ASX 200 up 7 points at 5816 as the market holds despite the weight of disappointment with corporate results with Telstra (TLS) hurting sentiment. Banks, healthcare and materials shrug off Telstra and consumer stocks. Jobless numbers no real help. Asian markets mixed with Japan down 0.51% and China up 0.27%. AUD pushes through 77c to 77.11c and US Futures down 11.

STOCKS AND SECTORS

  • Big Miners trying hard with BHP +1.51%, RIO +1.27% and Fortescue Metals (FMG) +1.00%. Atlas Iron (AGO) +4.17% and Mount Gibson (MGX) +3.09% and BC Iron (BCI) +1.79%. BlueScope (BSL) +0.16% and Alumina (AWC) +1.01% and Sims Metal (SGM) +4.20%.
  • Base metals mixed with South32 (S32) -1.87% after results as Independence Group (IGO) +2.08%, Sandfire Resources (SFR) +0.74% and Metals X (MLX) +0.58%. Both MLX and Westgold Resources (WGX) -2.72% both attracting heavy volume as a large shareholder APAC resources reduced its stake selling 22m MLX at 85c and 11m WGX at 250c.
  • Gold miners mixed as Ramelius Resources (RMS) +5.00%, Silver Lake (SLR) +3.52% with Dacian Gold (DCN) -2.17% and Alacer Gold Corp (AQG) -1.68%
  • Energy mixed with Whitehaven Coal (WHC) +5.76% after moves to cut production in China with Yancoal (YAL) -9.41% on thin volume as we await financing for the RIO coal purchase.
  • Banks and financials still in the limelight as we await ANZ +0.77%. Commonwealth Bank (CBA) +0.65% kicked again with the Big Bank Basket up to $180.77 Both Challenger (CGF) +3.12% and Macquarie Group (MQG) +0.66% standing out in a lacklustre wealth management sector. Insurers mildly positive on thought s of higher rates.
  • Industrials going nowhere really but down. Ausnet (AST) -1.80%, Duet Group (DUE) -1.06%, Auckland International (AIA) -1.56% and Transurban (TCL) -0.46%
  • Consumer stocks struggled although Domino’s Pizza (DMP) +7.73% bounced from its woeful day yesterday. Wesfarmers (WES) -1.11% and Woolworths (WOW) -0.00%. JB Hi-Fi (JBH) -1.33%, AP Eagers (APE) -2.53% and Vita Group (VTG) -2.64%,
  • IT and telcos not much fun again today. Telstra results (TLS) -6.55% infected the sector with Vocus Comm (VOC) -4.65% and TPG Telecom (TPM) -5.22% and Spark New Zealand (SPK) -4.62%. In IT, Aconex (ACX) -2.08% unravelling again with NextDc (NXT) -3.12% and Megaport (MP1) -1.80%
  • Healthcare had some bright spots in CSL +3.73% and Cochlear (COH) +4.49% as cream rises and brokers upgrade. Red though in Primary Healthcare (PRY) -1.47% and Sonic Healthcare (SHL) -1.77% and 1300Frowns (ONT) -3.11%.
  • Speculative stock of the day: Venturex Resources (VXR) +42.86% after announcing Sulphur Springs zinc project is a robust development opportunity. Base case 1Mtpa delivering 32Ktpa of zinc and 12ktpa copper over 12 years.

