The Trump hump day!
ASX 200 soars 71 points to 5484 as all eight cylinders fire. International investors back with a vengeance. Miners leading the way with banks also in demand. Asian markets more muted with Japan up 0.31% and China up 0.47%. AUD nudging up to 74.33c and US futures up 13.
STOCKS AND SECTORS
- Resources were once again the powerhouse sector with BHP +2.65% just falling shy of the 2600c we forecast. Missed it by that much. RIO +2.52% and Fortescue Metals (FMG) +2.94% a new five-year high. South32 (S32) +5.88% an all-time high, were a standout again as the 300c level fast approaches. Seems some funds are throwing in the towel and just want resource exposure at any price. Good gains too for Sims Metal (SGM) +2.02% and Bluescope Steel (BSL) +1.36%. OZ Minerals (OZL) +3,67% highest since October 2012.
- Gold stocks a mixed bag really. Newcrest (NCM) +0.39%, Dacian Gold (DCN) +3.72% and Metals X (MLX) +4.86%.
- Energy stocks drawing strength and hope from the latest from OPEC. Santos (STO) +1.45%, Woodside (WPL) +1.11% even coal stocks back in favour Whitehaven (WHC) +3.19% though Yancoal (YAL) -5.13% continued to slip.
- Banks and financials joined in the party with the big bank basket pushing to $166.85 with Commonwealth Bank (CBA) +1.33% the best of the bunch. Wealth managers were also in demand unsurprisingly given the buoyant equity markets. Platinum Asset (PTM) +3.49%, Magellan Financial (MFG) +4.80% and Macquarie Group (MQG) +0.60%. Clydesdale Bank (CYB) -4.09% was a rare puddle of red today following lacklustre numbers form the UK.
- REITs too rallied with Scentre Group (SCG) +1.21% and Mirvac Group (MGR) +3.57%. Vicinity Centres (VCX) +2.89% after a block trade of 2.97m shares crossed at 279.5c this afternoon.
- Insurers in demand as bond yields rally, QBE Insurance (QBE) +1.17%, IAG +0.89% and Suncorp (SUN) +0.82%.
- Industrials back. Transurban (TCL) +3.30% announced approval for the Logan enhancement project in Queensland, Sydney Airport (SYD) +2.96% and Qube Holdings (QUB) +5.83% after AGM comments. Hard to find any red today although Vita Group (VTG) -5.65% continue to see selling pressure. Telstra (TLS) +2.04% tried hard as did Vocus Comms (VOC) +3.05% and TPG (TPM) +1.12%.
- Consumer stocks up with Wesfarmers (WES) +1.02% and Woolworths (WOW) +0.60% though Myer (MYR) -0.79%. A2Milk (A2M) +6.16% and Bellamy’s (BAL) +5.77% finding friends after the update yesterday. AP Eagers (APE) +3.42% also in demand after forecasting a record financial result in the range of $135m-140m. The sixth straight record result in a row.
- Healthcare stocks remain under pressure with results from Fisher and Paykell (FPH) 6.72-% not helping sentiment. Resmed (RMD) -2.37% too suffering as OSA makers lose their lustre.
- Speculative stock of the day: Greenpower Energy (GPP) +46.15%5 after announcing title and exclusivity over the Morabishi project had now been secured. In Guyana exploring for lithium and tantalum.
- Programmed Maintenance (PRG) +8.07% said the acquisition of Skilled in October last year had helped it lift net profit to $3.67 million in first six months of 2016/17. Revenue has soared 89% to $1.3bn due to the acquisition of Skilled.
- Netcomm (NTC) +23.98% after signing a deal with NBN Co to supply DPU for the fibre to the curb project. AGM commentary also helped.
- Webjet (WEB) +9.74% following the AGM presentation. The company guided to EBITDA of $78m up more than 60% on pcp. NPAT up 75% on pcp for the continuing business. Looks like these guys are the big winners of the air fare wars at the moment. Webjet’s bookings growth continued to outperform the market “by more than four times with strong growth coming through both domestic and international bookings”.
- Galaxy Resources (GXY) +6.76% following a presentation to the Swiss Mining Institute.
- Australian Agriculture (AAC) -2.58% announced a net profit of $47.9m with operating EBITDA up %2.4m top $13.9m.
- Estia Health (EHE) +5.94% have a new CEO confirmed and have reaffirmed earning s guidance. Estia said it’s expecting underlying EBITDA for FY2017 to come in between $86 million and $90 million.
The volume of construction work in the September quarter was down by 4.9% from the June quarter, its largest drop in about 16 years, and down 11.1% from a year earlier. Economists had expected a 1.6% quarterly drop.
- More parents are guaranteeing their children’s home loans to help them enter the property market.
- Figures from NAB and Westpac suggest loans guaranteed by family members are growing more quickly than the broader market. NAB said that 8% of first home buyers taking out new loans now had the backing of a family member, up from 4.8% in 2010 and 6.7% last year.
- ME Bank is the first lender to lift variable mortgage rates, while fixed rates continue to rise. Rises to variable rates by up to 10bps, the first hike in a variable rate in the latest round of increases. The bank’s fixed rates are rising by up to 15bps.
- Chinese iron ore futuresshot up 9% trade limit as steel prices extended gains amid planned mill closures in the country’s top producing city as part of efforts to fight pollution. The most-traded iron ore for January delivery on the Dalian Commodity Exchange rallied as much as 9% to hit the exchange-set ceiling of 616.50 yuan ($US89) a tonne.
- The Dalai Lama has said he has no worries about the Trump election win. He expects the businessman will align his policies with global realities.
EUROPE AND THE US
Today sees the UK Chancellor hand down his autumn budget statement.
Among the measures to be announced are:
- Reducing the rate at which benefits are withdrawn from people when they start work
- Banning upfront fees imposed by lettings agents in England
- Increasing the National Living Wage to £7.50 an hour from April 2017
- £1.4bn aimed at delivering 40,000 new affordable homes in England.
And finally….for my mate Tim….
A guy had planned a fishing trip to his favorite fishing spot off Sydney Heads.
He packed and began the trip out of the harbour.
He motored to his favourite Game fishing spot, and began fishing.
In no time, he caught the biggest Marlin he’d ever caught.
He cast out again, and was delighted to catch an even larger one.
Every cast, he caught a trophy fish.
Then his mobile phone rang; it was the hospital telling him his wife had been admitted to the emergency room.
She may die, they told him.
The fisherman is worried, but he wants to catch the world record Marlin, so he decides to have just a few more casts.
He pulls in three more really huge fish, but his conscience begins to get the better of him, so he reluctantly pulls anchor and motors back to his car to go to the hospital.
Running into the emergency room, he meets up with a stern-looking doctor.
The doctor sees the man dressed for fishing and scolds the husband: “Your wife has been at death’s door for hours now. You kept fishing after you were called, didn’t you? You ought to be ashamed!”
The fisherman sobbed it was true.
“Well,” said the doc, “I hope you had a good time; your wife will survive, but your fishing days are over…
She will require constant care from now on… 24 hours per day. You will have to do everything for her.”
The fisherman sobbed, “Oh God, I didn’t think it was that bad, I feel terrible!!!!”
The doc grinned and nudged the fisherman with his elbow…
”Just kidding, buddy… she’s dead. How many did you catch?”