A week to forget down over 3%

Todays Highlights

• ASX 200 closes down 5 to 5731 after late sell off in lacklustre trade.
• High 5758 Low 5726. Low volume close to week.
• ASX 200 down 192 (-3.2%) for the week.
• Banks cling to square as miners rally.
• MYR halts trading on leaked sales numbers.
• MQG sells Quadrant and ups guidance.
• Staples slip with healthcare.
• AUD drops slightly to 72.65c.
• Bitcoin steadies to US$5568.
• Aussie Gold rallies slightly to $1671.
• US futures down 48.
• Asian markets mixed with Japan down 0.60% and China modestly higher by 0.89%.

STOCKS IN FOCUS

• CGC +11.85% honey we bought a farm.
• APT +10.27% ASIC recommends the sector not be included in the credit licensing regime.
• NEA +7.38% broker upgrade.
• GEM +5.58% enjoying the love on upgrades.
• FMG +3.78% AGM comments and better iron ore prices.
• CYB -8.16% UK banks smashed on Brexit woes.
• KMD -6.13% ex-div and then some.
• CTD -2.90% some profit taking after strong week.
• AX1 -3.51% still falling. Wrong footed.
• ALU +8.54% AGM and technology presentation.
• AAD -2.19% inquiry continues.
• LLC +2.26% AGM Clears air.
• MQG +0.16% upgrades earnings on Quadrant sale.
• AVH +19.75% US sales team now in place.
• ANG +4.35% get a tip at Hearts and Minds.
• NAB -0.46% CEO takes a pay cut. Aren’t bonuses given for a good job?
• PNV +3.51% positive AGM comments.
• SPL +5.14% pancreatic cancer trials going well.
• SXY +7.79% bringing it back.
• LNK -3.09% CFO succession plan.
• Speculative stock of the day: MGM Wireless (MWR) +11.54% after positive AGM comments on sales of SPACETALK.
• Biggest risers – CGC, APT, ALU, SXY, NEA and FXL.
• Biggest fallers – CYB, KMD, PMC, EHL, AX1 and LNK.

IN THE NEWS

• Costa Group (CGC) +11.85% To sign a conditional agreement to acquire farming operations of Nangiloc Colignan Farm. The acquisition is expected to be completed in late 2018.
• Sundance Energy (SEA) –unchanged- Third quarter update. Adjusted EBITDA above consensus estimates at $30.4m. Revenue and net income also beat expectations at $53.8m and $4.6m respectively. Production guidance for Q4 and the full year has been reaffirmed.
• ACCC will not oppose the US$2.15bn acquisition of Quadrant Energy by Santos (STO). Santos MD and CEO Kevin Gallager said the deal is “materially value accretive for STO shareholders.” Completion is expected to occur within weeks. Macquarie Group (MQG) notes the decision raises its FY19 outlook around 15%. MQG holds 21.8% of Quadrant Energy, and subject to financial close, expects to receive the proceeds of the transaction during FY19.
• National Australia Bank (NAB) -0.46% NAB board has cleared the CEO of wrongdoing in relation to the Human Group, despite minor ‘inadvertent’ breaches of policy. Police have been investigating the Human Group with regards to possible fraud and there is an ongoing investigation focusing on the conduct of Thorburn’s former chief of staff, Rosemary Rogers, and the Human Group, specifically pointing to a trip to Fiji by Thorburn organized by Rogers through the Human Group and a Thermomix.
• Myer (MYR) –trading halt- The AFR reported this morning that Myer’s Q1 sales came in at -5.5%, whilst online sales were -5.2%. There is no statement about where the numbers are from but that they are ‘numbers reported monthly to the company’s lending syndicate’. Myer has since come out and said that is it in compliance with its disclosure obligations.
• Link (LNK) –3.09% Reports mild 1H business performance at its AGM, with cost benefit from integration programs weighted to 2H 2019. Both Corporate Markets and T&I have traded well in the first 4 months of FY19, whilst there is a solid pipeline of organic opportunities across the business.

 

ECONOMIC NEWS

• The Australian Annual National Accounts released today by the ABS show that the size of the economy has reached over $1.8 trillion, reflecting a 2.8% increase in 2017-18. This is up from the $1.2 trillion in 2007-08 in nominal terms.
• In 2017-18 the largest industries in the Australian economy were financial and insurance services, mining, construction, and health care and social assistance, representing over 30% of the economy.

BOND MARKETS

• 2-Year bonds down 2bps yield unchanged at 2.05%
• 5-Year yields down 3bps to 2.26%
• 10-Year yields down 1bps to 2.69%

ASIAN MARKET NEWS

• Not a good look. North Korea has tested an ‘ultramodern tactical weapon’.
• Josh Frydenberg has criticised the Malaysian PM for his comments on the Jerusalem embassy issue. Won’t be helpful for LYC.

EUROPEAN AND US HEADLINES

• Fancy a flutter on the worst job in politics. UK PM. Could be a change very soon. Even tonight. More ministers to fall in a very British coup.

• This painting sold for US$90m. It is a Hockney. And he is still alive. A record.
• Saudi prince is in the clear on Khashoggi murder. Death penalty sought for 5 of 11 suspects though. OPEC this weekend.
• Wayne Rooney bids farewell.

And finally….

“I’m reading a book about anti-gravity. It’s impossible to put down.

“What do you call a horse that moves around a lot? Unstable.”

“What’s the best part about living in Switzerland? I don’t know, but the flag is a big plus.”

Clarence

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