ASX rises then falls then recovers slightly to close down 8 points at 5362 as banks suffer from a break out of hostility in the investor loan market. Resources shine. Volume remained low at under $4bn. Japan weaker down 1 % as China and Hong Kong closed. AUD 74.64 cents and US Futures down 15.

After a strong start to the session and a high of 5386 before the inevitable happened as resources tried valiantly to hold up the market Atlas like before the financials fell into a whole lot of trouble.

The profit downgrade from Amcor (AMC) -% coupled with Surfstitch (SRF)-% did nothing to endear confidence either and the market fell backwards to close at 5340 as it continues to struggle in this rarefied atmosphere.

Resources once again were the place to be especially base metal producers like Western Areas (WSA)+% and Independence Group (IGO)+%.

Banks were not so lucky. We have currency wars and now we have mortgage wars as Commonwealth Bank (CBA) has announced plans to lure investors to their cunning investment loan trap with an offer too good to refuse.

too good

 

Here’s the plan: CBA will cut investment property interest rates and minimum loans by more than 90%. ME Bank cut rates on investment property to 4.24% with a deposit of 20% or more.

CBA is cutting rates on its extra home loan to 4.24% to match them. This is against the Standard variable rate of 5.35%. They have also cut the minimum loan from $150,000 to $10,000. No wonder banks are weak.

Seems that all that bite from APRA is now being ignored as banks compete for limited business.

The big four bank basket down to $157.25.

Stocks and Sector Highlights:

  • Financials under pressure. Big banks fell around 0.7 %. Other yield stories also fell with Telstra (TLS)-0.73 % and Woodside (WPL) -1.33 %.
  • Gold miners recovered on higher bullion prices. AUD bullion close to $1700 again. St Barbara (SBM) +7.49 % and Regis Resources (RRL)+6.77 % standouts.
  • 9 Spokes (9SP)-25 % floated today and immediately fumbled their way to a big discount on the 20 cents issue price. They raised $25m in the IPO which is not looking a raging success given the first day of trading.
  • Speculative stock of the Day: Segue Resources (SEG) +40 % after positive results from their Gascoyne Lithium project.

Corporate News

  • Amcor (AMC)-8.05 % announced a downgrade to their Venezuelan operations and a potential write off of around US$450m, comprising a loss of US$350m from the rigid plastics business there and a US$100m from a restructure of its tobacco packaging division. FY17, it expects a before tax loss of $US40 million in its Venezuelan operations.
  • Surfstitch (SRF)-21 % shocked the market again with another write down due to a writedown of a transaction with a content provider affecting the full year forecast by $20m now forecasting a loss of $18m. Founder and CEO Justin Cameron has bitten the dust too with Mike Sonand dropping into his wave.
  • LNG +4.9 % after a huge run today again on takeover rumours, it hit 122 cents on massive volume before an ASX speeding ticket and ‘no talks’ according to the company, sent the price back to earth.
  • Kogan announced an offer of new shares at $1.80 each in an IPO that will see the company list on the ASX on June 30 with a value of $168m at listing. Founder Ruslan Kogan will retain 69.2% of the company post float.
  • IAG -1.22 % announced claims from the East Coast low storm would be in the region of $60-80m. Suncorp (SUN) +0.32 %, has not yet said what claims will cost the business.
  • Sky Networks TV (SKT) +20.5 % following news it would be taken over by Vodafone NZ in a NZ$1.25bn deal.
  • Brickworks (BKW)+1.56 % following a profit upgrade thanks to buoyant building activity and a greater contribution from its property development business. The building products division, Austral Bricks, is on track to deliver a significantly improved result for the full financial year.

Economic News

  • The RBNZ left interest rates on hold as the soaring housing market continues to leave him little room to manoeuvre.

In Asia

  • China, Taiwan and Hong Kong Equity markets closed for Dragon Boat day
  • Chinese PPI -2.8% forecast 3.2%. Mining and raw-materials producer prices slumped less in May than the previous month, though still recorded the biggest declines. Mining producer goods fell 9.6 % last month, versus a 13 % drop in April. Seems the authorities push to cut capacity is paying off.
  • CPI up 2% forecast 2.3%. Vegetable prices dropped 21.5 % in May from April, while pork and gas prices rose, the statistics bureau said. Compared with a year earlier, gains in food prices slowed to 5.9 % from 7.4 % in April. Potential room for more stimulus.

South Korea’s central bank has unexpectedly cut the benchmark interest rate to a new record low as inflation has fails to accelerate and exports are far from a rebound.

Europe and the US

  • New record lows for German 10-year bonds.

thursday 1.9.6

  • Brexit Poll tracker– A shift towards ‘leave’ but ‘Remain’ still looks the most likely.

thursday 2 9.6

thursday 3.9.6

  • Apple has changed the cut that some App developers get, including a paid search advertising for the first time.
  • Deutsche Bank has launched a tirade against the ECB and warns that negative interest rates are destroying the European project. They say ‘Super Mario’ ‘has lost the plot’ and his negative interest rate policy settings have allowed politicians to delay necessary structural reforms.

And finally…………

A devoted wife had spent her lifetime taking care of her husband. Now he had been slipping in and out of a coma for several months, yet she stayed by his bedside every single day.
When he came to senses, he motioned for her to come near him.
As she sat by him, he said, “You know what? You have been with me all through the bad times. When I got fired, you were there to support me. When my business failed, you were there. When I got shot, you were by my side. When we lost the house, you gave me support. When my health started failing, you were still by my side. You know what?”
“What dear?” she asks gently.
“I think you bring me bad luck.”

Have a great day/night!

 

Clarence

XXX

 

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Putting the band back together-

bill clinm

 

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