- ASX 200 down 35 to 5688.
- High 5718. Low 5653. Low volume start to week.
- Banks and energy lead ASX down.
- Miners slip slightly BHP steady.
- Iron ore slips again in China. Dalian futures drop 1.5%.
- Chinese imported steel rose by 750k tonnes to 140.45m tonnes.
- REITs slip with Healthcare and Industrials lower.
- Energy stocks weaker on lower oil as OPEC meets.
- AUD 79.30c.USD at a five-week low against the yen. Euro two-year high.
- US Futures down 1.
- Asian markets mixed with Japan down 0.87%, China up 0.39%.
- TLS +0.73% finding support.
- CSR -0.25% remains under pressure after huge volumes on Friday.
- SWM +5.10% with strong institutional support.
- S32 +1.47% rallying post production numbers last week.
- MQG -0.97% tightens lending standards. AGM Thursday.
- QBE -1.41% AUD strength hurting US earnings.
- NHF -2.25% health funds under pressure.
- NXT -3.82% continued negativity on AJD management fees fight.
- TWE -0.63% on stronger AUD.
- APO -6.10% reverses recent rally.
- Biggest risers – SWM, SAR, RRL, RFF, BAL and TPM
- Biggest fallers – APO, GXY, MSB, WPL, AAC and AOG.
- Iluka (ILU) +1.78% Zircon/Rutile/Synthetic Rutile production was up 36% higher than the same period last year. Improved mineral sands market conditions. Net debt decreased to $305m from $506m as US denominated debt was reduced. Minerals sands prices are up with Zircon up 7% and Rutile up 4%.
- Murray Goulburn (MGC) -2.04% Total milk intake in now expected to be around 2.3bn litres but this has not impacted the available Southern Milk Region farmgate price (FMP) of $5.20Kg MS. The company has maintained the FY18 FMP forecast but has warned the stronger AUD it may create some uncertainties in the forthcoming year. The company is continuing its strategic review and has sold Kiewa Country brand.
- Newcrest (NCM) +0.92% Production report. Gold production down 2.4% at 2,381Koz. Copper production up 1%. AISC of $787/oz up 3.3%. Lihir has recorded a record quarter for mill throughput and gold production. The company highlighted 4 years of beating production guidance.
- Charter Hall (CHC) -2.08% is in discussions with Westpac (WBC) -% on a possible acquisition of its infrastructure Funds Management business, Hastings Fund Managers.
- IMF forecasts the world economy will grow 3.5% in 2017 and a slightly faster 3.6% in 2018. IMF sees US growth fading with GDP of 2.1% China up 6.7% and 6.4% in FY18.
- Bankwest, a subsidiary of CBA, is raising rates for existing interest-only owner occupiers by 35bps.
BOND MARKET UPDATE
- Japan has its own dot points with expectations on inflation being revised down. Downward pointing triangles in the dot plot below represent estimates from board members who see downside risks to their projection while circles indicate risks are evenly balanced.
- HNA took on around $73bn in debt to fund its acquisition binge. It now has multi-billion dollar stakes in Hilton and Deutsche Bank, but three banks have now stopped lending to HNA as its bonds suffer and question marks arise over the company. Authorities have recently been taking a look at the company’s overseas deals. The 2018-dollar bond of HNA Group, fell to a record on Friday, lifting its yield to 12.6% from about 5.4% in April.
- Grab, the Asian UBER, has raised US$2.5bn from investors including Didi Chuxing, its Chinese peer, and Japan’s SoftBank in the biggest ever investment in a technology startup in Southeast Asia.
EUROPE AND US MORNING Headlines
- UK national debt now stands at GBP1.75 trillion, when excluding the bank bailouts, which is equivalent to 87.4% of GDP, a record high. GBP 65,000 for every British household. Financing the debt cost GBP4.9bn in June alone, a rise of more than GBP1bn from GBP3.7bn in the same month of 2016.
- The UK government is considering a GBP250m investment in battery technology to create a “Battery Institute” to award funds for tech companies. The project is known as the ‘Faraday Challenge’ and is a key part of the UK strategy to power car making and other industrial activity.
- US earnings season. 170 companies reporting this week. Focus on falling dollar.
An elderly couple were having dinner one evening when the husband reached across the table, took his wife’s hand in his and said,
“Martha, soon we will be married 50 years, and there’s something I have to know. In all of these 50 years, have you ever been unfaithful to me?”
Martha replied, “Well Henry, I have to be honest with you. Yes, I’ve been unfaithful to you on three occasions during these 50 years, but always for a good reason.
Henry was obviously hurt by his wife’s confession, but said, “I never suspected. Can you tell me what you mean by ‘good reasons?’ ”
Martha said, “The first time was shortly after we were married, and we were about to lose our little house because we couldn’t pay the mortgage. Do you remember that evening I went to see the banker and the next day he notified you that the loan would be extended?”
Henry recalled the visit to the banker and said, “I can forgive you for that. You saved our home, but what about the second time?”
Martha asked, “Do you remember when you were so sick, but we didn’t have the money to pay for the heart surgery you needed? Well, I went to see your doctor one night and, if you recall, he did the surgery at no charge.”
“I recall that,” said Henry. “And you did it to save my life, so of course I can forgive you for that. Now tell me about the third time.”
“All right,” Martha said. “So do you remember when you ran for president of your golf club, and you needed 53 more votes?”