ASX had a shocker, down 83 points to 5360 as a perfect storm hit with disappointing AGMs, Apple results, inflation numbers, rate cuts evaporating and rising Aussie dollar. Resources tried to hold the line against across the board selling. Asian markets more restrained Japan up 0.08% and China down 0.21%. AUD rises to 76.80 on CPI above expectations. US Futures -38. Looks overdone on ASX.
STOCKS AND SECTORS
- Resources avoided the worse of the rout today with BHP -1.51%, RIO +1.70% and Fortescue Metals (FMG) +0.92%. Gold stocks tried hard to rally but it was tough in the negative environment. Resolute Mining (RSG) +5.01%, Saracen Mineral (SAR) +5.08% and Evolution Mining (EVN) +0.92% the best of them.
- Coal stocks dropped finally with Whitehaven (WHC) -1.59% and New Hope Coal (NHC) -2.84% though Stanmore Coal (SMR) +1.43% showed gains.
- Energy stocks fell heavily on a lower WTI price. Oil Search (OSH) -3.01%, Santos (STO) -2.97% and recent favourite Karoon Gas (KAR) -8.16% suffering heavy falls.
- Banks finally gave way under the pressure of anticipation of the National Bank (NAB) -1.22% result tomorrow. Brokers are starting to hedge their bets on the outlook. Not helpful. The big four basket hit $160.50. Could have been worse. Few places to hide in the rest of the financials either with Macquarie Group (MQG) -2.13% and Henderson Group (HGG) -4.00% taking on water. One to buck the selling was NIB (NHF) +3.12% though other insurers sold off. Medibank Private (MPL) -1.90% and QBE -2.42%.
- Consumer stocks took a huge hit today following Wesfarmers (WES) -5.71% results. Woolworths (WOW) -0.51% the beneficiary it seems but for how long as it reports numbers Friday. Big hits across the board to Brambles (BXB) -2.25%, Sydney Airport (SYD) -3.03%, JB Hi-Fi (JBH) -3.68% and gaming stocks coming up bust. Crown Resorts (CWN) -2.80% and Star Entertainment (SGR) -1.97%. Tourist stocks were also hit hard following the tragedy in Queensland. Won’t dwell on Ardent (AAD) -14.89% but Mantra Group (MTR) -3.98% also sold off.
- Healthcare stocks tried, they really did, with Ramsay (RHC) +1.46% affirming guidance helping the sector but more falls for Healthscope (HSO) -1.32% and Sonic Healthcare (SHL) -2.25% together with Primary Health Care (PRY) -3.27%.
- Speculative stock of the day and IPO of the year so far: CFOAM (CFO) +250.00% after trading started today. The company raised $9m. The US based CFOAM makes a carbon product from metallurgical coal.
- Wesfarmers (WES) -5.71% following disappointing sales numbers with Target in the spotlight on continuing problems. Wesfarmers, said same-store food and liquor sales rose 1.8% in the three months ending September, well down on growth of 3.3% in the June quarter and 3.6% in the year-ago period. Coles continues to outperform arch rival Woolworths (WOW) -0.51%, where same-store food sales are forecast to grow between 0.3% and 0.5% for the September quarter.
- Ainsworth Gaming (AGI) -10.40% timing is everything for 93-year old Len Ainsworth after selling his stake in the company in June. Just before todays’ update on unit sales showing a 30% decline reflecting the competitive nature of the market. Ainsworth sold his stake at 275c to Novomatic who probably now wish it had never bothered.
- Casino operator Crown Resorts (CWN) -2.80% and slot machine maker Aristocrat Leisure (ALL) -2.64% are being sued, over claims a pokie machine provided misleading information to customers about their chances of winning. Would have thought everyone knew you could not win.
- Ramsay Healthcare (RHC) +1.46% reaffirmed earnings guidance with core EPS growth expected to be 10-12% for FY17.
- Children’s clothing retailer Pumpkin Patch (PPL.NZ) has appointed an administrator an administrator in NZ.
- Staying in NZ, Auckland Airport (AIA) -5.60% following monthly traffic numbers up 11.9% together with 4 new airlines now flying into Auckland.
- Lynas (LYC) +% announced a proposal to amend its debt facility with JARE and other convertible bond holders. The agreement will deliver significant interest savings but will extend the term by 2 years.
- Headline CPI grew by 0.7% over the quarter, against 0.4% over the June period, bringing the annual rate to 1.3% from 1%. The trimmed mean CPI rising 0.4% against the prior 0.5%, leaving the annual rate unchanged at 1.7%.
The Defib machine is working it seems. Rate cuts off the table.
- Seems Melbourne Cup will be the only story after all, with odds of a Tuesday rate cut diminishing.
- Galaxy Entertainment Group Ltd., Macau’s second-biggest casino operator by market value, posted third-quarter profit that beat expectations. Profit jumps 28%, lifted by mass market as VIP revenue fell. Changing market conditions as tourist friendly resorts do better than VIP whale casinos. Mss market focus paying off it seems.
- A Chinese business man is going to fly milk direct from Tasmania to Ningbo in Eastern China early next year. Milk from Van Diemans Land (VDM) will be flown every week direct to China. Initially, fresh milk will be sold in 1-litre and 600ml cartons, with plans to add yogurt and other dairy products. This follows the purchase of VDM earlier this year.
EUROPE AND THE US
- Focus on Apple numbers. Looking for a return to revenue growth in December quarter. Suspect Pixel will have something to say about that with Google launching its new iPhone equivalent. Hopefully it does not explode unlike the Samsung one.
- Mark Carney is being questioned on whether he will be looking to extend his contract as governor of the Bank of England beyond 2018. Mark Carney said he would not be swayed by political issues as he weighs up the option of departing in two years’ time or extending his contract by a further three years to 2021.
- The new third runway at Heathrow shows ‘Britain is ready for takeoff’. Industry is demanding that the Government gets on with the job, with Ryanair boss Michael O’Leary calling for an end to “dithering”. Some numbers to ponder. Cost GBP17.6bn. 40 new destinations. GBP 61bn boost to the economy. 2025 expected opening for third runway.
My friend told me he had the body of a Greek god. I had to explain to him that Buddha is not Greek.
Sorry…Mahatma Gandhi often walked barefoot which produced an impressive set of callouses on his feet. He also ate very little, making him rather frail and with his odd diet he often suffered from bad breath. This made him a super calloused fragile mystic hexed with halitosis.