ASX 200 kicks on to another new high up 30 points to 5644. Four straight days of gains. Banks driving gains as expiry day helps sentiment. Recent dividend cheques being put to work. Asian markets down 0.37% and China down 0.33%. AUD at 72.43c and US Futures down 32 points.
STOCKS AND SECTORS
- Resources mixed as BHP -0.12%, RIO -0.05% and Fortescue Metals (FMG) +1.51%. Base metal stocks fared less well, Independence Group (IGO) -1.43%, Iluka Resources (ILU) -0.56%, Metals Ex (MLX) unchanged and Oz Minerals (OZL) -1.12%.
- Energy stocks mixed as Santos (STO) -1.26% continues to come under pressure as the SPP weighs. Caltex (CTX) -1.17% after the deal this morning in NZ. Woodside (WPL) +1.16% as was Oil Search (OSH) +0.73% as crude rose in Asian trade.
- Gold continues to be volatile to say the least. Dacian Gold (DCN) -5.88%, St Barbara (SBM) -1.93% and Perseus Mining (PRU) -3.17% all reversing recent gains. Traders only with strong stomachs should apply.
- Industrials improving in thin trade. Transurban (TCL) +1.83%, CIMIC (CIM) +2.08%, Brambles (BXB) +0.57% and Austal (ASB) +0.87%. Consumer stocks were mixed JB Hi Fi (JBH) -0.71%, Bapcor (BAP) -1.03%, Harvey Norman (HVN) -0.39% and Billabong (BBG) -0.39%. Staples enjoying the Xmas egg nog, Woolworths (WOW) +1.52% certainly done my bit in Dan Murphy’s, Wesfarmers (WES) +0.81%
- Healthcare mixed with Estia Health (EHE) -5.32% a casualty again and CSL -0.62% though Cochlear (COH) +1.34% and Mayne Pharma (MYX) +1.10%. Capitol Health (CAJ) -10.71% couldn’t hold on to recent gains.
- IT and Telcos finally some good news. TPG (TPM) +3.85%, Vocus (VOC) +3.45% and even Telstra (TLS) +0.80%. IT stocks had a great day with Codan (CDA) +10.44%, iSentia Group (ISD) +1.82% and Netcomm Wireless (NTC)+2.94% all finding window dressers happy to push against the string.
- Banks and financials a big green blob today as the bank steam roller rolls into Xmas. Commonwealth Bank (CBA) +0.73%, ANZ Bank (ANZ) +1.39% and Macquarie Group (MQG) +1.07%. The Big Bank Basket hit $176.90 today. Elsewhere peripheral financials and wealth managers fared sub optimally. BT Investment (BTT) -1.51% still smarting from the recent downgrade and OFX Group (OFX) -1.79% together with Flexigroup (FXL) -2.65%.
- Speculative stock of the day: Robo 3D (RBO) +30.66% following the listing today of the 3D printing company. The company raised $6m at 10c and sells its products through Amazon.
- PMP -11.18% after the ACCC has expressed concerns with the proposed merger with IPMG. The ACCC believes the merger might substantially lessen competition in supply of heatset web offset printing, the main method for printing catalogues and magazines. PMP’s $120 million all-scrip acquisition of IPMG would create $112m EBITDA after the deal goes though.
- Caltex (CTX) -1.17% has paid $324m for Gull NZ a fuel importer and refiner together with a retail operation. The acquisition will deliver the Caltex some 5% of the Kiwi market, including a fuel import terminal in the North Island and 77 retail outlets.
- Oz Minerals (OZL) -1.12% have signed a new Heads of Agreement to target wider Carrapateena copper and gold targets with Red Tiger Resources.
- A busy end to the year for the boys at the Vampire Kangaroo. Macquarie Group (MQG) -% has struck a £1.6 billion (US$2.7 billion) deal with Denmark’s DONG Energy to buy half of a huge offshore wind farm in the UK, in a scaling-up of its overseas renewable energy Macquarie’s European Infrastructure Fund 5 and Macquarie Capital each take 25% of Race Bank, a 573 megawatt wind farm being built off the North Norfolk coast. Still here copal is good.
- Seven West Media (SWM) +0.63% will commission a second independent investigation into former employee Amber Harrison in the wake of a sexual relationshipwith its chief executive Tim Worner. Still seems amazing the CEO has a job heading into Xmas. He must be good.
- The West Australian government upgraded its iron ore price forecasts in its mid-year review released today but the additional $3.7 billion in mining royalties over the next four year is offset by a $1.9bn drop in tax revenue and a $1.6bn cut in GST payments. WA has increased its iron ore price forecast for this fiscal year from $US47.70 per tonne to $US64.3 per tonne and lifted the price to $US59.10 per tonne in 2017-18, up from $$US49.2 per tonne.
- New Zealand, the mouse that roared. GDP rose 1.1%, above economists’ forecast of a gain of 0.9%, putting it among the rich world’s fastest growing developed nations. Australia’s GDP shrunk 0.5% in the third quarter. It was the fifth straight quarter of growth at 0.7% or more. The annual pace was a rapid 3.5%, fuelled in part by super-strong population growth of 2.1%.
AMP Capital’s head of dynamic asset allocation unveiled his views on 2017:
- A synchronised and broadening global recovery with a two-and-a-half-year high in global manufacturing breadth.
- A six-and-a-half-year high in the global forward earnings breadth. Among the All Country World Index markets, 98% have positive year-ahead earnings estimates.
- A break in deflationary downward spiral
- Euro area input price pressures rising at the fastest pace in over five years.
Japan’s cabinet approved a record defence budget of just over 5 trillion yen (US$42.5 billion) for the year starting April. The fifth straight rise in annual military spending as tension with China increases. Japan is also increasing the budget for its coast guard as China steps up its presence around East China Sea islands known as Senkaku in Japan and Diaoyu in China.
EUROPE AND US
- Expect more news from Italy on the upcoming bank bailout with Monte dei Paschi the focus as it tries to recapitalise before Xmas. Private investoirs have walked leaving the government to bail out the world’s oldest bank
- Meanwhile in a land far, far away, US chief executives and other senior corporate insiders are selling stock at a furious rate with the insider selling heaviest in the three sectors – financials, industrials and energy.
- UK companies are heading into Xmas barred up and bullish as eth Confederation of British Industry (CBI) has said a strong performance in manufacturing is helping output levels. The overall output measure was at 17 this month, up from 5 in July, just after the European Union referendum and the best in two years.
- In the UK, the Chancellor has had a nice Xmas present with news that the public sector borrowing fell to its lowest level since the GFC. The budget deficit, which measures the amount the Treasury must borrow to plug the gap between revenues and expenditure, is £59.5bn so far this year. Public sector net borrowing, excluding public sector banks, stood at £12.6bn in November
- Goldman Sachs is set to pay US$120m to settle its rate-rigging allegations.
- Johnson and Johnson are back in exclusive talks with Actelion a month after talks broke down. After all the mergers and deals in 2016, there will soon be only one drug company left. Actelion is a rare disease drug maker and worth around US$30bn.
Market closes at 2.30pm tomorrow.
Now I know nobody will read this tomorrow as the gun goes off for Xmas holidays so I will say it now.
Have a great Xmas and hope that I have helped in 2016. I look forward to a new year much as I did on the train with the gorilla. Some concerns but they may be behind me.
Stay safe on the roads this Xmas. Appreciate the ones you love and even the ones you don’t .
Thank you for reading the daily ramblings of an old market man once again and see you in 2017.
Will be a report tomorrow but no one will care. Only sad people with no family or friends.
Maybe Malcolm should try this.