End of Day

ASX 200 turned around a 45-point fall to close up 11 at 5338.5 as Telstra and BHP led the fightback. Jobs numbers helped too. Oversold healthcare, REITs and Utilities in favour. Asian markets a little weaker with Tokyo down 0.14% and China down 0.21%. AUD stronger on jobs number at 74.75c and US futures up 17.

STOCKS AND SECTORS

  • Resources mixed BHP +0.33% RIO +1.14% and Fortescue Metals (FMG) -0.51%. Gold shares though fading the bounce with Regis Resources (RRL) -5.72% and Resolute Mining (RSG) -5.73%. Base metals hit with profit taking as BlueScope (BSL) -2.13% , OZ Minerals (OZL) -2.77% and Sandfire (SFR) -2.20%
  • Energy stocks drifted lower on profit taking. Santos (STO) -2.71%, Karoon Gas (KAR) -5.24% and Oil Search (OSH) unchanged.
  • Banks felt a little soggy today although tried hard to hold the line. The big four around 0.5%. Late rally helped. Platinum Asset Management (PTM) -7.41% had a nasty AGM reaction today. Revenue declined and FUM down 1.2% to $25.8bn as the gloss continues to wear off.
  • Insurers weaker on US Treasuries stabilising. Suncorp (SUN) -1.25%, QBE Insurance (QBE) +0.37% and IAG Australia (IAG) -0.75%
  • REITs had a much better day after the recent bloodbath. ALE Property Group (LEP) +3.45%, Westfield (WFD) +1.41% and Goodman Group (GMG) +1.74% despite 40% of shareholders voting against the remuneration package for Mr Goodman giving him a $16.5m bonus of shares.
  • Industrials winners today with telcos led by oversold Telstra (TLS) +2.54%, Vocus Comms (VOC) +0.19% and TPG (TPM) +0.14%.
  • Utilities too had a better day with the bond yields easing. AGL +1.79%, APA Group (APA) +2.18%. Other bond proxy stocks also rose with Transurban (TCL) +2.46% and Sydney Airport (SYD) +1.68%.
  • Consumer discretionary stocks also rose Adairs (ADH) +6.02% not quite curtains it sems, Harvey Norman (HVN) +1.35%. Bapcor (BAP) +2.36%
  • Speculative stock of the day: A blast from the past with colourful copper miner Cudeco (CDU) +25.58% after securing an extension of its loan with China Minsheng Banking Corp. The company also upgraded its financials at the AGM today. The stock has been suspended since the end of September throughout the recent copper blip.

CORPORATE NEWS

  • Wesfarmers (WES) +0.90% is not only looking at selling its coal business but has also done a deal with Citi over its $880m credit card business. The ten-year deal will see Citigroup manage the business and acquire the portfolio. Coles took full control over the business when GE Capital left our shores last year.
  • BHP +0.33% nothing sinister from the AGM today. Presentation had some good slides with lots of trucks and diggers which is always impressive and CEO MacKenzie urged Trump not to turn his back on climate change. Near term priority is to reduce debt levels.
  • Telstra (TLS) +2.54% will slash costs by $1bn over the next five years and an extra $3bn will be spent on core networks over the next three years. The company has promised better shareholders returns and has revealed an internal program called Network 2020 that will modernise Telstra’s infrastructure and shut down old technology, such as the 3G mobile network. It expects to receive $8bn from the NBN in coming years.
  • Mantra (MTR) +0.31% has reaffirmed its guidance at its AGM today.
  • iSentia (ISD) -26.77% smashed today after a profit down grade with the media monitoring group telling shareholders the EBITDA for the first half would be down on previous years. Th problem is King Content which ISD bought for $48mlast year. Content marketing represented 7% of Isentia’s earnings. A new chief executive for King Content will be appointed and the division is expected to lose about $2m in the first half. Analysts downgrades to come.
  • James Hardie (JHX) +4.56% has downgraded expectations for its full-year adjusted net operating profit, saying production constraints are affecting its ability to meet US demand. JHX expects full-year adjusted net operating profit to be between $US250m and $US270m. Previous forecast were for US$256-US$285m from analysts.
  • RIO +1.14% has fired two executives linked to a payment scandal in Guinea, energy and minerals boss Alan Davies and legal affairs boss Debra Valentine. One of the executives involved has vowed to fight the dismissal
  • Domino’s Pizza (DMP) +2.41% needs to keep an eye out as Pizza Hut has sliced up Eagle Boys and is ion the process of rebranding more than 50 stores and boosting numbers to 320. Looks like Pizza wars is back. 9481 1111 will be back on TV ads again.
  • Village Roadshow (VRL) -4.88% warned at the AGM today that the fallout from the tragedy at Dreamworld is also affecting Sea World, and its other theme parks in Queensland. ‘Inconsistent trading’ was the phrase used.

