaping up to be a much quieter month with momentum fading.

Stocks and Sector Highlights:

  • Financials were solid Macquarie Group (MQG)+2.11% and ASX +2.41% the standouts.
  • Consumer stocks Woolworths(WOW) +0.65% and Wesfarmers (WES) +0.95% bounced back. Telstra (TLS) +1.08% also firm.
  • Aged care providers bounced a little. Japara Healthcare (JHC) +1.23%, Estia (EHE) +1.13% and Regis Health (REG) +2.05%.
  • Lithium majors Orocobre (ORE) -2.29% slipped again as fears that the company will need to raise money continued to weigh on the sector plus the bubble conditions identified in the media.
  • Bid target ALS-2.33% eased as brokers suggested suitors would struggle to find value above 530 cents, the current highly conditional bid.
  • Speculative stock of the Day: Global Geoscience (GSC) +250% after announcing yet another lithium project, this time in Nevada with a Li-Boron project. Huge volume as the day traders rejoiced.
  • IPO watch: Recent listing Swift Networks (SW1)-8.51% after a big week on the boards with a low of 16 cents and a high of 23 cents following a RTO. They provide entertainment to remote mining camps.
  • GTN 1.42-% listed this week, which provides traffic reports seems to have stalled a little. Big valuation at $400m.

Corporate News

  • Magellan Financial (MFG)+1.57% after their FUM report today showing net inflows of $158m and total FUM at $42.6 up from $39.9. Shows what good performance they have had.
  • ASX +2.41% following their monthly compliance activity reports. Scores on the doors. New Listings 10. Delistings 9. Total 2206. Insider trading cases won. Just by ASIC.
  • Asciano (AIO) +0.11% shareholders have voted almost unanimously to take the money from Qube and Brookfield. Investors will get 915 cents in cash on August 19th. Assuming the ACCC (D Day is July 29Th) allows it to go through that is.
  • South32 has warned of more pain to come for miners. They believe the recent rise in commodities is not sustainable. They have cut a further 270 jobs on top of the 1,750 already announced in February and have threatened to close the Cerro Matoso ferronickel mine in Colombia, on industrial issues.
  • AWE +6.47% has upgraded its Waitsia 2P reserves.
  • McGrath (MEA) +0.47% back in the news with rumours of a potential private equity suitor.
  • Treasury Wine Estates (TWE)-0.78% is restructuring its Californian assets with the sale of its Paicines winery and a few other small vineyards.
  • Expect a rash of retail offers from Kogan, the Shaver Shop and online book seller Booktopia. All up it seems around $275m in available equity.

Economic News

  • International Air Transport Association (IATA) raised expectations for record global airline earnings this year to $US39.4 billion, higher than the $US36.3 billion it forecast in December.
  • IATA said carriers would on average make $US10.42 for each passenger carried but the industry’s margins are still well below other sectors.
  • ME Bank, which is owned by 29 superannuation funds, is the latest lender to ban foreign borrowers from taking out mortgages, adding to the fears about the scale of possible fraud and money laundering under investigation by the nation’s top five banks.

In Asia

  • Caixin Services PMI at 51.2 as growth slows. Slow business orders, marginal job creation and lower production among manufacturers were key factors that underpinned May’s tepid performance, Caixin said. Business optimism slid to its lowest level so far this year.

Europe and the US

  • Not sure why the UK would want to belong to this club of losers. The ECB upgraded its 2016 Eurozone growth forecast after first quarter growth beat all expectations, seeing a 1.6 % expansion, above the 1.4 % it predicted in March. It kept its forecast of 1.7 % for next year unchanged while trimming it for 2018 to 1.7 % from 1.8 %.
  • It also raised its 2016 inflation forecast to 0.2 % from 0.1 %, citing factors including the base effect of a recent rise in oil prices.

And finally, the Indian government has revealed plans to sell Ganges Holy water online. The plan is to help revive the flagging postal service by allowing Indians to buy water online and have it delivered. Even Ahmed Fahour hasn’t thought of that one. Yarra water or Harbour water?

Stay safe in NSW this weekend it is going to get wild and wooly out there.

Clarence

XXX

Just putting it out there but Beeks is thinking about writing a morning ‘what to expect report’ again for his fans..what do you think? Would you be interested? Let me know.

Will only do it if there is a few that want it..will include overnight stuff..usual ramblings..joke of the day and idea of the day too, thought I would call it the Orange Crop Report..You know what I am talking about!!!

dukes

thecrop report.jpg

Have a great weekend and finally a word from our sponsors!

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