ASX 200 rallies from lows of 5697 to close 48 points down at 5738 on broad based losses on the ‘Trump Dump’. Jobs number beats expectations, Fairfax gets another bid and Sirtex reports lacklustre clinical results. Asian markets down with Japan down 1.40% and China down 0.38%. AUD 74.55c and US futures rally 22 points.

STOCKS AND SECTORS

  • Miners were mixed with BHP -0.50%, RIO +0.31% and Fortescue Metals (FMG) -1.20%. Base metal stocks rose with Western Metals (WSA) +3.43%, Oz Minerals (OZL) +0.15% and Cudeco (CDU) +24.49% after a presentation at the Brisbane Mining Club today. South32 (S32) -1.87% and Mineral Resources (MIN) -1.29% fell.
  • Energy stocks drew no strength from the higher oil price with Woodside (WPL) -0.37%, Oil Search (OSH) -1.22% and Santos (STO) -0.57%.
  • Gold miners jumped early only to give back gains as the AUD robbed the rise in currency terms. Northern Star (NST) unchanged, Westgold Resources (WGX) +0.96% and Resolute Mining (RSG) +0.41%. Others not so hot, Oceanagold (OGC) -4.41%
  • Banks and financials faced another sell off today as Westpac (WBC) -3.11% went ex- dividend and the Big Bank Basket fell to $171.57. The losses are slowing and there is a chance of a bounce especially if the banks and the government call a truce to the war of words. Wealth Managers, highly geared to equity market performance, were hit hard with Magellan Financial (MFG) -2.36%, BT Investment (BTT) -2.31% and Macquarie Group (MQG) -1.22%.
  • Industrials saw some defensive buying in places. Sydney Airport (SYD) +1.24% and Transurban (TCL) +0.92% plus Macquarie Atlas Road (MQA) +1.08%. Elsewhere losses continued in the retail sector, Harvey Norman (HVN) -1.04%, Super Retail (SUL) -1.22% and Breville Group (BRG) -3.56%. Mining contractors and infrastructure builders slid with ALS (ALQ) -3.05% one of the biggest casualties on a broker downgrade ahead of results next Tuesday. Coca Cola Amatil (CCL) -3.84% had a day to forget as analysts weighed up the recent AGM comments.
  • In the building sector, results from James Hardie (JHX) -7.78% sapped the enthusiasm out of Boral (BLD) -2.10% and CSR -2.10%
  • Telcos found some defensive support with Telstra (TLS) +0.23%, Vocus Group (VOC) +4.08% and TPG Telecom (TPM) +0.17%. IT though less defensive it seems, Computershare (CPU) -2.24%, Xero (XRO) -3.19% and MYOB (MYO) -0.28% on increased competition from Quicken. Aconex (ACX) -3.93% resumed its slide
  • Healthcare was the best of times, the worst of times with Impedimed (IPD) +38.89% after a clinical study found a significant reduction in Lymphoedema. On the other side Sirtex (SRX) -28.33% had a disappointing clinical trial outcome. To say the least. CSL -2.13% finally saw profit taking with Resmed (RMD) -1.08% as the company plans to renew its patent case against Fisher and Paykel (FPH) -1.57%.
  • Speculative stock of the day: Appen (APX) +25.58% after the company pleasantly surprised the market late last night with a positive profit upgrade of up to 40%-50% above last year. Appen combines AI and machine learning with high quality data including speech and text.

 CORPORATE NEWS

  • Fairfax Media (FXJ) +6.90% A rival bid has emerged from Hellman and Friedman at 122.5c to 125c. In light of this development the company has granted due diligence to both TPG and Hellman.
  • James Hardie (JHX) –7.78% Results show net profit up 13% and a US$0.28c dividend. Group adjusted operating profit of US$54,6m for the quarter and US$248.6m for the full year, up 2% for the year. No forecasts were given apart for fibre cement EBIT margins of around 20-25%.
  • Newcrest (NCM) +0.52% The PFS on the expansion of Cadia has been completed and the company is consulting the community on an increase in processing and production to 35mtpa. At present the company is undertaking remediation work following the seismic event recently. Construction is set to start in 2018 calendar year if the expansion goes ahead.
  • Virgin Australia (VAH) -5.56% The company reported a loss after tax of $69.0m in what is historically their weakest quarter. The company continued to reduce debt and is expecting a better performance in the 4Q 17 against 4Q2016.
  • BHP Billiton (BHP) -0.50% has met with activist shareholder, Elliott Advisers today and the talks were ‘constructive’ according to the hedge fund. BHP declined to comment.
  • AJ Lucas (AJL) was seeking to raise at least $48.2m via a rights issue to shareholders and another $5m in a placement that preceded the rights issue. The total raising was worth $53.7m.
  • Sirtex (SRX) – 28.33% results from a clinical study in Asia are in and show no significant overall survival although the side effects of the SIR-Spheres treatment are less pronounced enabling a better quality of life. The Overall Survival (OS) rate was 11.3 months versus 10.4 for sorafenib, the competition. In addition, Kevin Richardson has left the company. He was the CEO of the Americas.

BOND CORNER

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ECONOMIC NEWS

  • Australian jobs numbers at 5.7% slightly better than the expected 5.9%. Part time jobs increased 49k with full-time jobs down 11.6K Participation rate steady at 64.8%. Over the past year, employment grew by 192,000, the largest annual increase since July 2016.

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ASIAN NEWS

  • Japanese GDP numbers this morning show a 2.2% annualised growth rate above expectations of 1.7%. Private consumption up 0.4% slightly below estimates of 0.5%. Business spending increased though up 0.2%.

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EUROPE AND US

  • The latest Trump issues are a gift for the bookies.

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  • In the UK, the election is heating up with the Conservative party promising to wipe out the UK deficit by the middle of the next decade. Theresa May is also expected to promise that corporate tax rates will fall to 17% by 2020. The IMF forecasts for the UK show the Government would have to implement an extra GBP14bn of tax rises or spending cuts if it wanted to balance the books by 2022.
  • UK retail sales and ECB minutes tonight.

And finally……………

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A loving couple was celebrating their 25th wedding anniversary, privately, at home with a couple of bottles of champagne.

A bit tipsy and feeling very intimate the husband turns to his wife and asks, “Tell me truthfully, have you ever been unfaithful to me?”

“Well,” she replied, “since you ask, to tell you the truth I have been unfaithful on three occasions.”

“What? How could you?”

“Let me tell you about it,” she said. “The first time was back when we were first married. You needed open heart surgery and we didn’t have the money, so I went to bed with the surgeon and got him to operate for free.”

“Gee! That was noble of you. And, besides, I guess I should be grateful. But, tell me, what about the second time?”

“Do you remember that you wanted the position of the, and they were going to pass you over for someone else? Well, I went to bed with the President and the Vice President and they gave you the job.”

“Hell, I think I could have done it on my own. But, then again, I guess I should be grateful. And so, what about the third time?”

“Do you remember two years ago when you wanted to become President of the Baseball Team, and you were missing 53 votes…?”

Clarence

XXXX

 

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NT Markets

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