- ASX 200 falls 4.5 points to 5759 shaking off early losses.
- Volume remains muted. Low of 5741.
- Banks slip with miners holding the line.
- Gold miners recover as tension rises ahead of G20.
- REITs bounce and CSL improves.
- Trade number beats expectations helping dollar with AUD 76.0c.
- Barnaby Joyce floats idea of a trade war with China over N. Korea.
- Iron ore futures below US$60 -5% in Singapore
- US Futures -5
- Asian markets weaker, China -0.53%, Japan -0.50% on stronger yen.
- CSL +1.48% starting to attract bargain hunters.
- CPU +2.69% on technical buying.
- RKN +5.00% declared a dividend of $26m and a demerger of its document business.
- S32 +1.45% after a large porphyry Cu target identified in Peru.
- SYR +8.58% continue higher on electric car momentum.
- DRM -26.23% flags suspension of Andy Well operations.
- LNG -9.15% after solid buying yesterday on deal news.
- HVN -3.24% shorts are back it seems.
- FLT -1.20% retreats after broker downgrades.
- Biggest risers – SYR, GXY, ACX, SAR, MTR and BIN
- Biggest fallers – RFG, CCL, SGF, MIN, WTC and TWE.
- CIMIC Group Limited (CIM) –1.80% has sold its 23.64% shareholding in Macmahon Holdings (MAH) +3.03% raising $46.8m. This follows the unsuccessful takeover attempt earlier this year.
- Woolworths (WOW) -0.27% has said no to Coca Cola Amatil (CCL) -3.36% and its new product launch of the sugar free product. WOW says customers already have enough choice and shelf space is limited. It is CCL biggest launch in 10 years. Not a positive for CCL. Stock is down 2.6% in early trade. CCL has also lost the Domino’s Pizza (DMP) +0.84% contract to rival Pepsi. The deal accounted for one million cases of beverages a year, or about 0.3% of CCL’s total Australian beverages volume.
- AMP -0.38% is banning property buyers using their mortgage as a “piggy bank” for personal spending. In a response to regulator concerns on mortgage lending on interest only loans, refinancing to spend money on personal items will no longer be allowed.
- Galaxy Resources (GXY) +7.53%% has updated the market with a production report from Mt Cattlin showing increased production of 14,038dmt exceeding targets for lithium concentrate. The company also booked a third shipment based on revised contract pricing of US$860 per tonne.
- The trade balance surged to a surplus of $2.47bn in May from a surplus of $555m in April, coming in well above forecasts of $1bn. Exports rose 9% in May whilst imports were up just 1%.
- HSBC economist Paul Bloxham has forecast property growth to halve in the next 18 months. Sydney and Melbourne are now expected to grow by only single digit growth.
- Power prices are becoming a major issue with huge rises in the wholesale price. In Victoria, the average price hit $100MWh. In power-strapped SA, prices hit $115.93MWh up $35 from the second quarter last year. Moves in the wholesale market translate straight through to power bills for commercial customers, with no chance of escape. Households should brace for a 20% price rise from July 1. Will affect consumer confidence and discretionary spending.
- South Korean shipments abroad, an indicator of global demand, expanded almost 14% in June from a year earlier, the eighth straight month of gains.
EUROPE AND US MORNING Headlines
- Students in England now graduate owing almost GBP51,000 on average, according to the Institute for Fiscal Studies.75% will never clear their debt.
- Hope of Europe snagging the euro trading businesses have taken a hit following news that the undersea cables are not up to the job. The ECB has reported that high speed internet gives the UK the edge with its fibre optic cables. Around 84% of transactions denominated in euro are initiated outside the euro area, with Britain taking the lion’s share, at 43%.
- Worldpay has unveiled a merger with its US rival Vantiv in a GBP9.1bn deal. Payment firms are viewed as prime takeover targets given the growing number of people paying for things electronically instead of with cash.
- Also in the UK, the National Grid will be importing US LNG for the first time ever. The US is now a major energy export force after years of reliance on imports due to the boom in shale gas production.
- A “global synchronous recovery” is becoming the theme in the US.
- A chart of manufacturing PMIs for June 2007 to June 2017. All positive.