ASX 200 hits 5430 up 57 points on the days high as banks and resources outweigh aged care despair. Asian markets firmer, Japan up 0.66% and China up 0.28%. AUD pops up above 76c and US futures up 36, quiet ahead of Labor Day.
STOCKS AND SECTORS
The two main sectors drove us higher with Banks and Resources working in tandem for once.
- Banks put in a great day with the big four basket still locked in around $156.85, all up around 1.5%-2% today. Wealth managers also in demand with Macquarie Group (MQG) +1.90%Challenger Limited (CGF) +3.56% and even AMP +2.29%. Insurers also improved with brokers Steadfast Group (SDF) +3.18% especially firm.
- Resources led higher by Alumina (AWC) +8.36%, on its recent deal with Alcoa and possible takeover, and BHP +2.47%. Fortescue Metals (FMG) +3.72% and the golds back in the winners’ enclosure Evolution Mining (EVN) +6.70% and Resolute Mining (RSG) +8.02% again showing extreme volatility.
- Industrials were a little left out with IT Stocks mixed Aconex (ACX) -3.67% and Melbourne IT (MLB) +1.06% heading in distinctly opposite directions. Macquarie Atlas Road (MQA) -4.86% after the sell down of 10% by Macquarie Group at 532c.
- Consumer discretionary slipped as Aristocrat (ALL) -1.92% after speculation on legal moves by Maurice Blackburn. Other gaming stocks also saw selling on fears of further action. Tatts Group (TTS) -1.33% and Star Group (SGR) -0.51%.
- Food and agri stocks also easier Coca–Cola Amatil (CCL) -0.41%, Select Harvest (SHV) -3.02% and Elders (ELD) -2.51%.
- Shocking day for aged care providers with two brokers cutting forecasts and recommendations on Estia Health (EHE)-11.75%, Regis Healthcare (REG) -16.67% and Japara Healthcare (JHC) -14.71%. Last Friday the government clarified what fees the providers could charge and downgrades have followed.
- Speculative stock of the day: Directmoney (DM1) +130.77% bouncing after the recent sell off and the update on results.
- Woodside (WPL) +1.53% announced it had bought BHP +2.47% stake in the Scarborough LNG project for around US$400m. The deal will see Woodside take a 50% stake in one offshore permit (WA-62-R) and a 25% stake in a second offshore permit (WA-1-R), which together house the gas field off the coast of WA.
- Nextdc (NXT) entered a trading halt today raising money to develop a second data centre in Sydney and Melbourne. Reports the company is looking for around $150m.
- Pact Group (PGH) +3.47% after announcing an acquisition of specialty manufacturer Australian Pharmaceutical Manufacturers (APM) for $90m. APM is the leading provier of packaging for nutraceuticals in Australia.
- James Hardie (JHX) +1.87% announced it will repurchase 2.162m shares off Goldman Sachs in an accelerated share repurchase agreement with a value of US$35m. This is part of the existing US$100m share buy-back.
- Job ads rebounded in August after a dip in July, pointing to solid demand for labour and a moderate pace of employment growth ahead.
- The monthly survey by ANZ showed total job ads rose 1.8% in August, from July when they fell 0.8%, and taking the annual pace of job ads growth to 6.1%.
- Company operating profits rose 6.9% in the June quarter, following a 4.4% drop in the previous quarter and outpacing the predicted 2.0% rise.
- However, they were flat in the 12 months to June, which is more in line with the results of earnings season.
- Moody’s has reaffirmed Australia’s triple-A rating, but warned that a splintered Senate will make it more difficult for Canberra to balance the budget and reduce debt in the years ahead.
- Just to prove a point North Korea has fired three ballistic missiles into the sea during the G20 weekend festivities.
- Caixin PMI rose to 52.1 up from 51.7.
- Saudi Arabia and Russia agreed to work together to stabilise prices, without offering details on joint action, after Deputy Crown Prince Mohammed bin Salman and President Putin met in China on Sunday.
- Samsung may spend as much as $US1 billion, after deciding to replace all of the 2.5m Note 7 phones that were shipped since they went on sale two weeks ago. The estimated impact only represents less than 5% of Samsung’s projected net income of US$27.2 billion this year.
- Japanese bonds have risen to their highest level in six months today. The rout is being driven by speculation the Bank of Japan will reduce its bond-buying program at its next policy meeting Sept. 20-21.
- Hanjin Shipping will seek stay orders in 43 countries to protect its vessels from being seized, after its court receivership filing last week. Vessels of Hanjin ,the world’s seventh-largest container carrier with a 2.9% market share ,are getting stranded at sea and ports around the world. All those p[lasma and Samsung phones struck in transit.
EUROPE AND THE US
Positive opening in store for European markets with a rise of around 0.5%.
- Angela Merkel has suffered a serious setback in the German local elections over the weekend. Merkel’s CDU party came in an embarrassing third beaten, by anti-immigration and anti-Islam parties. The Alternative fuer Deutschland (AfD) party took about 21% of the vote behind the centre-left SPD’s 30%. The German CDU was backed by only about 19% of those who voted.
- Virgin Media is about to take control of the Formula 1 business that values the sport at around US$8.5bn.
- Joseph Stiglitz, a Nobel prize winning economist says that the UK can leave the UK and still thrive. He also said that the Monetary Union in the EU was a mistake.
And finally…………….time for an ethics question courtesey of the St James Ethics Centre
Are you as moral as you think you are?
The test features an unlikely, completely fictional situation in which you will have to make a decision.
You are in Florida, Miami to be specific.
There is chaos all around you caused by a hurricane with severe flooding.
This is a flood of biblical proportions.
You are a photojournalist working for a major newspaper, and you’re caught in the middle of this epic disaster. The situation is nearly hopeless.
You’re trying to shoot career-making photos.
There are houses and people swirling around you, some disappearing under the water.
Suddenly you see a man in the water.
He is fighting for his life, trying not to be taken down with the debris.
You move closer.
Somehow the man looks familiar.
You suddenly realize who it is.
It’s Donald Trump!
At the same time you notice that the raging waters are about to take him under forever
YOU HAVE TWO OPTIONS:
You can save the life of Donald Trump or you can shoot a dramatic Pulitzer Prize winning photo, documenting the death of one of the world’s most powerful Republican men hell bent on the destruction of America.
Here’s the question, and please give an honest answer.
“Would you select high contrast color film, or would you go with the classic simplicity of black and white?”