ASX 200 rally fades as industrials and miners weigh on a positive banking sector. ASX 200 down 6 points to 5617 after touching 5659 early. Asian markets better, Chinese equities up 0.31%, Japan up a measly 0.16% AUD nudging 77c at 76.68c with US Futures down 1.40 points.

Just another manic Monday. Optimism and buyers seem to evaporate as the New England Patriots staged their comeback to win Super Bowl.

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STOCKS AND SECTORS

  • Banks the standouts today as US banks rallied hard leaving our big four to play Patriot football. Big catch up. National Australia Bank (NAB) +0.76% results helped the sector too but nothing very exciting except a blow out in costs. The Big Bank Basket jumped to $173.60. Other financials were becalmed as Macquarie Group (MQG) +0.51% though other wealth managers slipped slightly. IOOF Holdings (IFL) -0.90% and Platinum Asset Management (PTM) -0.40%. Insurers trod water.
  • Industrials saw red after some early promising signs. Consumer discretionary leader Domino’s Pizza (DMP) -4.75% together with Bapcor (BAP) -2.66% and ARB Corp (ARB) -1.99%. Big ticket industrials also eased with Brambles (BXB) -0.96%, Transurban (TCL) -0.38%, Aurizon Holdings (AZJ) -1.79% and Programmed (PRG) -4.05%. Utilities fell hard led by APA Group (APA) -2.59% and AGL Energy (AGL) -1.66%.
  • IT stocks sold off again with Carsales (CAR) -%, REA Group (REA) -0.89%, Hansen Technologies (HSN) -2.83%, Altium (ALU) -1.09% and Netcomm Wireless (NTC) -4.96%. Telcos mixed with Telstra (TLS) +0.79% the standout.
  • Some good gains today in the baby formula space with Bellamy’s (BAL) +7.48% and A2Milk (A2M) +2.22% and Freedom Foods (FNP) +2.25%.
  • Miners were early casualties on falling sentiment and metal prices. BHP -1.11%, though RIO +0.56% and Fortescue Metals (FMG) unchanged. Base metal stocks fell South32 (S32) -4.41%, Sandfire Resources (SFR) -2.94%, Oz Minerals (OZL) -1.53%.
  • Gold shares though better again with Newcrest (NCM) +2.46%. Northern Star (NST) +3.01%, Saracen Mineral (SAR) +3.49% and St Barbara (SBM) +5.60%.
  • Energy stocks mildly positive Origin Energy (ORG) +1.00% and Beach Energy (BPT) +2.00%. Losses though for Whitehaven Coal (WHC) -1.81%, Peninsula Energy (PEN) -9.40% and Senex Energy (SXY) -1.59%.
  • Speculative stock of the day: Corazon Mining (CZN) +137.50% after announcing massive sulphides at the Fraser Lake complex. Assay results to come by the end of March for the nickel-copper bearing magmatic system.

CORPORATE NEWS

  • National Australia Bank (NAB) +0.76% Cash earnings came in at $1.6bn in line with consensus. Net Interest Margins were broadly stable with bad debts 34% below consensus at $164m with charges at around 12bps. Crucially expenses rose 5%. Bank common equity tier 1 ratio was 9.5% at the end of the quarter down from 9.8%.
  • Domino’s Pizza (DMP) -4.75% after reports in the media today of underpayment of staff at some franchise operations. Somewhat reminiscent of the 7-11 issues last year.
  • Santos (STO) -0.76% slipped slightly after only raising $201m from the $500m retail SPP issue. Hardly surprising given the issue price and the share price throughout the period. The issue price is 394c for the new shares being a 2% discount on the VWAP over the 24th to 31st
  • Senetas Corp (SEN) -13.04% following a company trading update with a revised down ward number of $1.25m to $1.3m. Sales in eth 100G encryptor are expected to commence very late in 2017.
  • January iron ore shipments to China from Port Hedland terminal, used by BHP Billiton and Fortescue, fell 7.8% to 34.5m tonnes in January from 37.4m tonnes in December, port data showed.

BankWest part of CBA has increased rates on its variable investor property home loans for more than $200,000 on loan-to-value ratios of less than 80% by 20bps, to 4.54%. The comparison rate increase, which takes account of fees and charges, is 60bps.

ECONOMIC NEWS

RBA Meeting tomorrow.

  • The December retail report showed a disappointingly soft finish for monthly sales but a solid gain for real retail sales over Q4 as a whole. Department stores, clothing and household goods retailers all recorded outright price declines.

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  • ANZ job ads, however, jumped 4% in January, after slipping 2.2% in December. That’s good news for the labour market, with jobs ads seen as a forward indicator.

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  • And finally, the Melbourne Institute’s inflation gauge is showing more signs of life, with prices rising 0.6% in January, from 0.5% in December, for an annual rise of 2.1%, from 1.8%.

BOND CORNER

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ASIAN NEWS

  • Scott Morrison has ordered the sale of 15 properties illegally acquired by overseas buyers as part of the government’s crackdown on breaches of foreign investment rules.
  • Iron ore futures have lost 3.4% to 604.5 yuan ($US88), following a 3% drop on Friday.

Indonesia’s economy expanded 4.94% in the fourth quarter, below economists’ forecasts.

  • GDP rose 4.94% in the fourth quarter from a year earlier; the median estimate of economists was for 5%, the statistics bureau said in Jakarta on Monday
  • The economy grew 5.02% in 2016, compared with 4.8% in 2015; economists estimated growth of 5.02% for last year

EUROPE AND US

  • Super Bowl 51 won by the New England Patriots. Not good news for the Dow and US markets this year. First Super Bowl to go to overtime. Biggest comeback ever.
  • Bunnings owned by Wesfarmers which bought Homebase for £340m last year, has scrapped zero hour contracts for hundreds of its British shop workers. This will cost the company more but it is keen to build a strong culture and motivated
  • The April 23rd Election in France is looking interesting given the rise of the French Trump equivalent Marine Le Pen. Globalisation and nationalism are her two main policies. Plus a referendum on the EU.

And finally….

 

A nice, calm and respectable lady went into the pharmacy, right up to the pharmacist, looked straight into his eyes, and said,

“I would like to buy some cyanide.”

The pharmacist asked, “Why in the world do you need cyanide?”

The lady replied, “I need it to poison my husband.”

The pharmacists eyes got big and he exclaimed, “Lord have mercy! I can’t give you cyanide to kill your husband!

That’s against the law! I’ll lose my license! They’ll throw both of us in jail! All kinds of bad things will happen. Absolutely not! You CANNOT have any cyanide!”

The lady reached into her purse and pulled out a picture of her husband in bed with the pharmacist’s wife.

The pharmacist looked at the picture and replied, “Well now. That’s different. You didn’t tell me you had a prescription.”

 

Clarence

XXXX

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NT Markets

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