Looks like some badly done homework!
ASX 200 grinds out a modest 10-point rise to 5922 in a narrow 18-point range for the day. Banks again the powerhouse with industrials and builders solid. Gold shares hit hard again. Asian markets slightly weaker led by China down another 0.56% and Tokyo down 0.14%. AUD 74.84c and US Futures up 20.
STOCKS AND SECTORS
- Miners sold off again as BHP -0.87%, RIO -1.16% and Fortescue Metals (FMG) -3.16%. Base metals mixed with Oz Minerals (OZL) -1.55%, Sandfire (SFR) +1.40% and Independence Group (IGO) +4.17%
- Gold miners a mixed bag with Evolution Mining (EVN) +3.12%, Resolute Mining (RSG) +5.08% but Newcrest (NCM) -1.78%.
- Energy stocks in the doldrums again with Santos (STO) -5.49% singled out as the biggest loser from PM Turnbull’s move on gas companies and an export ban. Woodside (WPL) -1.01% and Origin Energy (ORG) -3.59% also suffered.
- Banks and financials doing well again as the Big Bank Basket rose once again to $189.34 with Westpac Bank (WBC) +0.98%. Macquarie Group (MQG) +0.98% continued higher with insurers mixed in late trade, Suncorp (SUN) unchanged, QBE Insurance (QBE) -0.62% and IAG +0.49%.
- Industrials: Qantas (QAN) +4.99% after one broker issued a report suggesting the company had further capacity for buy backs. Brambles (BXB) +2.73% continued its run with some action in the retail sector as JB Hi Fi (JBH) +1.87% and Harvey Norman (HVN) +1.44% returned to form.
- Building and construction stocks enjoying the moment with Boral (BLD) +0.33%, CSR +0.21% and James Hardie (JHX) +0.99%
- Healthcare returned to the winner’s enclosure led by Ramsay Health Care (RHC) +2.17%, CSL +0.60% and Resmed (RMD) +1.49% all with significant overseas earnings
- IT and Telcos continued to drift with behemoth Telstra (TLS) -0.47% and Vocus Group (VOC) -1.47%.
- Speculative stock of the day: CleanTeq (CLQ) +14.75% after noting an increase in share trading activity which is reflective of the recent quarterly update with the Nickel/Cobalt DFS progressing as planned and offtake discussions ongoing.
- Ten Network (TEN) -19.10% collapsed today as the company cast doubt on the ability to remain a going concern. Seems the company will have to wait until next week to hear whether the trio of billionaires will continue to support the group. Results today included a write down in the TV licence valuation of $215m and pushed the company to a $232m loss.
- Wesfarmers (WES) -1.46% reported its slowest sales numbers for Coles in the last nine years today with same store sales at just 0.3%. Adjusting for Easter they rose 0.7% though compared with 0.9% last quarter. Bunnings and Officeworks continue to be star performers with growth at 7.7% and 9% respectively. Target is a train wreck though with sales down 18.1%.
- Newcrest (NCM) -1.78% updated the market with news from Cadia following the seismic event last week. Of the two panels affected Panel Cave 2 suffered only minor damage and should be back in production in early 2018. No news on Panel Cave 1. Power bills though have doubled with its contract renewal next year. 70% of EBIT came from Cadia last year.
- South32 (S32) +1.08% coking coal production fell from 1.64m tonnes to 1.43m tonnes below estimates from analysts. S32 maintained its production forecast at 7.9m tonnes. The company experienced operational challenges but did increase the net cash to $1.5bn a lift of $645m.
- Mirvac Group (MGR) +0.44% announced an operational update with earnings tipped at 14.4c per stapled security. The company expects to settle 3300 residential lots in FY17 with a default rate below 2%. The company has a strategic overweight position in Sydney and Melbourne.
- Stockland (SGP) +0.61% announced third quarter numbers and is on track to meet guidance of 6%-7% growth in funds and a 4.1% increase in distributions. The company achieved 5984 net deposits in the year to date, compared to a total of 4844 net deposits in the same time last year and it is also on track to meet its full-year target of more than 6000 property settlements.
- Spotless Group (SPO) -unchanged called the bid from Downer EDI (DOW) +1.58% both opportunistic and failed to take into account the growth prospects of the company. SPO reaffirmed guidance of between $80m to $90m.
- Australian Bureau of Statistics international trade price indexes showed exports jumped 9.4% in the March quarter for an annual rate of 29.1%, the biggest increase since March 2009. Imports rose by a more modest 1.2% in the quarter and fell 0.6% over the year.
Big trouble in little China
- The Shanghai market continues to suffer as authorities clamp down on leverage. Shanghai now square for the year.
- Financial security is “strategically important” to the country’s economic and social development, President Xi Jinping said this week.
The BOJ has kept its stimulus policies unchanged and has lowered its inflation forecasts as an exit from monetary easing seems a distant way off. The BOJ cut its inflation projection for the fiscal year that started this month to 1.4% from 1.5%.
- Inflation forecast for fiscal 2017: 1.4% (previous 1.5%)
- Inflation forecast for fiscal 2018: 1.7% (previous 1.7%)
- Inflation forecast for fiscal 2019: 1.9%
- Growth forecast for fiscal 2017: 1.6% (previous 1.5%)
- Growth forecast for fiscal 2018: 1.3% (previous 1.1%)
- China’s steel futures climbed to their highest in 2-1/2 weeks overnight amid unconfirmed market talk of production curbs in cities surrounding Beijing ahead of the New Silk Road summit in May.
EUROPE AND US
- Donald Trump has said he will not terminate NAFTA immediately. However, behind the scenes, negotiations are taking place to change the agreement with Mexico and Canada.
- Deutsche Bank Q1 profit has doubled to EUR575m up from EUR236m. Revenue though fell to EUR 7.3bn on movements in the bank’s credit spreads.
Reaching the end of a job interview, the Human Resources Officer asks a young engineer fresh out of the Massachusetts Institute of Technology, “And what starting salary are you looking for?”
The engineer replies, “In the region of $125,000 a year, depending on the benefits package.”
The interviewer inquires, “Well, what would you say to a package of five weeks vacation, 14 paid holidays, full medical and dental, company matching retirement fund to 50% of salary, and a company car leased every two years, say, a red Corvette?”
The engineer sits up straight and says, “Wow! Are you kidding?”
The interviewer replies, “Yeah, but you started it.”