ASX 200 closed down 37 at 5655 as the banks drag index down for second week of losses. CSL leads again with miners sliding despite good Chinese GDP data. Asian markets modestly higher with Japan up 0.40% and China up 0.69%%. AUD stronger at 75.74c on China data, US Futures down 15.

For the week, the ASX 200 has fallen from 5721 to close right on support at 5655 down 1.1%. Banks down around 3.9% and Financials generally down 2.7%.

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STOCKS AND SECTORS

  • Banks and financials again the ugly duckling sector as the falls continue and now around 4% to the Big Bank Basket for the week closing at $173.99. Other financials caught the downdraft with across the board profit taking rife. Insurer QBE Insurance (QBE) -1.05%, Medibank Private (MPL) -1.46% and Pepper Group (PEP) -2.37%. Wealth managers slipped too with Challenger (CGF) -1.00%, Magellan Financial (MFG) -0.71% and Henderson Group (HGG) -1.51%. REITS modestly lower with Westfield Corp (WFD) -0.89%.
  • Industrials soggy again with Oroton (ORL) -13.74% and the profit warning upsetting the retail sector. Shavershop Group (SSG) +12.32% had a much better day as the Xmas period cheered slightly after the profit warning in December 2016. Sydney Airport (SYD) +2.54% did better after the traffic report and IT stocks led by Data #3 (DTL) +6.36%, NextDC (NXT) +1.82% and Megaport (MP1) +1.22%. Speedcast (SDA) +3.75% also put in a solid performance though Vocus Comms (VOC) -0.47% again.
  • Healthcare dominated once again by upgrades to CSL+2.78% though the rest of the sector bled red with Resmed (RMD) -1.54%, Sigma Pharma (SIP) -2.46%, Estia health (EHE) -2.17% and Cochlear (COH) -1.12%
  • Big miners gave back gains this week as metal prices eased. BHP -1.27%, RIO Tinto (RIO) -1.89% and Fortescue Metals (FMG) -1.60%. Sims Metal (SGM) -5.66% worried investors after the upgrade yesterday made no mention of the full year guidance. Bluescope Steel (BSL) -2.67% and Independence Group (IGO) -2.91% but not all doom and gloom with Metals Ex (MLX) +3.65% and lithium stocks Galaxy Resources (GXY) +4.17%, Pilbara Minerals (PLS) +7.69% though Orocobre (ORE) -0.22%. Nickel stocks still on the nose following moves to bring Indonesia back on line. Western Areas (WSA) -2.26%.
  • Gold stocks giving back some love. St Barbara (SBM) -1.25%, Silver Lake Resources (SLR) -3.27% and OceanaGold Corp (OGC) -2.88%.
  • Energy shares lost momentum with Santos (STO) -1.22% down after the production report as SPP weighs. Coal stocks also in the dog house as Whitehaven (WHC) -2.40%.
  • Speculative stock of the day: Mustang Resources (MUS) +92.31% after announcing the commissioning of the Mozambique plant and the delivery of two rare rubies to the US plus a commercial parcel of 6,221 carats. First revenue is set for H1-2017.

CORPORATE NEWS

  • Santos (STO) -1.22% Production report today showing debt had dropped to $3.5bn while Output in calendar 2016 reached 61.6m barrels of oil equivalent. Sales volumes jumped 31% to 84.1m boe, ahead of guidance. The oil price at which Santos generates free cash has been lowered from $US47 a barrel at the start of 2016 to $US38 a barrel.
  • Pumpkin Patch will shut its doors within weeks after receivers failed to find a buyer for the childrenswear chain. It employed around 1000 people in Australia at its 117 stores, plus close to 600 people in New Zealand across its 43 stores.
  • Oroton Group (ORL) -13.74% expects EBITDA of between $4.5m and $5m in the six months to January 28, compared to $8.9m for the prior corresponding period. CEO Mark Newman said the group’s already weak like-for-like sales did not improve during Boxing Day and the New Year.
  • Alumina (AWC) -1.64% after confirming Alcoa have done a power deal with AGL to enable the Portland Smelter to restart production.
  • According to the UBS supermarket supplier survey, Woolworths (WOW)-0.08% won Xmas. UBS interviewed 45 ‘fast-moving’ consumer goods industry players and found Woolworths had lifted its overall score on a scale of 0 to 10, by 0.6 points to 6.2 out of 10, and closed the gap to Coles by 0.9 points.

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ECONOMIC NEWS

  • House sales rose 5.1% as every mainland state except NSW showed an increase, while unit sales jumped 9.3%, the Housing Industry Association’s latest monthly report showed.
  • CPI next week.

BOND CORNER

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ASIAN NEWS

  • Chinese GDP grew at an annual pace of 6.8% in the fourth quarter, slightly more than expected, supported by higher government spending and record bank lending. The economy expanded 6.7% cent in 2016, the National Bureau of Statistics said on Friday, roughly in the middle of the government’s 6.5-7% growth target but still the slowest pace in 26 years.

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  • Industrial production grew 6.1% in December, from a year before, while retail sales grew a strong 10.9%.
  • Fixed-asset investment rose 8.1% in 2016, less than expected and the slowest annual pace since 1999.

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  • Alibaba to sponsor next 6 Olympic Games

EUROPE AND US

  • Philip Hammond the UK Chancellor has vowed to make the UK as competitive as possible on the world stage, describing the challenge as “an existential necessity”. He said that to do so the UK must remain “one of the most open economies in the world”
  • U.S. Treasury Secretary nominee Steven Mnuchin said during his Senate confirmation hearing he’s willing to label China as a currency manipulator ‘if warranted’. The little Mnuchin wants a strong dollar. His boss wants a weaker dollar. Fails to mention $100m in assets too.
  • What’s for Trump dinner? First course of Maine lobster and Gulf prawns in a saffron sauce and peanut crumble, Angus beef from Virginia with Idaho potatoes and a dark chocolate sauce, and a chocolate soufflé with cherry vanilla ice cream.
  • “I look forward to tomorrow. We’re gonna see something that’s so amazing.” Donald Trump.

And finally, maybe we could do with some light relief.

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Trump’s new press secretary at first briefing. Maybe he should check twitter.

And finally……………..

An old Arab lived close to New York City for more than 40 years.

He would have loved to plant potatoes in his garden, but he is alone, old and weak. His son is in college in Paris, so the old man sends him an e-mail.

He explains the problem: “Beloved son, I am very sad, because I can’t plant potatoes in my garden. I am sure, if only you were here, you would help and dig up the garden for me. I love you, Your Father.”

The following day, the old man receives a response e-mail from his son:

“Beloved Father, please don’t touch the garden. It’s there that I have hidden ‘the THING’. I love you, too, Ahmed”

At 4pm the US Army, The Marines, the FBI, the CIA and the Rangers visit the house of the old man, take the whole garden apart, search every inch, but can’t find anything.

Disappointed they leave the house. A day later, the old man receives another e-mail from his son.

“Beloved Father, I hope the garden is dug up by now and you can plant your potatoes. That’s all I could do for you from here. I love you, Ahmed.”

We are not in Kansas anymore. And definitely,definitely not in Camelot.

Image result for camelot kennedy

Clarence

XXX

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NT Markets

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