Today’s Headlines

• ASX 200 down a huge 165 to 5664
• High 5803 Low 5664. Now down over 10% since August.
• Correction is official.
• FTSE All-World Index has lost 7.2% this month.
• Nowhere to ride to nowhere to hide.
• AMP loses  25% as investors capitulate after fund outflows.
• Banks, miners, and energy stocks lead the fall. No sign of bargain hunters.
• Gold miners only positive sector.Just.
• PEXA float pulled.
• AUD steady at 70.82c
• Bitcoin steady at US$6390
• Aussie Gold firms to $1747.
• US futures up 77
• Asian markets slide with Japan down 2.80% and China down 1.36% as the contagion from the US continues.

STOCK STUFF

• LYC +7.26%% a positive quarterly report, a rare bright spot.
• SUL -10.20% continue to sell off as brokers downgrade.
• BAL -6.02% broker downgrades.
• FMG -5.70% quarterly report disappoints.
• CRN -6.34% very disappointing start.
• CAN -11.51% signs an R&D agreement with CSIRO.
• BBN -9.28% retail struggling.
• MAQ -6.86% on low volume.
• REG -1.98% avoids first strike, just.
• AMN +6.62% Mackay SOP project fieldwork update.
• AVH +2.15% controlled clinical study of RECELL system.
• JBH -2.93% reaffirms guidance avoids first strike against pay.
• HUB -5.11% high PE stocks under pressure.
• IFL -6.25% FUMAS for September end.
• CWY +5.04% AGM presentation.
• CSL -4.07% in the firing line.
• WOR -% entitlement issue weighs.
• AGL -7.27% electricity retailer woes.
• APA -1.96% FIRB 90 -day extension on CKI bid. Waiting for Godot.
• MYR -3.06% cuts directors’ salaries ahead of AGM vote.
• Speculative stock of the day: Third day in a row for Memphasys (MEM) +43.24% after the recent announcement to appoint a male infertility clinic to trial its FELIX device. Big volume again.
• Biggest risers – LYC, CWY, PSI, RSG, RRL and SBM
• Biggest fallers – AMP, EHL, SUL, WOR, SYR and WOR

TODAY

• AMP (AMP) –24.47% Portfolio review and Q3 cash flows. AMP to sell its wealth protection and mature business (AMP life) to Resolution Life for $3.3bn, expected to be completed in the second half of 2019. It has entered into a binding reinsurance agreement with Swiss Re for the New Zealand retail wealth protection portfolio, which is expected to release $150m of capital to AMP. AMP is also looking to divest its New Zealand wealth management and advice business via an IPO in 2019. AMP said it continues to target a total FY18 dividend payout at the lower end of its guidance range of between 70-90% of underlying profit. AWM assets under management lifted $570m in the third quarter to $132.6bn. AWM net outflows came in at $1.5bn. AMP Bank’s total loan book was steady at $20bn at the end of Q3 18.
• APA Group (APA) –1.96% Reaffirms FY19 guidance at AGM; EBITDA $1.55-157B. If CKI bid approved in next 7-10 days, shareholder meeting in early Dec, with payment mid-Jan. If not, vote to be held next year. If deal does not proceed, APA expects to pay a distribution of 46.5c.
• Blackmores (BKL) –5.40% Reported today. 1Q NPAT up to $16.5m from $15.4m a year ago. Australia revenue growth up 19% on year, overall China sales up 18%. Outlook is for continued growth for the full year, with the company confident that China sales will continue to grow strongly. The company notes no issues in getting their product into China and have a positive outlook on Chinese regulation.
• iSelect (ISU) –2.90% Trading update at AGM; positive EBIT result in Q1 FY19 vs loss in Q1 FY18. Early signs suggest the positive trend continuing into Q2 FY19. Board is confident of a better year ahead, with expectations of a return to historic profitability over the medium term.
• JB Hi-Fi (JBH) –2.93% Reaffirms FY19 sales guidance of $7.1B and provides Q1 sales update. Total sales growth remains positive in Australia (+5.3%) and New Zealand (+4%) but has slowed from the prior corresponding period numbers of 8.1% and 6.3% respectively. Good Guys sales growth has also slowed, from 4.1% to 2.3%. Comparable sales growth slowed in Australia and for The Good Guys, but grew in New Zealand.
• Qantas (QAN) –4.63% First quarter revenue up 6.3% to $4.41bn. Rising fuel costs were offset by higher passenger revenue and capacity discipline. The Value of forward bookings was up 8%. The group has hedged 76% of its fuel for FY19 and 39% for FY20. FY19 fuel costs are expected to be $4.09bn up 26% on FY18.
• Northern Star Resources (NST) –1.06% Quarterly update. On track to meet guidance of 850-900k ounces in FY19 at an AISC of $1,050-1,150 per ounce. First quarter sales came in at 212,682 ounces at an AISC of $1,226 per ounce.
• Regis Healthcare (REG) –1.98% Reaffirms FY19 guidance at AGM. EBITDA expected to be broadly in line with FY18. Implied NPAT range of $47-51m, in line with analyst estimates. Integration of Tasmanian business, Presbyterian Care, is moving along well and expected to be EPS accretive in FY19.
• Wisetech (WTC) –2.74% Has upgraded FY19 guidance for revenue and EBITDA growth. Revenue growth now expected in the $320-333m range (44-50%), up from $315-325m. EBITDA growth up to $102-107m (31-37%), up from $100-105m.
• Fortescue Metals (FMG) –5.70% Quarterly update. Iron ore shipments came in at 40.2mt, down 9% on year with cash production costs of US$13.19wmt, up 9% on year. FMG affirmed guidance for FY19 targeting total shipments of between 165 to 173mt, cash production costs of between US$12-13wmt and total capital expenditure of US$1.2bn. Cash on hand at the end of the quarter was US$972m with net debt of US$3.0bn. The average price realization lifted 12.5% to US$45/dmt on quarter, representing a 67% realisation of the average Platts benchmark price, up 2% on quarter.

ECONOMIC NEWS

• Domain has released its latest report showing nationally house prices have fallen 2.6% and units down 1.6%. Melbourne was the worst spot down 3.9% over the quarter. Sydney down 3.1%.

BOND MARKETS

ASIAN MARKET NEWS

• Asian stocks have now lost US$5 trillion in marlet cap this year.

• China is ramping up the rhetoric against the US and Taiwan. China calls challenge on Taiwan ‘dangerous’.
• Cathay Pacific suffers data leak, Hits 9-year low.
• South Korea GDP misses expectations.

EUROPEAN AND US HEADLINES

• The US has warned the UK against any more alliances with China on its nuclear plants in Britain.
• Janet Yellen warns over plunging loan standards. Sees systemic risk from deregulation.
• UK National Audit Office has warned that the UK is not prepared for a Hard Brexit. According to the NAO, the border force could not hire enough people quickly enough and IT systems were a problem being unable to cope with a hard Brexit.
• A UK poll shows that only 19% of Britains believe that PM May can get a good deal with the EU. Customs paperwork will surge. Good for WTC perhaps.

And finally…………

“Working at Centrelink has to be a tough job – knowing that if you get fired, you still have to come in the next day.”

 

“I’ve got a new job collecting all the jumpers left in the park at the weekends, but it’s not easy. They keep moving the goalposts”

Clarence

XXX