Wednesday 14th November – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ScoMo arrives in Indonesia. Market tanks. Coincidence? I think not.

Love these memes…whose bright idea was the bus…

ScoMo where the bloody hell are you?

Todays Highlights

ASX 200 collapses 101 points to 5733.
Tentative start swamped by selling kicking in at 11.30.
High 5837 Low 5729. Heavy volume again.
AGM reports point to problems.
Broad based losses with energy and banks hit hard.
Big Bank Basket down to $144.
TLS, CTD bright spots. Not many around.
More AGM downgrades from some.
AUD firms on wage growth numbers to 72.21c
Bitcoin slightly weaker at US$6265.
Aussie Gold slips slightly to $1665.
US futures up 7
Asian markets mixed with Japan bouncing 0.26% and China down modestly by 0.14%.

STOCKS IN FOCUS

CYB +3.37% currency helping sentiment and possible Brexit deal.
CTD +3.01% bucking the negativity.
SWM +2.05% AGM comments.
ING +0.70% MD gets visa. Capital return looming.
AOG -9.81% AGM comments.
PGH -9.72% Earnings downgrade. ‘She’s dead. Wrapped in plastic’ Twin Peaks.
PPH -7.64% Morgan Stanley substantial.
BRG -6.25% roasted today following AGM.
ELD -8.44% giving it all away.
PVS -32.22% earnings update
FBR +27.27% Hadrian build a wall and then a house.
SLR -9.62% merger with DRM
LVH +15.38% secures deal with Vodafone.
SOL +3.00% good day. Substantial shareholder notice?
RCR – suspended from trade. No update. This is not going to end well.
Speculative stock of the day: Only Fast Brick (FBR) +27.27% has completed a 3-bedroom house with its 3-D brick printer. Onwards and upwards and performance rights granted.
Biggest risers – YAL, GTK, PMC, CYB, CTYD and SOL
Biggest fallers – SEA, AOG, PGH, AMI, ELD and JMS.

IN THE NEWS

Computershare (CPU) –1.06% Trading update at AGM; very confident in reaffirming FY19 management EPS guidance of +10% growth in constant currency terms. Start to FY 19 has been characterised as encouraging, with growth in US Mortgage Services and Employee Share Plans, profitability in Registry and improving Margin Income.
Downer EDI (DOW) –2.76% There were media reports this morning that a potential management buyout of Downer’s mining services division was on the cards. Downer has come out and refuted the report, confirming it has received no such proposal.
Seven West Media (SWM) +2.05% provides trading update at AGM, reiterates FY guidance. Q1 was flat amid a softer September and October due to a pullback in spend from banking and insurance given the Royal Commission. Performance in H2 is expected to be stronger, driven by increased ad spend including election money. Expects metro TV ad market to be broadly flat in the financial year, but for Seven to increase share. Company reiterated guidance issued at FY18 result for underlying EBIT in FY19 to grow by 5-10% on the prior period.
Aveo Group (AOG) –9.81% Trading sales update at the AGM. Sales outcomes are at risk for FY19 as the housing market continues to come off. Consequently, management did not confirm EPS guidance due to uncertainty around future sales levels. The company is expecting annualised sales of around 1,150, up from last years number of 974 but lower than the minimum target of 1,500 announced in August. Demand for new stock sales is projected to be around 275 units for FY19, up from the 225 units sold in FY18. FY20 production will be scaled back in line with the softening market. The company to targeting a distribution payout of 40-60% of underlying profit.
Dulux Group (DLX) –0.14% FY Results – Net profit after tax of $150.7m, missing estimates of $154.7m despite rising 5.4% from 2017. Revenue hit expectations at $1.84bn, a 3.3% rise on 2017. EBITDA rose by 5% to $257.7m and EBIT rose 4.2% to $232.2m. A final dividend of 14c per share has been announced. The company expects construction completions to stay steady at the FY18 level over FY19 despite an expected fall in construction approvals.

ECONOMIC NEWS

Consumer sentiment – lifted by 2.8% to 104.3 in November from 101.5 in October, according to the Westpac Survey this morning.
Wage Price Index – rose 2.3% YoY in the third quarter of 2018, hitting expectations and increasing from the 2.1% rise for the previous quarter. On a quarterly basis wages rose 0.6%, meeting consensus and matching the previous quarter.

BOND MARKETS

2-Year bonds down 2bps yield unchanged at 2.05%
5-Year yields down 3bps to 2.26%
10-Year yields down 4bps to 2.85%

ASIAN MARKET NEWS

China retail sales drop. Not a positive sign.

Japan suffering the unintended consequences of Trumps war on Trade. 857 of the Topix’s 2,106 companies have fallen more than 20% since the January high. For the Nikkei 225 Stock Average of blue-chip firms, almost 100 companies have declined that much.

EUROPEAN AND US HEADLINES

Boeing struggling to fix a software problem in its 737. Bit late for the recent crash victims.
The UK and EU have agreed to the text of a ‘divorce’ settlement. Hard thing will be to get it through Cabinet, Parliament and then Boris.
An Edward Hopper painting has sold for US$85m. Chop Suey. Top Suey?
Italy remains defiant on its budget position.
CNN sues the Trump administration for denying its correspondent his press pass. First ammendment rights. Trump threatens to invade France to teach them how its done.
US hedge fund billionaire Steve Cohen is warning of a bear market within 2-years.