ASX 200 up a mere 4 points to 5480 as it struggled to kick on after a promising start as industrials and banks squibbed with solid gains in energy and material stocks. Low volumes and apathy didn’t help. Asian markets all back on line and positive with Japan up 0.98% and China up 0.31%. AUD hit to 75.50c on Fed chiefs’ comments with US futures down 36.
STOCKS AND SECTORS
- Banks struggled to make much headway today as all eyes on resources and energy stocks. The big four gave up mild gains to close down as dividends and results now the focus. National Bank (NAB) +0.04% the best of the bunch. Wealth managers mixed as Platinum Asset (PTM) -2.50% continues to slide on performance and increased competition. BT Investment Management (BTT) +2.92% picking up the slack and Emerchants (EML) +2.86% also doing well.
- Resources were the stars today with BHP +1.71% pushing towards 2400c followed by RIO +2.09% and surprisingly South32 (S32) +4.55% still enjoying strong institutional support.
- Gold stocks back in the dog house St Barbara (SBM) -5.45%, Evolution Mining (EVN) -2.69% and Silver Lake (SLR) -4.00%. One to trade positively was Beadell Resources (BDR) +7.69% on a broker upgrade.
- Energy stocks were unsurprisingly a star sector. Across the board buying with WorleyParsons (WOR) +6.25%, Santos (STO) +3.96% and Origin Energy (ORG) +4.14% some of the stand outs. Coals stocks too in demand led by stellar performer Whitehaven Coal (WHC) +5.15% and New Hope (NHC) +4.59% joining in. Stanmore Coal (SMR) +0.83% one of the few to stand still but pausing for breath maybe.
- Industrials were going nowhere as healthcare stocks slid led by the horror story that is Estia Health (EHE) -6.23% and Australian Pharma (API) -2.43%. Consumer discretionary stocks were mixed RCG Corp (RCG) +2.82% and Skydive the Beach (SKB) +12.71% plus Beacon Lighting (BLX) +5.88% some of the bright spots although Domino’s Pizza (DMP) -1.37% continued their unwind with APN Outdoor (APO) -3.47% taking some fund raising to pay for the Ooh!Media
- Speculative stock of the day: LBT +94.59% following a stellar run yesterday on FDA approval on their new Automated Plate Assessment System (APAS) issuing AI to analyse and interpret growth in microbiological cultures. Rigorous testing in 10,000 patients beat the experts in microbiology.
- Ooh!Media (OML) announced it was buying the office based Executive Channel Network for $68.5m. The purchase will be funded through a $60m placement at 475c. ECN is expected to add $8 million to Ooh!Media’s 2017 earnings before interest, tax, depreciation and amortisation, including 3.2 million in cost synergies.
- Telstra (TLS) -0.39% AGM had very little new to go on although the company did reaffirm the company’s 2016-17 guidance of mid to high single digit income growth and low to mid-single digit earnings growth.
- BP has dumped controversial plans to drill in the Great Australia Bight. It seems the numbers didn’t stack up after all. SA Government isn’t happy Jan.
- The Star Entertainment Group (SGR) -0.51% has unveiled plans for a 60 storey $500m new hotel and apartment building at Pyrmont. the proposed 215m tower will comprise a 220-room hotel and 150 residences at The Star.
- The number of owner-occupier home loan approvals is at a 15-month low after falling by 3.0% in August.
- The value of housing finance approvals, including loans to investors as well as home-buyers, has also fallen, to $31.413bn. That’s 1% down on July and at its lowest level since April.
- National Australia Bank’s monthly survey of more than 500 firms showed its index of business conditions rose one point to +8 in September, to remain above its long-run average. Its index of business confidence held at +6, after bouncing 2 points in August.
- Promising signs too with a 6-point jump in forward orders to a high +8, while the survey’s measure of capital spending also climbed to a strong +8.
- The government today launched its forts ever 30-year bond. It is thought it will be around $2bn-$3bn in size and the initial price looks likely to be set at 100-107bps over the implied 10-year bond futures contract. The March 2047 bond could yield between 3.21% and 3.28%.
- Global bonds are on a roll with Aussie 10 years now yielding 2.2436% running for its sixth straight gain. Germany’s 10-year has risen back above zero to 0.056%.
- Samsung Electronics has halted sales of its Galaxy Note 7 smartphones on and told owners to stop using them while it investigates reports of fires. The stock is down 7% in Korea today.
- China’s financial regulators plan to further tighten control on funds flowing into the property market with authorities including the central bank, the China Banking Regulatory Commission and the China Securities Regulatory Commission aiming to tighten controls on speculative real-estate investments.
- Singapore has closed a second Swiss bank over the widening corruption scandal in Malaysia.
EUROPE AND THE US
- PIMCO believes the Fed may raise rates two to three times in 2017. Higher economic growth and inflation would drive the central bank to tighten.
- Meanwhile Fed head Charles Evans from Chicago has warned that tightening monetary policy risks high social costs. Evans only gets to vote next year but believes that the “the bigger risk” was that inflation in the US would not get back to the Fed’s target of 2% “within an acceptable period of time”. Market pricing suggests a 67% chance of a December hike. He seems to be a lone voice in the Fed.
- As the Fed lines up the rate rise punters are deserting old in droves.
- The net-long position in gold futures and options fell 22% to 205,176 futures and options for the week ended Oct. 4, according to Commodity Futures Trading Commission data. Short holdings, or bets on price declines, surged by 59%, the most since May 2014.
- A report out of London that Goldman Sachs will slash 2000 city jobs if the Brexit leads to the UK losing its ‘passporting’ rights. These allow UK banks to sell their services across the rest of Europe. Seems no one knows what is going to happen with the negotiations and seems a lot of US bankers will have to start to learn German.
And finally…………..these are old but still good..any jokes send them in!!!Dont even care if they are rude or not..
“I said to my Personal Trainer: ‘Can you teach me to do the splits?’ He said: ‘How flexible are you?’ I said: ‘I can’t make Tuesdays.'”
“Doc, I can’t stop singing The Green, Green Grass of Home. He said: ‘That sounds like Tom Jones syndrome.’ ‘Is it common?’ I asked. ‘It’s not unusual’ he replied.
I went to the doctor the other day and said: “Have you got anything for wind?” So he gave me a kite.
I met a Dutch girl with inflatable shoes last week. I rang her up to arrange a date, but unfortunately she’d popped her clogs.