ASX limped to close up 1.5 points to 5328 after a better positive start and a tilt at 5350. Energy, banks and golds were the only winners in a red sea. Materials and consumer stocks weighing. Sector rotation continues with new money on the sidelines. Asian markets rose slightly with Japan up 1.15% and China unchanged. AUD steady at 75.49 and US futures barely moved up 1.
STOCKS AND SECTORS
- Resources a mixed picture with iron ore miners talking the falls in ore hard. BHP -2.32%, RIO -3.41% and Fortescue Metals (FMG) -3.78% whilst selective base metal stocks did ok. Orocobre (ORE) +7.24%, Syrah Resources (SYR) +1.89% and Oz Minerals (OZL) +1.02% on more broker upgrades.
- Gold stocks back in favour led by Newcrest (NCM) +2.48% and Evolution (EVN) +2.94% but demand a little muted as punters licked their recent wounds. The play book was for gold to rally hard on a Trump victory.
- Energy stocks did well on the 5% plus rise in WTI Crude. Oil Search (OSH) +3.35% Beach Energy (BPT) +7.14% and possible takeover target Santos (STO) +1.50%.
- Banks gaining strength with National Bank (NAB) +0.96% and Commonwealth Bank (CBA) +0.60%. Even regionals had a good day with Bendigo and Adelaide (BEN) +1.57% and Bank of Queensland (BOQ) +1.67%
- Industrials again a weak market. Wage numbers didn’t help but the rot is setting in as investors turn sour. Aristocrat Leisure (ALL) -2.23% REA Group (REA) -3.97%, APN Outdoor (APO) -2.92% and even AMA Group (AMA) -5.50% together with Domino’s Pizza (DMP) -1.85%.
- Bond proxy stocks though benefitted today after big sell offs. Telstra (TLS) +0.21%, AGL Energy (AGL) +1.24% Duet Group (DUE) +3.26% though Transurban (TCL) -0.61% and Sydney Airport (SYD) -1.02% in a better place.
- Healthcare stocks back in A&E despite CSL -2.28% on some promising trial results. Mayne Pharma (MYX) -5.17% and Impedimed (IPD) -6.67%. IT Stocks failed to catch fire from the FANG rally last night with Aconex (ACX) -5.58%. Technology One (TNE) -2,63% and WiseTech (WTC) -2.85%
- Reality check for new entrant Bravura (BVS) -13.79% following a highly disappointing debut giving further IPO aspirants some for cause for thought.
- Speculative stock of the day: IOT Group (IOT) +38.46% on heavy volume following a positive presentation and a business update at the AGM. Seems the flying selfie Roam-e sales are on track and drone technology is to become the focus of the company using its IP in facial recognition.
- RIO -3.41% is facing some awkward questions, to say the least, over the Guinea email scandal and the consultant paid $10.5m. Seems the company lawyers knew of the emails around a year ago.
- Surfstitch (SRF) unchanged has vowed to rebuild despite forecasting an even sharper decline in operating cash flow because of legal costs. The company has warned a decline in cash from operations in the 2016-17 financial year is set to blow out from its previous forecast of $6-7 m to $9-10 m.
- Graincorp (GNC) -0.23% reported a 3.7 % fall in statutory net profit to $30.9 m in the year ended September 30, which was dragged down by $21.8 m in one-off costs. The company had given guidance in February for underlying net profit in the range of $40 m to $55 m.
- Brambles (BXB) -0.60% has reaffirmed guidance at its AGM.
- Woolworths (WOW) -0.26% announced the head of Big W would be leaving after a stint in the hot seat of less than a year. According to the company Sally MacDonald could not commit to the time it is going to take to turn the ailing division around. Maybe the board should have asked that back in February when she started. Seems it’s a big job.
- Wesfarmers (WES) +1.23% not long ago Ricard Goyder denied any plans to rid the company of its coal division and assets but it seems the recent huge run in the coal price has changed his mind and the group is now actively considering new options and potential sales of up to $2bn in assets. Early days and nothing firm as yet.
- Commonwealth Bank (CBA) +0.60% has been fined $200,000 for allowing the relative of a dead client to trade shares on their Commsec account. The failure to lock the account despite being told of the death shows a problem in handling deceased estates.
- Wage growth has hit a new low of a mere 1.9%
- The seasonally adjusted Wage Price Index (WPI) rose 0.4% in the September quarter 2016, according to the Australian Bureau of Statistics (ABS). Through the year to September quarter 2016 the WPI rose 1.9%, a new low for the series.
- Seasonally adjusted, private sector wages grew 0.4% and public sector wages grew 0.6% in the September quarter 2016. Through the year private sector wages continue to grow at a slower pace than the public sector, 1.9% compared to 2.3%.
- Japan’s Topix index rallied to a nine-month high. The Topix Banks Index has jumped more than 20 percent in five days, the steepest surge since 2008.
EUROPE AND THE US
- The Atlanta Fed’s wage growth tracker indicates that the median American worker saw her pay rise by 3.9% year-over-year in October, the fastest rate of growth since November 2008.
- Google has committed to a GBP 1bn investment in the UK.
- Russian Economy minister Ulyukayev has been charged with taking a US$2bm bribe. He is the highest ranked official held since the 1991 collapse of the USSR.
- Snapchat, has filed confidentially for an initial public offering. The company is targeting a valuation of about $20bn to $25bn in a listing that could come as early as March
- The honeymoon may be starting to wane somewhat for Trump as he looks to be installing close family and long term supporters into his new administration. Trump was elected to drain the swamp. Apparently to do so may prove a little smelly. More than some thought perhaps.
- Ted Cruz being considered for Attorney General.
To the Fed: One and done in 2016?
Looks a certainty. Have been so many this year. Brexit. Trump. Leicester City.
He replied, “No, there is a whole series of Fairy Tales that begin with ‘If Elected I promise…'”