CORPORATE NEWS

  • Telstra (TLS) -6.55% had a shocker today disappointing the market with a 14.4% fall in net profits to only $1.791bn. Dividend is unchanged at 15.5c but the outlook guidance was steered towards the bottom of the range.
  • Sydney Airport (SYD) -2.09% after a 13.4% rise in net profits to $320.9m on revenue of $1.36bn. EBITDA up 10.3% to $1.106bn and a 16c final dividend.
  • Event Hospitality (EVT) -11.25% reported net profits after tax of $59.4 m, down 22.6% on a year ago. Total revenue for the period edged 0.8% lower to $656.1 m, while profit before income tax expense dropped 20.8% to $84.05m.
  • Centuria Industrial REIT (CIP) +4.62% has announced a surge in first-half statutory net profit to $31.4 m, up from $1.6m a year ago. Earnings dipped to $22.9m from $24.9m a year ago.
  • More trouble for Ten Network (TEN) -2.78%. Seriously. The company downgraded profit numbers today with EBITDA for the half year around $10m-$15m lower than the $10.1m last year.
  • NRW Holdings (NWH) -0.64% has posted a 90% jump in net profit for the half year. Revenue rose 17.6% to $176.6m. Some of the company’s highlights for the period include raising $19.7m through an equity placement, a corporate notes issue of $70m and improving its gearing ratio to 22.4% from 39.6%.
  • Adacel Tech (ADA) +5.88% announced profit before tax for the 2017 financial year is expected to be 10% higher than a year ago, while dividends are set to be at least equal to the amount declared in 2016.
  • Magellan Financial Group (MFG) -4.53% after a big fall in performance fees as MFG got things wrong. first-half net profit to $87m. Revenue fell by 16% to $153.5m. CEO Hamish Douglass said he was buying high growth tech stocks and bracing for a “fundamental shift” in global markets. Magellan has about $40 billion of funds under management.
  • IPH +3.00% delivered a 19.5% net profit for the half year ended December $22.1m on revenue of $93.1m, up 22.3% on the previous year. EBTIDA rose 19.8 % to $35.1m.
  • Origin Energy (ORG) -2.21% after announcing a net loss of $1.68bn after a $1.9bn write down on its LNG export venture. Total revenue rose 3% to $6.32bn
  • Tatts Group (TTS) -3.60% with net profits down 16.5% to $122.8m. EBIT fell 10.7% to $147.1m. The Australian Competition and Consumer Commission is expected to rule next week on Tabcorp’s $11bn merger move for Tatts.
  • South32 (S32) -1.87% reported a US$620m profit after tax versus a US$1.75bn loss last year. interim dividend of US3.6c
  • Star Entertainment Group (SGR) -0.40% has reported a first-half net profit after tax of $141.8m, which is up 135.2% on the previous year. Gross revenue jumped 11.1%to $1.23 billion and EBITDA surged 55.9% to $300.4m. It will pay a dividend of 7.5c.
  • Evolution Mining (EVN) -0.00% reported a record $136.7m profit with revenue rising 17% to $711.5m. The company will pay a 2c dividend.
  • Hansen Technologies (HSN) -7.88% profits rose 6.8% to $13.46m with revenue up 17.5%. The company will pay a dividend of 3c.
  • Bapcor (BAP) -2.87% with interim profit rising 44% to $27.82m from $19.3m. Revenue jumped 34% to $435.12m.
  • Slater and Gordon (SGH) -25.93% following a upgrade on funding pressures and current business. The company has confirmed it is in talks with its lenders to recapitalise the group. It added its troubled UK operations were showing signs of improvement, but the recovery was slower than expected. Revenues were also lower than expected.

ECONOMIC NEWS

  • The unemployment rate fell to 5.7% January, from 5.8%in December, according to the Australian Bureau of Statistics. The number of jobs rose by 13,500 in the month. Full-time employment fell by 44,800 jobs.

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BOND CORNER

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ASIAN NEWS

  • Maybe we should be looking at what is happening not just what is being said. China’s holdings of U.S. Treasuries declined by the most on record last year. A monthly Treasury Department report released in Washington on Wednesday showed China held $1.06 trillion in U.S. government bonds, notes and bills in December, up $9.1bn from November but down $188 billion from a year earlier. It was the first monthly increase since May.

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  • China’s FX reserves fell for a seventh straight month in January to $3 trillion, to the lowest in almost six years, driven by the central bank’s intervention in foreign-exchange markets.

Malaysian GDP slows to 4.2% from 5% in 2015 but beats expectations.

  • Private consumption expenditure climbed 6.2% last quarter from a year ago
  • Public sector spending fell 4.2%
  • Exports rose 1.3%

There is a lesson here for Sydney Airport as two of the Philippines wealthiest men go head to head. All-Asia Resources & Reclamation Corp., a venture of Henry Sy’s Belle Corp. and Solar Group said it plans to spend US$20bn to build an airport and seaport at Sangley Point, south of Manila. On the other side is San Miguel and its head Ramon Ang with a rival offer of US$14bn, with absolutely no government guarantees or subsidies.

EUROPE AND US

  • Only in the US could there be an American Psychological Association’s anxiety meter. According to their latest report, Americans’ stress levels in January were worse than in August 2016. At 57%, more than half of respondents said the current political climate was a very or somewhat significant source of stress.

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  • A full two-thirds of respondents to the survey said they are stressed out about the nation’s future, and while that includes 76% of Democrats, it reflects the feelings of 59% of Republicans as well.
  • Amazon Prime, which gives users access, to fast deliveries and its music and TV streaming service, brought in US$6.4bn in 2016.By comparison, the company made US$91.4bn from retail products and US$12.2bn from Amazon Web Services.

And finally…

men

There was a knock on the door this past Saturday morning. I opened it to find a young, well-dressed man standing there who said: “Hello sir, I’m a Jehovah’s Witness.

So I said, “Come in and sit down.”

I offered him a fresh cup of coffee and asked, “What do you want to talk about?”

He said, “Beats the shit out of me. Nobody ever let me in before.”

Have a great evening

Clarence

XXX

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NT Markets

Get a Global take on things at http://www.ntmarkets.com

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