ASX 200 closes well off the euphoric CSL high of 5720, up a mere 11 points at 5692 as banks once again weigh and unemployment numbers do little to drag investors from the Tennis. Asian markets modestly higher with Japan up 0.87% and China up 0.06%. AUD 75.20c and US Futures down 6.

STOCKS AND SECTORS

  • Banks and financials had another wishy-washy day as the Big Four Basket fell again to $175.30 although wealth managers rose ever so slightly with Platinum Asset (PTM) +1.19%, Henderson Group (HGG) +1.02% and Perpetual (PPT) +1.42%. QBE Insurance (QBE) 1.97+% bucked the trend as US rates seem to be on the rise faster than some expected and USD bounced back.
  • Miners better at the close with BHP +0.64%, Fortescue Metals (FMG)+2.46% and RIO +0.62% scraping out a gain. Base metals mixed with South32 (S32) -1.07% following the production report and Alumina (AWC) +1.39%, Oz Minerals (OZL) +1.34% and Independence Group (IGO) unchanged more on gold’s retreat than anything else. Lithium stocks got smashed with Galaxy Resources (GXY) -6.98% despite securing a US$40m debt facility.
  • Gold shares took a break today as profit takers moved back into the bullion market following Janet Yellen’s comments this morning. Newcrest (NCM) -2.17%, Evolution (EVN) -2.22% and Westgold (WGX) -3.87%.
  • Energy eased back as a combo of lower crude and the Woodside (WPL) -0.93% production report weighed on the sector. Santos (STO) -0.96% dipped slightly below the SPP price with Oil Search (ERA) -1.49% and Energy Resources (ERA) -1.49% hitting the skids following the recent impairment charges.
  • Industrials mixed at best but weaker overall. Some media stocks did well to hold up with APN News (APN) +3.46%, Seven West Media (SWM) +2.38% and REA Group (REA) +1.59%. Telcos back on the down leg again as Telstra (TLS) -0.58% and Vocus (VOC) -2.98% succumbed to profit taking after a relatively small bounce.
  • Healthcare completely dominated by the news from CSL +12.49% this morning on a large upgrade to full year profits. Not wanting to be left out Cochlear (COH) +2.27% joined in as did Nanosonics (NAN) +4.81% and Mayne Pharma (MYX) +4.07%’
  • Speculative stock of the day: Estrella resources (ESR) +30.95% following the MELP update a few days ago. Cores have been submitted for assays and drilling site preparations are underway for its lithium project.

CORPORATE NEWS

  • CSL +12.49% has upgraded its full-year profit guidance following strong sales, particularly of immunoglobulins and specialty products. After a likely first-half profit of about $US800m, CSL expects net profit for the year ending June 30 to grow by between 18% and 20% (previous 11%)on a constant currency basis.
  • South32 (S32) -1.07% revealed lower first-half production in several of its commodities but says it remains on track to achieve full-year guidance. The good news: manganese ore production rose 6% to 1.25m tonnes, zinc output jumped 38% to 24,400 tonnes, and alumina production lifted 2% to 1.32m tonnes.
  • Woodside (WPL) -0.93% flagged production will fall by as much as 11% in 2017, in line with analysts’ forecasts. The company expects annual production in 2017 to fall to 84-90m barrels of oil equivalent (mmboe) from 94.9 mmboe last year, in line with two analysts’ forecasts for a drop in output to around 87 mmboe.
  • Sims Metals (SGM) +3.28% as now management expects first-half underlying earnings before interest and tax (EBIT) to be between $75 million and $79 million. This is a big increase on previous guidance of around $63 million.
  • Carsales (CAR) -2.85% CEO Greg Roebuck is retiring from the company he co-founded two decades ago. The company’s chief operating officer Cameron McIntyre, a nine-year company veteran, will take over as chief executive on March 17.
  • Bega Cheese (BGA) +15.18% has bought back Vegemite from Kraft foods in a $460m deal moving further away from the cheese market. The acquisition will boost earnings from year one with revenue of $310m and EBITDA of $40-$45m.
  • Rio Tinto’s (RIO) -% Boyne Island aluminium smelter is slashing production worth more than $100m and up to 30 jobs as Queensland’s soaring power prices make the plant uncompetitive.

ECONOMIC NEWS

  • The economy added 13,500 new jobs in December, but the unemployment rate still ticked up to 5.8%, mainly due to a rise in the participation rate.

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BOND CORNER

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ASIAN NEWS

  • Iron ore dropped from a three-year high reached on Wednesday. The most-active iron ore on the Dalian Commodity Exchange was down 1.6% at 632 yuan ($US92) a tonne, after peaking at 666 yuan in the prior session. Rebar on the Shanghai Futures Exchange eased 1.2% to 3249 yuan per tonne, slipping further from Monday’s one-month peak of 3418 yuan.
  • Iron ore inventory at China’s ports stood at 118.15 million tonnes on January 13, the most since 2004, according to data.
  • Yes Bank has jumped 16.4% this month, making it the best-performing stock among India’s banks. It has also made a billionaire out of co-founder Rana Kapoor (maybe Karich is more appropriate). The bank is benefiting from its low bad-loan ratio and robust return on equity in an environment where its peers have a bad loan ratio at a 14-year high of 9.1%. The S&P Indian Bank index is up 5.9% this year.

EUROPE AND US

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Duloc or the next Trump Tower project?

  • US Debt ceiling is going to be an issue in March. Especially if the Don wants to borrow more money for building stuff. That is what he does best.

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  • Credit Suisse will pay a US$2.5bn civil penalty and US$2.8 billion in consumer relief, to be paid over five years after the settlement, the US Justice Department has said. As part of the settlement, the bank conceded that it sold investments containing loans that it knew were likely to fail. Seems the Obama administration is keen to wrap things up. Maybe we will see a resolution in to generic drug pricing too in the next day or so.
  • Is the new US administration kissing the Bear and poking the Dragon, as Commerce chief Wilbur Ross has called China a ‘most protectionist’ economy. Which is what they want to become.

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  • Manchester Utd knocked Real Madrid from top of football’s rich list for the first time in more than ten years with record revenue of £515.3m for the 2015-16 season. Having topped the Football Money League for 11 consecutive seasons, Real posted revenue of £463.8m to slip down to third behind Barcelona, despite winning the Champions League.
  • BAE Systems must find huge savings in producing parts for the F-35 stealth fighter on the orders of Donald Trump. The Don wants to see a 10% cost reduction from the UK supplier or else.

And finally…

“My dad has suggested that I register for a donor card.  He’s a man after my own heart.”

“I went to a pub quiz in Liverpool, had a few drinks so wasn’t much use.  Just for a laugh I wrote The Beatles or Steven Gerrard for every answer… came second.”

“Why is Henry’s wife covered in tooth marks?  Because he’s Tudor.”

“Back in the day, Instagram just meant a really efficient drug dealer.”

“I’ll tell you what’s unnatural in the eyes of God. Contact lenses.”

Apologies!!!

Clarence

XXXX

mt_tryforfree

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