End of Day

Malcolm now in Trump’s sights!

Donald is on the phone? Do you want to take it?

Feel free to send your captions please?

ASX 200 slipped slightly after a positive start with the ASX down 8 points to 5645 as Industrials and Banks weigh. Resources stay strong despite a rampaging AUD on better than expect trade numbers. AUD up to 76.40c with US futures down 34. Japanese market dropped 0.85% and Hong Kong down 0.64%

STOCKS AND SECTORS

• Miners led from the start only to burn out and fade away as the day went on. A higher AUD did nothing for the bulls and some profit taking crept in. BHP -0.15%, RIO +0.22% and Fortescue Metals (FMG) -0.73%. Bluescope Steel (BSL) -1.17%
• Energy stocks tried hard but no commitment. Coal stocks eased with Whitehaven Coal (WHC) -3.09% and Paladin Energy (PDN) -12.00%. Woodside (WPL) +0.66% remain firm but Santos (STO) -1.00% continue to weaken as SPP weighs perhaps. Maybe the issues surrounding the coalition energy policy with clean coal and lack of gas have hurt sentiment for the sector.
• Golds mainly positive again but Oceangold Corp (OGC) -15.60% had a shocker following news from the Philippine authorities to suspend operations at its Didipio operation on declining agricultural production. No official word yet but it is reminiscent of the issues Kingsgate (KCN) +1.75% had in Thailand. The mine is one of 23 mines listed by the government for closure. Elsewhere Evolution Mining (EVN) +1.84%, Newcrest (NCM) +2.17% and Resolute Mining (RSG) +5.46%. In base metals, Western Areas (WSA) +10.89% rallied hard on the nickel price rise in the last two days and the moves in the Philippines.
• Banks and financials down again. The Big Bank Basket (BBB) barely changed at $173.80 with Bank of Queensland (BOQ) -1.43% catching the disease. In wealth managers Macquarie Group (MQG) -0.85%, Henderson Group (HGG) -1.14%, though K2 Asset Managers (KAM) +6.67 did manage a bounce.
• REITs not nice today. Scentre Group (SCG)-1.13%, Westfield (WFD) -0.68% and Goodman Group (GMG) -0.87% the big losers.
• Industrials on the nose again. Transport and infrastructure stocks casualties today with QANTAS (QAN) -1.20%, Aurizon Holdings (AZJ) -0.99% and Transurban Group (TCL) -0.58% together with Sydney Airport (SYD) -0.68%. Gaming stocks took their cue from Tatts Group (TTS) -2.33% and Tabcoprp (TAH) -5.26% following the results.
• Healthcare back in casualty today with Ansell (ANN) -3.03% failing to bounce, Resmed (RMD) -1.13% and Pro Medicus (PME) -3.78%
• IT and telcos not so good again. High PE’s, High disappointment is the mantra GBST (GBT) -5.00% followed yesterday’s drubbing with another loss. Wisetech Global (WTC) -0.38% and Aconex (ACX) -2.67% feeling unloved with Charlie Aitken’s stock of the year Link Admin (LNK) -1.56%. Telstra (TLS) -0.79% suffered an outage again today with a fire at the Chatswood exchange. Treasury Wines Estates (TWE) -2.18% slipped after reports of a large US acquisition with analysts heading to the Napa Valley in March to soften them up.
• Speculative stock of the day: AVZ Minerals (AVZ) +68.42% after announcing the acquisition of a 60% interest in the historic Manono Mine in the Democratic Republic of the Congo. The project is potentially one of the world’s largest lithium deposits. Huge volume today of over 300m shares. Hartley’s are placing 250m at 2c to raise $5m.

CORPORATE NEWS

• Tabcorp (TAH) -5.26% Statutory net profit fell 28.1% to $58.9m after $43.8m worth of significant items, including $20 million worth of legal costs related to “dirty money” claims. Tabcorp also revealed it had spent $17.9m on its UK start-up SunBet, NPAT but before significant items for the rose 5.3% to $102.7m from $97.5m in line with consensus.
• Downer EDI (DOW) +13.12% results better than forecast with a 8.5% increase in net profits to $78.2m. Downer has also lifted its full year net profits guidance by 7% to $175m from $163 million after winning more than $20bn in new contracts in the first half of 2017

ECONOMIC NEWS

• The surplus jumped in December to $3.5bn from $2.04bn in November, exceeding expectations of a surplus of $2 billion in the month. The surplus is the largest on record and reflects harvesting the fruits of the resource investment boom of the past 20 years.

• New housing approvals slipped to their weakest monthly total in more than two years in December.

• New dwellings given approval slipped 1.2% to a seasonally adjusted 17,327 in the last calendar month of the year, the lowest since the 16,158 approvals made in September 2014.

 

BOND CORNER

ASIAN NEWS

• Asian markets are still closed in places for the Lunar New Year but Hong Kong and Japan eased on the back of Trump inspired uncertainty on protectionism and trade policies. Yen rose on safe haven buying.

EUROPE AND US

• Nice graphic from AMP Capital’s Shane Oliver on the US markets post a new president.

• Facebook has been forced to pay US$ 500m to settle in its virtual reality case with ZeniMax after it betrayed the company over the Oculus Rift The virtual reality headset maker that FB bought in 2014 for $2bn used stolen computer code and a court has awarded ZeniMax $500m. Was lucky enough today to experience the Oculus Rift, more tomorrow.
• Good to see Donald Trump tweeting again. This time Malcolm Turnbull is his target with news that the phone call between the two leaders was a little tense to say the least. Seems the Don is ‘not happy Jan’ with the refugee deal.

• Reckitt and Mead Johnson in US$16.7bn deal talks. Mead Johnson is the world’s third biggest baby formula maker. It has 12% of the Asian market.

And finally…this is good fun…the real wedding invite!!

 

Have a great evening

Clarence

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