Today’s Headlines

• ASX 200 down 19 to 6278 as early rally fails. Closes on lows.
• High 6307 Low 6277. Up 44 pts for the week (0.7%)
• NEG passes to next stage. Royal Commission winds up.
• RBA issues statement on monetary policy. Rates on hold for a long while.
• Financials better but commodity stocks weaken on Asian falls.
• Healthcare sector rallies but energy runs out of gas.
• AUD weaker to 73.30c as SOMP released.
• Bitcoin weaker again at US$6429
• Aussie Gold steady at $1649.
• US futures down 66.
• Asian markets weaker again as China down 0.19% and Japan down 1.3%.

STOCK STUFF

Movers and Shakers

• DMP +3.00% short squeeze ahead of numbers.
• MTS +3.42% short squeeze following MFG results.
• IFN +1.75% bounces after sell-off.
• GEM -3.72% sinks on Mayfield comments in results.
• DHG -2.15% REA says bring it on, taking market share.
• BXB -2.61% acknowledges class action.
• PPH +4.27% oversold.
• AGL -2.32% brokers downgrade after results.
• AJM -5.17% bid rebuffed sees profit taking.
• NGI +6.06% broker upgrades following results.
• BIN -4.93% in the sin bin today.
• ELD -6.01% drought weighs.
• FSF -3.03% weaker on farmgate prices.
• BBN +38.51% competition falling away.
• KGN +5.68% positive momentum.
• BLA -7.44% clouds over.
• Speculative stock of the day: MGM Wireless (MWR) +% thin volume but CEO on charm offensive.
• Biggest risers – NGI, PSI, CIA, PPH, A2M, SEA and REA.
• Biggest fallers – JHX, ELD, AJM, ELD, SGM, KDR and FAR.

TODAY

• News Corp (NWS) +1.35% FY18 fourth quarter result. Revenue up 29% to $2.69bn, factoring in the Foxtel transaction it rose 5.2%. NWS recorded a net loss of $355m, EBITDA was up 45% to $312m including the results of Foxtel. When leaving out the merger-related charges, the company reported adjusted EPS of 8c.
• Fonterra (FSF) –3.03% Cuts last season’s 2017/18 forecast Farmgate Milk Price to NZ$6.70 from NZ$6.75 per kgMS. Previously announced NZ$0.25-0.30 guidance range has been held.
• James Hardie (JHX) –6.55% First quarter FY19 results. Net profit up 58% to US$90.6m. Adjusted net operating profit, which strips out asbestos liabilities, rose by 29% to US$79.9m. For the full-year JHX expects an adjusted net operating profit of between US$300-US$340m, falling slightly below consensus of US$313-US$358m.
• REA Group (REA) +3.63% Annual profit up 23% to $253.1m, a final dividend has been declared at 62c bringing the full-year pay-out to 109c, up 20% on year. Annual revenue rose by 20% to $807.7m, while EBITDA was up 22% to $463.7m. Australian residential listings fell 4% in July compared with a year ago.
• Baby Bunting (BBN) +38.51% FY18 results. Sales up 9% to $303.1m, statutory net profit was down 29.1% to $8.7m. FY19 EBITDA is expected to be in the range of $24-27m, excluding employee equity incentive expenses and the gross profit margin is expected to be +34%. Gross profit margin in FY18 was hit by price deflation at 33.3%.

ECONOMIC NEWS

RBA Statement of Monetary Policy (SOMP) Click here for the full statement.

The highlights:

• The Australian economy remains on track to achieve lower unemployment and higher inflation over time.
• GDP growth is expected to be a little above 3% in both 2018 and 2019, which will reduce spare capacity.
• CPI inflation is expected to be quite low in the September quarter.
• Unemployment at 5.5% by December 2018.
• As the labour market tightens, wages growth and inflation should increase gradually.
• Above-trend GDP growth should result in a gradual decline in the unemployment rate to 5% in 2020.
• Conditions in the established housing markets in Sydney and Melbourne continue to ease, but the declines in prices from their peaks remain modest overall.
• The average rate paid across all mortgages has drifted down over the past year.
• Consumption is expected to increase steadily, at a rate a little above the average of recent years.
• Business conditions remain positive. Surveyed business conditions are above average, especially for goods-related sectors.
• The Bank’s forecasts are for CPI inflation to pick up to be around 2.25% in both 2019 and 2020. Underlying inflation is also expected to increase, from close to 2% over the year to June 2018 to around 2.25% in 2020.

BOND MARKETS

ASIAN MARKET NEWS

Economic News

• Japanese second quarter GDP came in +0.5% quarter on quarter, above expectations of 0.3%. For the year, the GDP expanded 1.9%, above estimates of a 1.4% lift.
• Japanese producer prices up 3.1% on year in July, beating expectations of 2.9%. It was the highest rate in eight months.
• Morgan Stanley has warned on semi-conductor inventory levels rising. Samsung takes a dive.
• Noble has published a long-awaited restructure.

EUROPEAN AND US HEADLINES

• European markets expected to open lower. UK release 2nd quarter GDP report. FTSE expected to open down 3  Dax down 16 and CAC down 12.
• US Infaltion number tonight. A big one.
• Things are getting weird with the lawyer for Stormy Daniels considering running for President.
• Trouble brewing in Europe for the euro and EM currencies as the issues with the Turkish lira are beginning to worry traders. EU banking exposure under scrutiny.
• UK Department store House of Fraser has less than two weeks to avoid collapse. Aerospace sales dominated UK arms exports, making up 87% of the total, compared with just 7% for naval equipment and 6% for land warfare sales.
• UK sales of defence equipment to foreign customers surged 53% last year to £9bn, confirming the UK’s position as one of the world’s top arms exporters.
• Russia vows to retaliate against the US on sanctions. Europe starting to get worried.

And finally…….

I saw the list of the top 100 things to do before you die for dolphins and swim with humans wasn’t on it.

I saw my optometrist the other day. Which made him a bit redundant.

I was thinking about booking a session with a Psychic, so I’m expecting a phone call pretty soon.

I describe my girlfriend as Amazonian, not because she’s tall but because she recommends things I might like based on my previous purchases.

Clarence

XXX