ASX 200 plays catch up to close up 40 points at 5912 as banks, insurers and consumer stocks lead the charge. Asian markets resume the rally with Japan up 0.90% and China making up ground rising 0.36%. AUD 75.22c after CPI numbers and US futures up a mere 9 points.

STOCKS AND SECTORS

  • Miners hung in with BHP +0.58%, RIO +1.14% and Fortescue Metals (FMG) +1.32%. Base metals back on the nose with South32 (S32) -unchanged, Independence Group (IGO) -3.41% and Western Areas (WSA) -0.92%. Coal stocks eased with Whitehaven Coal (WHC) -2.86% and New Hope (NHC) -1.44%.
  • Energy stocks rose slightly with Woodside (WPL) +0.53%, Caltex (CTX) +0.58% and Oil Search (OSH) +1.10%.
  • Gold miners are having a tough day today after bullion folded on the risks waning and inflationary expectations rising. Newcrest (NCM) -4.88%, Evolution Mining (EVN) -5.08% and Northern Star (NST) -6.99% some of the worst affected.
  • Banks and financials better again with gains around 1% for the big four. The Big Bank Basket closed at $187.91 as the results loom. Analysts are talking about the free kick to profits that the banks have had in their ability to raise rates out of cycle. Insurers rose with QBE Insurance (QBE) +2.14% and IAG +0.99%. Macquarie Group (MQG) +2.56% put in a stellar run on its way to $100.
  • Industrials better with builders up on US lumber tax possibly. CSR +2.85%, James Hardie (JHX) +2.07% and Boral (BLD) +1.34%. Some positives in the mining services with Seven Group (SVW)+10.77% basking in reflected glory from the Caterpillar results in the US last night. Other mining services also caught a bid with CIMIC (CIM) +0.61% and Monadelphous (MND) +2.30%.
  • IT and telcos positive with Telstra (TLS) +0.71% and Vocus Group (VOC) +0.29% also managing a small gain though Superloop (SLC) -4.25% and Speedcast (SDA) -1.60% reaffirming guidance on an investor day.
  • Healthcare doing well as Mesoblast (MSB) +6.49% continued their run and CSL +1.18% punched ahead together with Australian Pharma (API) +3.86%.
  • Speculative stock of the day: eSense (ESE) +20.00% after receiving some favourable media coverage on the ABC for its process of reverse engineering high value plants. The company has recently commenced shipments of its cannabis terpene profiles including proteins of the 5 most popular cannabis trains.

CORPORATE NEWS

  • BHP Billiton (BHP) +0.58% announced a soft quarter with Escondida and bad weather mainly to blame. The company reduced guidance on copper and met coal although both should be already factored in. However, BHP also said it was looking at selling some of its US hale acreage just a few weeks after activist shareholder Paul Singer was calling for a complete float of the US oil business. The sale process for up to 50,000 acres is well advanced apparently.
  • Ardent Leisure (AAD) +1.49% after CEO Deborah Thomas has moved sideways to a new position of Chief of Customers Officer with Simon Kelly taking over her role as CEO. The CFO has also resigned to return to the UK. The move comes merely a month after corporate raiders Ariadne announced a stake in the company.
  • A2Milk (A2M) +7.74% announced a strong start to the June half with sales for FY17 around NZ$525m above consensus of NZ$515m. Demand for infant formula had exceeded expectations.
  • Not listed anymore but it is yet another example of paying too much in a takeover as Japan Post has taken a $9bn write down on the purchase of Toll and is letting another 1700 people go. Japan Post has said the results from Toll were expected to be sharply below previous results due to slowdowns in the Australian and Chinese economies.
  • Metals X (MLX) -3.42% released the quarterly report today showing a strong balance sheet with cash at $113m and investments of $14.8m. Copper costs were $8,576all-in-cost or around $3.87 a pound. Tin production was steady with higher returns at an all-in-cost of around $8.61 a pound.

 

ECONOMIC NEWS

CPI numbers released today showed the Core inflation rate at 0.5% in line with forecasts. Headline inflation has risen above the RBA target for the first time in two years at 2.1% on energy price rises.

ASIAN NEWS

  • The MSCI Asia Pacific index has climbed to its highest level since mid-2015 at 148.78.
  • Economists have upgraded their forecasts for China’s economic growth this year and project consumer inflation will continue to moderate. Analysts cut forecasts for CPI gains, which they forecast to hold interest rates unchanged as GDP hits 6.9%

EUROPE AND US

  • Seems the relationship between Canada and the US is turning a little sour following the Trump administration move to slap Canadian lumber with a big new tax. Duties of up to 24% will now be levied leading to house price rises in the US by an average of 6% according to the industry. There are some concerns that the new tax will be broadened to include dairy products as well.
  • Media reported in the UK suggest the UK will have to contribute in the EU budget up until 2020 to be able to achieve a favourable outcome to Brexit. UK leaving will leave a EUR10bn hole in the budget.
  • Yahoo’s Marissa Mayer will receive a US$186m payday as a result of the sale of the business to Verizon. Yahoo has risen 200% since she joined in 2012 mainly as a result of the investment in Alibaba.
  • Costco will pay out US$3.1bn in a special dividend to shareholders. The special is in addition to the 50c dividend declared.

And finally….

A couple drove down a country road for several miles, not saying a word. An earlier discussion had led to an argument and neither of them wanted to concede their position. As they passed a barnyard of mules, goats and pigs, the husband asked sarcastically, “Relatives of yours?” “Yep,” the wife replied, “in-laws.”

Thomas is 32 years old and he is still single.

One day a friend asked, “Why aren’t you married? Can’t you find a woman who will be a good wife?”

Thomas replied, “Actually, I’ve found many women I wanted to marry, but when I bring them home to meet my parents, my mother doesn’t like them.”

His friend thinks for a moment and says, “I’ve got the perfect solution, just find a girl who’s just like your mother.”

A few months later they meet again and his friend says, “Did you find the perfect girl? Did your mother like her?”

With a frown on his face, Thomas answers, “Yes, I found the perfect girl. She was just like my mother. You were right, my mother liked her very much.” The friend said, “Then what’s the problem?” Thomas replied, “My father doesn’t like her.”

Clarence 

XXX

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NT Markets

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