End of Day
ASX 200 closes down 8 to 5351 in quiet, listless trade. Energy and gold in favour with a turnaround in banks helping lift from a 25-point early loss. Asian markets firm with Japan up 0.72% and China up 0.86%. AUD steady at 73.24c with US futures up 13.
STOCKS AND SECTORS
- Resources were a bag of Allsorts. Gold stocks very firm on a lower AUD and higher local bullion price. St Barbara (SBM) +7.24%, Northern Star (NST) +5.28% and Metals Ex (MLX) +4.87%. Others fared badly with Sims Metal (SGM) -1.71%, Bluescope Steel (BSL) -1.25% and Fortescue Metals (FMG) -1.04%. BHP +0.75% eked out modest gains as did Independence Group (IGO) +2.19% South32 (S32) unchanged and Western Areas (WSA) +2.60%. Seems there is still residual buying in resources for those funds that missed out.
- Energy stocks in focus today on hopes of a OPEC agreement. Origin Energy (ORG) +2.64%, Woodside Petroleum (WPL) +1.33% and Santos (STO) +2.83%. Karoon Gas (KAR) -15.45% had a shocker today on news of a legal issues with Brazilian assets.
- Banks in demand again as the sector rallied and pulled the ASX out of earlier losses. Westpac Bank (WBC) +0.52%. Platinum Asset Management (PTM) +6.54% had a spectacular day following a broker report naming them as a contrarian stock pick. Seemed to be a switch out of BT Investment (BTT) -6.21% into PTM. Maybe Magellan Financial (MFG) -1.97% also a target. REITS mixed as Westfield (WFD) +1.79% rallied on US hopes whilst Mirvac (MGR) -1.52% and GPT Group (GPT) -1.09%
- Industrials back in the dog house with the usual suspects all suffering selling pressure. Healthcare led down by Sonic Healthcare (SHL) -2.48%, Sigma Pharma (SIP) -6.04% and Impedimed (IPD) -7.46%. Media stocks down as were staples with Woolworths (WOW) -1.55% and Wesfarmers (WES) -1.53%. IT stocks in the dog house too with Computershare (CPU) -1.20%, CSG Limited (CSV) -5.10% and Altium (ALU) -2.89%. iSentia Group (ISD) -3.75% continue to fall as does Nextdc (NXT) -2.22% Some other casualties included Automotive Holdings (AHG) -5.67%, Adairs Limited (ADH) -4.32% and Beacon Lighting (BLX) -4.00%.
- More losses too in Chinese export story stocks with Blackmores (BKL) -1.04%, Bellamys (BAL) -1.93% and Treasury Wine (TWE) -0.38%.
- Telcos mixed with Telstra (TLS) -%, Macquarie Telecom (MAQ) 7.27-% on 1100 shares and Hutchinson Telecom (HTA) -4.94% on 10,000 shares.
- Speculative stock of the day: Red Mount Mining (RMX) +37.50% after a ASX query when the company. The company has recently entered into an exploration and earn in agreement in a lithium project in Utah and suggested this might be the reason for the unusual volume and price movement.
- Crown Resorts (CWN) -0.27% after three of its employees being detained in China were formally arrested.
- Boral (BLD) in a trading halt following a huge acquisition of US company Headwaters for around US$2.6bn. The company is also launching a $450m placement and $1.6bn rights issue to fund the deal. The 1:2.22 share issue is at 480c a 22% discount to the closing price. BLD has paid at 10 times EBITRDA but the company has delivered 20% growth over the last five years.
- IAG +1.29% has issued a $300m hybrid issue raking as Tier 1 capital. The interest rate is set at 470 to 490 bps over bank rate.
- Baby Bunting Group (BBN) +4.73% has reported a pleasing start to the new financial year with sales up 20%. The company also reaffirmed EBITDA guidance at between $21.5m and $24.5m. The company has 39 stores with another 6 to 8 set to open this year.
- Newcrest (NCM) +0.82% released its investor day presentation with a bump in production numbers from its flagship Cadia project in NSW.
- Goldman Sachs has turned positive on our economy and now suggests the next move in rates will be up. Good to see they are joining my view. The next move may be up but it will be a long way away.
- Local banks Westpac and Bankwest are seeing things in the property market very differently with Westpac is seeking to allay fears of a housing crash due to demographics and immigration whilst Bankwest is avoiding Melbourne and Brisvegas in its push for new lending and favours Sydney and Perth.
- ScoMo has said he would consider the Grattan Institute proposal that tax benefits on the Over 65s should be pulled back saving $1bn a year.
- Iron ore futures in China have dropped 2% as steel prices hit their weakest in almost three weeks. China has cracked down on speculation in the iron ore market.
Japan posted a trade surplus for a second straight month in October.
- Exports fell 10.3% in October from a year earlier (median estimate of economists predicted an 8.5% decline).
- Shipments have also dropped in every month for more than a year.
- Imports decreased 16.5% during the same period, leaving a trade surplus or deficit of 496.2 billion yen ($6.1bn).
EUROPE AND THE US
- Nicholas Sarkozy has been kicked out of the French presidential race by former PM Fillon. Sarkozy was a distant third with only 21%.
- Is uranium the next commodity to see signs of life. Some think so as China has 60 reactors being built. One analyst believes that up to 80% of the uranium market may be uncovered by 2025. Uncovered is when spot prices are so low that users have stopped locking in long term contracts, this can lead to reactors and long term users scrabbling for uranium.
- A few days ago I wrote of the ways to play the cyber security wall through an ETF ‘HACK’ +0.91% today. In a sign of the digital wall under Trump rather than a physical wall, Symantec has agreed to purchase LifeLock in a US$2.3bn deal.
SYLVIA: Hi! Wanda.
WANDA: Hi! Sylvia. How’d you die?
SYLVIA: I froze to death.
WANDA: How horrible!…
SYLVIA: It wasn’t so bad. After I quit shaking from the cold, I began to get warm & sleepy, and finally died a peaceful death. What about you?
WANDA: I died of a massive heart attack. I suspected that my husband was cheating, so I came home early to catch him in the act. But instead, I found him all by himself in the den watching TV.
SYLVIA: So, what happened?
WANDA: I was so sure there was another woman there somewhere that I started running all over the house looking I ran up into the attic and searched, and down into the basement. Then I went through every closet and checked under all the beds. I kept this up until I had looked everywhere, and finally I became so exhausted that I just keeled over with a heart attack and died.
SYLVIA: Too bad you didn’t look in the freezer — we’d both still be alive.
I was hiking once with my girlfriend. Suddenly a huge brown bear was charging at us, really mad. We must have come close to her cubs. Luckily I had my 9mm pistol with me. One shot to my girlfriend’s kneecap was all it took. I could walk away at a comfortable pace.
What do you get when you cross a rabbit and a pit bull?
Just the pit bull.