ASX 200 bounces off 5500 again as Telstra and Westpac drag index down. ASX 200 closes down 36 at 5508 after a low of 5483. Asian Markets mixed again with Japan closed today and China up 0.64%. AUD continues to look strong at 77c. US futures up 37.

STOCKS AND SECTORS

  • Banks back in focus today following a disappointing capital update from Westpac Bank (WBC) -% and broker downgrades on Commonwealth Bank (CBA) -%. The big four basket has dropped back to $158.60. Insurers and wealth managers also slipped as the WBC numbers showed pressure on margins in the business. AMP -% one of the worse with Magellan Financial (MFG) +% a highlight along with BT Investment (BTT) +%. REITS also took a breather from their meteoric run. Arena REIT (ARF) -%, Phileo Australia (PHI) -% and Mirvac (MGR) -% the standouts.
  • Gold stocks not feeling the love as the AUD pushes higher. Evolution Mining (EVN) -%, St Barbara (SBM) -% and Perseus Mining (PRU) -%.
  • Discretionary spending was back. Did it ever go out of fashion? Automotive Holdings (AHG) +% a good day as CEO transition seemed to inspire the buyers removing an uncertainty. REA Group (REA) +% bounced after results digested and Flight Centre (FLT) +%
  • Lithium stocks took a broker downgrade very hard. Pilbara Minerals (PLS) -% and Galaxy Resources (GXY) -% especially unloved together with General Mining (GMM) -% although producer Orocobre (ORE) -% fared slightly better.
  • Mining services perked up led by Cimic (CIM) +% and ALS Ltd (ALQ) +%.
  • Tech stocks strong Carsales (CAR) +% , Aconex (ACX) +% and NextDC (NXT) +%. Netcomm Wireless (NTC) +% also moving up well. Together with Senetas (SEN) +%
  • Speculative stock of the day: Legend Mining (LEG) -% after an ASX price query with no new information apart from the announcement a few days ago of the sale of its Independence Group shares for a consideration of $4.05m.

CORPORATE NEWS

  • Telstra (TLS) -% after announcing a 36.6% increase in full year profits of $5.8bn inflated by the $1.8bn sale of their Autohome stake earlier this year. The telco also announced a $1.5bn buy back and a 15.5c dividend. Capex will rise to $3bn to keep the company ahead of its competitors.
  • Westpac Bank (WBC) -% softer non-interest income in the third quarter due to subdued markets and rising funding costs. Institutional activity has remained subdued leading to lower markets-related income and a decline in fees from debt markets activities”. Higher insurance claims, had contributed to third quarter non-interest income “being around 5% below the 1H16 quarterly average”. Non-performing loans remain near cyclical lows.
  • Magellan Financial Group announced a 14% in full-year net profit to $198.4 million on higher management and performance fees. EPS rose 13% and the dividend is 38c fully franked.
  • The competition watchdog will not oppose a bid for The Good Guys by JB HiFi (JBH) -%. The company is keen to buy The Good Guys to accelerate its home appliances strategy.
  • Nick Scali (NCK) +% Report NPAT up 53.1% on revenue up 30.4%. Like-for-like sales rose 11.1% in the year. There were also 7 new stores.
  • Sealink (SLK) +% after a 141% increase in underlying NPAT to $23.1m. Underlying EPS was up 94%. Very good result and the benefits of increased scale starting to drive profits.
  • Cellnet (CLT) +% Profit up 6% a fully franked 1c dividend with a positive profit outlook.

 ECONOMIC NEWS

  • Treasurer Scott Morrison has blocked the sale of Ausgrid to any foreign companies citing national security concerns. The sale was potentially worth around $10bn.
  • The RBNZ delivered a 25bp cut to take the headline rate to 2%. It was the sixth such rate cut in 14 months. The currency rallied on the news as there appeared to be no further easing bias from the RBNZ.

ASIAN NEWS

  • Singapore cut the top end of its 2016 growth forecast to 1 percent to 2 percent expansion after the GDP expanded at a mere 0.3%
  • China Mobile the world’s largest phone carrier added 116 million 4G accounts and profits rose 5.6% to US$9.1bn.

EUROPE AND THE US

  • Deutsche Telekom AG reported an 8.6% increase in second-quarter profit on surging sales at its U.S. mobile-phone unit, offsetting a revenue drop in its German home market. Earnings beat forecasts slightly at EUR 5.46bn
  • Europeans are finally starting to spend with record low interest rates driving consumers to shelve saving and start spending.
  • NBC have been criticised for the worse ever US coverage. Having paid US$1.2bn they have been accused of excessive advert breaks, sexism from presenters, poor commentary and patronising attitudes. Sound familiar.

And finally………….

A biologist, a chemist and a statistician are out hunting. The biologist shoots at a deer and misses 5ft to the left. The chemist takes a shot and misses 5ft to the right. The statistician yells “We got ’em!” Must work for the ABS!

John Glenn…
As I hurtled through space, one thought kept crossing my mind – every part of this rocket was supplied by the lowest bidder.

Arnold Schwarzenegger…
Having more money doesn’t make you happier.

I have 50 million dollars but I’m just as happy as when I had 48 million.

Clarence

XXXX

Feel free to share around.. the more the merrier!

mt_tryforfree

NT Markets

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