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Next week is a biggie -buckle up punters, it could get interesting!

ASX 200 rises 17 points to 5163 in quiet listless trading led by banks and BHP. Asian markets recovered somewhat with Japan up 1.1% and China up 0.5%. AUD rose to 73.80 with gold steady at AUD$1738 and US futures up 13.

An understandably quiet days given the events overnight in the UK as markets paused and took a breath pre the crucial ‘Brexit’ next week. After opening 20 points higher and pushing ahead the market slid slightly to close the day up 15 points at 5162. Highs of 5178 and lows of 5148 for the day on low volume and no conviction.

For the week the ASX 200 was down around 3%.

So far Sell in May is panning out. Down 4% in June.

chart friday 17.6

Stocks and Sector Highlights:

  • Financials the highlight with the big four banks up around 0.8 % with National Bank (NAB)+1.05% the best of the bunch. Insurers were better too with IAG +2.5% the target of a broker upgrade. Wealth managers also bounced back with an especial focus on UK exposure. Henderson Group (HGG)+4.1 %, BT Investment (BTT)+4.3 % and Macquarie Group (MQG)+1.8 %.
  • Gold stocks in the profit taking camp today as fears wane. St Barbara (SBM)-8 %, Evolution Mining (EVN)-2.9 % and Northern Star (NST)-5.1 %
  • Speculative stock of the day: Carbon Energy (CNX) +55.6 % following the execution of the technology licencing agreements with Beijing JinHong Investment and CNX to profit from a 30% interest in the JV.

Corporate News

  • Aconex (ACX)+9.2% after winning a contract in Saudi Arabia for an airport construction project.
  • Elders (ELD)+12.4% after announcing a $102m equity raising with a 1 for 4 non-renounceable entitlement issue at 340 cents. The proceeds of the offer will be used to pay back the Hybrid issue ELDPA at $95.
  • Rhipe (RHP)-4.7% on an update on the progress in the expanding cloud market and additional Microsoft Cloud Solution Provider (CSP).
  • Superloop (SLC) in a trading halt offering investors one new share for every seven they already owned. New shares were being sold at $2.10 each which was a 12.9 per cent discount to the last close. Morgans was seeking institutional bids by Monday, with the retail offer set to launch on June 23. Superloop listed in June 2015.
  • TZ Limited (TZL) trading halt as the company looks to raise $4m with 36m new shares to be placed at 11 cents. TZL is headed by Mark Bouris.
  • NRW Holdings (NWH) +4.6% following a contract win for $30m of bulk earthworks and civil works for RIO.
  • Origin Energy (ORG) +0.2% and Duet (DUE) unchanged following a deal for ORG to sell their Cullerin wind farm to DUE.

Economic News

  • In the Coalition’s three years in office, part-time employment grew 306,000 and full-time employment just 150,600 according to the Bureau of Statistics.
  • This long-term hollowing out of employment stands in stark contrast to Labor’s six years in which full-time and part-time employment grew in tandem, full-time employment climbing 439,000 and part-time employment 471,000.
  • The unemployment rate is steady at 5.7 per cent, exactly the rate the Coalition inherited in 2013. In the first half of the Coalition’s term, it climbed to a peak of 6.2 per cent in January and February 2015, before falling to 5.7 per cent in late 2015.

Yesterday for the first time in history 10 year Aussie bonds dropped below 2% Three year bonds at another record low of 1.5%.friday 17.3

friday 17.6friday 17.1In Asia

  • Japan’s 10-year bonds fell for the first time in seven days, lifting their yield by one basis point to minus 0.19 %. It sank to a record minus 0.21 % in the last session.
  • When turning Japanese is just turning negative.

 

friday 17.6.4

Europe and US

  • Follow the money is always good advice
  • This is a good chart from the quant team at UBS showing where the money flows from ETFs since the end of May. Interestingly that the UK is seeing inflows as Europe sees outflows.

friday 17.6.5

And finally……………

A guy stood over his tee shot for what seemed an eternity; looking up, looking down, measuring the distance, figuring the wind direction and speed. Driving his partner nuts. Finally his exasperated partner says, “What’s taking so long? Hit the lasted ball!”

The guy answers, “My wife is up there watching me from the clubhouse. I want to make this a perfect shot.”

“Forget it, man-you don’t stand a snowball’s chance in hell of hitting her from here!”

Clarence

XXXX

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NT Markets

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