ECONOMIC NEWS

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  • The unemployment rate was steady at 5.6% as 41,500 new full-time jobs were added, offset by a 31,700 drop in part-time roles. 9800 jobs added against forecasts of 20,000 jobs.

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Adding to the confusing picture in September it was the reverse: full-time employment fell by 74,300 and part-time grew 45,300.

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ASIAN NEWS

  • The Philippine economy grew at its fastest pace in three years last quarter at 7.1%. The worlds fastest growth rate.

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  • The Bank of Japan said no bids were placed at its first operations when it offered to buy bonds at a fixed rate, a tool it introduced when deciding in September it would seek to control the yield curve. Ten-year sovereign yields turned positive this week for the first time since Sept. 21.

EUROPE AND THE US

  • The IMF has told the UK Chancellor to stop the winter update (MYEFO to us) and deliver just one budget a year to ensure greater stability. The Fund said concentrating “major tax and spending decisions into a single fiscal event” held “at least” three months before the start of each fiscal year would ensure announcements were scrutinised well before being enshrined into law. The new Chancellor will make his winter statement next week. Could be a GBP100bn hole in the Brexit budget over the next five years.
  • Janet Yellen gets to speak tonight.
  • Claude Monet’s grain stack painting fetched a record $81.4 million in New York on Wednesday after a 14-minute bidding war.

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And finally………..

Three contractors are bidding to fix a broken fence at the White House. One is from Chicago, another is from Tennessee, and the third is from Minnesota. All three go with a White House official to examine the fence.
The Minnesota contractor takes out a tape measure and does some measuring, then works some figures with a pencil. “Well,” he says, “I figure the job will run about $900. $400 for materials, $400 for my crew, and $100 profit for me.”
The Tennessee contractor also does some measuring and figuring, then says, “I can do this job for $700. $300 for materials, $300 for my crew, and $100 profit for me.”
The Chicago contractor doesn’t measure or figure, but leans over to the White House official and whispers, “$2,700.”
The official, incredulous, says, “You didn’t even measure like the other guys! How did you come up with such a high figure?” The Chicago contractor whispers back, “$1000 for me, $1000 for you, and we hire the guy from Tennessee to fix the fence.” “Done!” replies the government official. And that is how the new stimulus plan will work.
And finally finally…

Not long before he became Prime Minister Bob Hawke told this joke to 700 people at a Melbourne dinner function;

The Indian PM Indira Gandhi was looking for a way to divert attention from the political and economical mess of her government and one of her staff suggested a national lottery. The idea was accepted, the lottery was organized and the whole of India bought tickets in the hope of winning one of the three mystery prizes.
The draw was done in a large stadium, watched by millions of people. First the third prize was drawn; a first class ticket around the world on Air India, the winner was pretty happy with this.

Then the second prize was drawn; a fruit cake. The winner was not happy, he complained that the third prize was better, and normally one would expect the second to be larger than the third.
The compere explains; oh, but this is a special fruit cake, it was baked by Mrs. Gandhi!
To which the winner replies; F%#*! Mrs. Gandhi! The compere; oh no, that is first prize!
The Indian High Commissioner was not impressed…..

Those were the days!

 

Clarence

XXXX

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NT Markets

Get a Global take on things at http://www.ntmarkets.com

 

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