Joyeux Quatorze Juillet

ASX 200 finished up 23 points crucially above the 5400 level at 5412 on a far more muted day. Six days in a row of gains. Banks, healthcare and Telcos better as miners and golds in profit taking mode. Asian markets mixed though with Japan waiting for stimulus up 0.98% and China off slightly down 0.3%. AUD steady at 76.22 and US futures up 54.

STOCKS AND SECTORS

  • Banks regaining some mojo today with around a 1% rise for the big four as REITS and other financials also benefitted from sector rotation out of miners and energy stocks back into the more defensive sectors.
  • Miners suffered the inevitable consolidation after recent strong gains with Fortescue Metals (FMG) -4.09% and South32 (S32) -2.61%. Incitec Pivot (IPL) -8.95% had a shocker following a broker downgrade by UBS.
  • Gold stocks eased but still well supported with St Barbara (SBM) -0.83% and Northern Star (NST) -1.23%. Metals X (MLX) +2.56% pushed higher again on broker upgrades and exposure to base metals. Nickel superstar Western Areas (WSA) -3.99% saw profit taking as did Whitehaven Coal (WHC) -2.96% although New Hope (NHC) +8.25% continued to play catch up.
  • Bellamy’s (BAL) +4.98% a strong performer as news of their appointment of a high profile corporate adviser in Greenhill following global M&A activity. One broker noted that Danone paid 35 times earnings for their last acquisition and would give BAL a valuation f 2200c if the same multiple were applied.
  • Treasury Wine Estates (TWE) +3.8% celebrated today after a broker upgrade from JP Morgan. They now have a price target of 1025c with Asian growth and margin expansion their key driver.
  • Speculative stock of the day: Renascor Resources (RNU) +44.44% after announcing high grade graphite at the Siviour Graphite deposit now Australia’s largest JORC resource. Total graphitic content of up to 20.5% SIV034

CORPORATE NEWS

  • Bluescope Steel (BSL) +7.24%% has issued an earnings update with full year EVBIT now expected at $570m and net debt reduced by $600m.
  • Transurban (TCL) -0.34% after fourth quarter revenue numbers were up 17.4% with proportional toil revenue the best measure up 17.5% to $513m as the Easter holiday fell in the period. Sydney, average daily traffic rose 6.5% to 632,000 trips over the three-month period.
  • Woodside Petroleum (WPL) -1.07% has agreed to pay about $US430 million to
  • buy ConocoPhillips out of its exploration interests in Senegal. It will give Woodside 35% of the SNE and FAN deep-water oil discoveries reported by venture operator Cairn Energy in 2014-16.
  • BSA +17.31% after a NBN contract for five years was announced with revenue expected to be around $50m in the first year. This complements the contract already announced in December 2015.
  • Berkeley Energia (BKY) +6.98% confirmed today the Salamanca project is one of the world’s lowest cost producers of uranium with a DFS showing it can produce 4.4m pounds of Uranium a year at a cash cost of US$13.30 a pound over the initial ten-year period.

ECONOMIC NEWS

  • Employment rose 7,900 from May; economists forecast 10,000 gain
  • Jobless rate rose to 5.8% from 5.7%; matching economist estimates
  • Full-time jobs jumped by 38,400; part-time employment fell by 30,600
  • Participation rate, a measure of labour force as a share of population, rose to 64.9 % from 64.8% economists predicted 64.8%.

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  • New Zealand’s central bank said it will issue an unscheduled assessment of the economy next week.
  • The odds of a quarter-point cut at the next OCR review on Aug. 11 rose to more than 60% from 40%

ASIAN NEWS

  • South Korea’s central bank left interest rates unchanged at a record low. The Bank of Korea lowered its economic growth forecast for this year to 2.7 %, from an April projection of 2.8 %, and trimmed its inflation estimate to 1.1 % from 1.2 %.
  • Nintendo Co. jumped 15 % to a five-year high, boosted by the success of its Pokémon Go mobile game.

In China

  • Yum! Brands Inc. beat second-quarter profit estimates and raised its forecast after the company’s KFC chain performed better than it expected in the battered Chinese economy.Net income rose to 75 cents a share, beating estimates of 74 cents a share. Yum is spinning off its Chinese operations to concentrate on domestic KFC stores.

In Japan

  • The number of Japanese living in the country fell for a seventh straight year, down by 271,834 to 125.9 million people as of Jan 1.

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  • 30 million Japanese died during the year, more than the 1.01 million births.

EUROPE AND THE US

  • The UK has a new Chancellor with Hammond now at No. 11 whilst May is at No. 10 then perhaps Clarkson is at No 12?
  • Expect a rate cut from BOE chief Mark Carney tonight to stimulate the UK economy.
  • UK housing buyer demand hit an eight-year low as Brexit was confirmed by the Royal Institution of Chartered Surveyors. House prices are expected to fall across the UK in the next three months.

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And finally….

Geoffrey, a middle-aged British tourist on his first visit to Germany finds the red light district and enters a large brothel. The madam asks him to be seated and sends over a young lady to entertain him.

They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she gasps and runs away! Seeing this, the madam sends over a more experienced lady to entertain the gentleman.

They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear, and she too screams, “No!” and walks quickly away.

The madam is surprised that this ordinary looking man has asked for something so outrageous that her two girls will have nothing to do with him. She decides that only her most experienced lady, Lola, will do. Lola has never said no, and it’s not likely anything would surprise her. So the madam sends her over to Geoffrey’s. They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she screams, “NO WAY, BUDDY!” and smacks him as hard as she can and leaves.

Madam is by now absolutely intrigued, having seen nothing like this in all her years of operating a brothel. She hasn’t done the bedroom work herself for a long time, but she’s sure she has said yes to everything a man could possibly ask for. She just has to find out what this man wants that has made her girls so angry. Besides she sees a chance to teach her employees a lesson.

So she goes over to Geoffrey and says that she’s the best in the house and is available. She sits and talks with him. They frolic, giggle, drink and then she sits in his lap.

He leans forwards and whispers in her ear, “Can I pay in Pounds?”

 

Clarence

XXX

 

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