Yo!

The gorilla is a Telstra shareholder!

ASX 200 almost skips a beat to close up 5 at 5934 despite Telstra pummelled after TPG Spectrum buy. Banks once again the saviours with miners under pressure as iron ore falls in China. Asian markets sour with stronger yen as Japan falls 1.27% and China down 0.13%. AUD 75c and US Futures down 17 points.

STOCKS AND SECTORS

  • Miners slipped a little today as BHP -0.35% continued to defend its strategy. RIO -0.23% and Fortescue Metals (FMG) -1.83% after resolutely breaking the 600c support. Iron ore futures in China were down 4% with falls in coking coal and steel. Base metals stocks also weaker with Independence Group (IGO) -1.40% and South32(S32) -0.67%.
  • Gold miners a bright spot though on bullion moves, Northern Star (NST) +2.25%, Evolution Mining (EVN) +1.71% and Saracen Minerals (SAR) +5.34% doing particularly well.
  • Energy stocks showed some very modest gains as some profit taking crept in. Woodside (WPL) +0.27%, Oil Search (OSH) +0.80% and Origin Energy (ORG) +0.80%. Santos (STO) -0.78% underwhelmed as usual.
  • Industrials saw some gains for consumer stocks in the staples Wesfarmers (WES) +0.85% and Woolworths (WOW) +0.68% together with Coca Cola (CCL) +0.75%, that’s a staple, right? Retailers also did ok with Harvey Norman (HVN) +1.39% JB Hi Fi (JBH) +0.48% and Flight Centre (FLT) +1.04%. Good day for ARB Corp (ARB) +1.94% too though gaming stocks missed out on the enthusiasm Tabcorp (TAH) -1.02% and Aristocrat Leisure (ALL) -0.57%
  • Healthcare mixed as CSL -0.59% fell and Mesoblast (MSB) -1.69% came in for some profit taking. Ramsay Health Care (RHC) +0.80% and Sonic Healthcare (SHL) +0.65% in the positive.
  • IT and Telcos was where the action was as the TPG (TPM) capital raising set the cat amongst the pigeons. Telstra (TLS) -7.46% was the biggest casualty as retail investors scrambled to make sense of a new kid on the mobile block. The fall today accounted for 13 index points. Vocus Group (VOC) -5.60% not wanting to miss out on all the fun joined in yet again although perversely Hutchison (HTA) +14.86%, the people behind Vodafone rose. Riddle me that one Batman? Some selling too in IT stocks as Nextdc (NXT) -unchanged, MYOB (MYO) -0.56%, Computershare (CPU) -1.56% and Appen Limited (APX) -1.50%.
  • Banks and financials somewhat mixed with the Big Bank Basket once again pushing ahead to $187. Will it never cease. The insurers though fell QBE Insurance (QBE) -1.53% and Suncorp (SUN) -0.07%. Wealth advisers took a day off today with Platinum Asset (PTM) -1.99%, Macquarie Group MQG) -0.81% and Magellan Financial (MFG)-1.92%
  • Speculative stock of the day: Top Betta (TBH) +45.45% after its global tote business secured deal with UK racing and greyhound racing and the distribution rights to 28,000 greyhound events annually.

CORPORATE NEWS

  • TPG Telecom (TPM) has paid $1.26bn for 700MHz spectrum and will spend another $600m to build Australia’s fourth mobile network. The company will raise $400m in an entitlement issue of 1:11.13 shares at 525c. TPG paid a world record price of $2.75 per MHz per population. This eclipses the $2.46 per MHz per population paid in the Netherlands in 2014. Big price big plans.
  • Macquarie Group (MQG) -0.81% and Link Administration (LNK) -unchanged have missed out on buying the NSW Lands registry business with Hastings Funds Management paying $2.6bn. The winning consortium is 80% owned by Hastings and other institutions and 20% by RBS London.
  • BHP -0.35% has once again dismissed the proposal from the US hedge fund saying the significant costs outweigh the benefit. “The (dual-listed structure) is not a restraint to our business,” BHP chief financial officer Peter Beaven said. “It provides two important acquisition currencies in addition to cash.”
  • Flight Centre (FLT) +1.04% today announced a move into South America with the purchase of 24.1% of Argentinian travel business Bibam. The move is aimed at strengthening the company’s e-commerce capabilities.
  • CIMIC (CIM) +0.84% has continued its run of winning contracts with another $108m contract in India coupled with a Junee prison upgrade worth $134m and a NZ schools project.
  • CSL -0.59% after a US medical company lodged a complaint in Delaware alleging infringement of a patent. CSL has vigorously denied any such infringement. In August 2016, the FDA accepted a review of the inhibitor as a result of independent work at CSL Behring.

ECONOMIC NEWS

  • Melbourne Institute and Westpac Bank found consumer sentiment dipped 0.7% in April, from March when it had risen by 0.1%. That left the index at 99.0, up 4.1%on this time last year.
  • A cheery speech at the National Press Club today from Chris Richardson from Deloitte. He had some sobering words with a warning that a China crisis would wipe almost $140bn from Australia’s economy, send unemployment up, cut house prices by 9%, and destroy almost $1 trillion of national wealth. Deloitte estimates that house prices are now about 30% overvalued when compared to national income, the widest gap in its data since the early 1980s.

ASIAN NEWS

  • Japanese stocks have suffered heavy losses in recent days on a strengthening yen as a safe haven currency against a backdrop of increasing tensions in the region. Lowest level this year for equities. BOJ head Kuroda said they will continue to target 2$% inflation and recent asset purchases are not causing any problems.
  • In China Producer prices rose 7.6% over the year through March, down from 7.8% in February. Consumer price index rose 0.9% in March, versus 0.8% gain in February, the National Bureau of Statistics said.

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  • A relatively big decline in food prices has weighed on the consumer price index with vegetables, eggs, pork and fruits all posting declines.

EUROPE AND US

  • Trump has said the US will NOT enter the Syrian civil war but is sending an armada to North Korea.
  • Poor old Boris has to come home from the G7 meeting with his colleagues letting him down on sanctions against Russia.
  • Tesco Reports Full-Year Adjusted Operating Profit of GBP1.28bn.

And finally

Bill has worked in a pickle factory for several years.

One day he confesses to his wife that he has a terrible urge to stick his penis into the pickle slicer.

His wife suggests that he see a therapist to talk about it, but Bill vows to overcome this rash desire on his own. A few weeks later, Bill returns home absolutely ashen. His wife asks, “What’s wrong, Bill?”

“Do you remember how I told you about my tremendous urge to put my penis into the pickle slicer?”

His wife gasps, “My God, Bill, what happened?” “I got fired.” “No, Bill I mean, what happened with the pickle slicer?”

“Oh, um, she got fired, too.”

Clarence

XXX

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NT Markets

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