ASX 200 fell 52 points to 6284 bouncing slightly off the lows inspired by the sell in May and tweet away trade tariff threat from President Trump. US Futures crumbled down 475 off the lows though. China went into meltdown on the news down 5.5%. Broad losses with the banks trying hard to buck the trend. Both ANZ and NAB were up 0.5% and 1% respectively. WBC did not fare so well given results today and the challenging outlook. Down 1.2% as dividend is a question mark on 98% payout ratio. Miners hit hard as commodity prices fell in China on trade concerns. BHP down 0.4% and FMG down 2%. Aussie gold producers should have done better and may do if the tweets continue. SBM up 1.3% and NST up 0.5%. TWE was a big loser on the back of concerns its US product would feel retaliatory heat in China, down 4.7%. Tech stocks under some pressure with WTC down 5.1% and XRO down 2.1%. Energy stocks under pressure on global growth fears with WPL down 0.5%. AUD slipped to 69.85c on tariff wars

Todays Highlights

  • ASX 200 drops 52 to 6284. Good volume.
  • High 6327 Low 6248.
  • Trump sees Sell in May and tweet away.
  • Banks outperform as ANZ and NAB rally.
  • Miners take a hit with energy.
  • Consumer stocks fall hard too.
  • High tech becomes a lower tech.
  • AUD weaker at 69.85c
  • Aussie Gold slightly higher at $1836 on lower dollar.
  • Bitcoin firms to $5655.
  • US futures down 475.
  • Asian markets struggle with China down 5.9% Japan still closed thankfully.

STOCKS

  • BUB +11.32% buys Fonterra organic formula.
  • VOC +2.03% a big week for telcos.
  • SBM +1.31% NST +0.49% EVN +0.65% gold rallies on the lower dollar.
  • CIM -7.07% accounting issues.
  • BAL -6.99% new kid on the block.
  • LYC -4.11% WA says no to waste.
  • PDL -5.10% no reason to buy this one.
  • TWE -4.75% China focus and Napa Valley issues.
  • IPD -20.75% trial results disappointing.
  • FBR +20.55% JV with Brickworks.
  • PET +4.60% results of meeting.
  • WTC -5.13% profit taking.
  • HUO -4.82% TGR -6.13% warm water and gil disease.
  • A2M -2.21% more competition.
  • MFG -2.37% FUM and equity gearing.
  • EXP +9.26% CEO appointed.
  • Speculative stock of the Day: Nothing of interest.
  • Biggest Risers: BUB, AMI, AVH, LEP, AX1 and DHG.
  • Biggest Falls: CIM, BAL, EHL, TGR, PNI and NWH.

TODAY

  • Bubs Australia (BUB) +11.32% has announced another important deal, this time with Fonterra Australia. Bubs has entered a supply agreement with Fonterra to offer Australian made, certified-organic, grass-fed infant formula. Fonterra will supply Bubs with organic milk powder, sourced from its organic milk pool in New Zealand, which will be manufactured at its facility in Darnum, Victoria. The agreement runs for an initial term until EOFY 2021. The Bubs Organic new range of infant formula will be available in Chemist Warehouse pharmacies throughout Australia within 3 months, with export to China’s cross-border eCommerce to follow shortly afterwards.
  • Macquarie Telecom (MAQ) -0.2% Appoints Geoff Richardson as Interim CFO, effective immediately. Richardson has held CFO roles at SAI Global Limited and Ardent Leisure Group.
  • Magellan Financial (MFG) –2.37% Funds under management update. FUM at the end of April totalled $83.23m, up 4.7% month on month. Net inflows of $462m, which included net retail inflows of $130m and net institutional inflows of $332m.
  • Perseus Mining (PRU) –1.14% Board approves $265m development of Yaouré gold mine, to be funded by $150m credit facility, $40m underwritten warrants, $81m of existing cash and bullion plus future cashflows. First gold production is expected in December 2020.
  • Huon Aquaculture (HUO) -4.82% has downgraded harvest expectations with tonnage now of 19,000 tonnes and expecting operating costs to increase after warmer than expected water and a jellyfish bloom in the first quarter has led to gill necrosis. Full-year EBITDA cut to between $50m and $55m, down from previous guidance of between $64m and $68m. The previous year’s operating EBITDA was $71.8m

ECONOMIC NEWS

  • Australian job advertisements in newspapers and on the internet dropped by 0.1% month-over-month in April 2019.
  • In other news Yourmoney channel is closing on May 17th.

BOND MARKETS

  • 2-Year bond yields fall 3bps to 1.28%
  • 5-Year yields fall 4bps to 1.33%
  • 10-Year yields fall 5bps to 1.74%

ASIAN NEWS

  • China is considering delaying its trade delegation to the US due Wednesday following grumpy Trump on Sunday night. Chinese Vice Premier Liu He was scheduled to arrive in Washington on Wednesday with a delegation of about 100 people for the the final round of negotiations.
  • China Caixin Services PMI for April came in ahead of expectations at 54.5 points, up 0.1 from a month earlier.
  • Yuan drops most since the last time in 2016.
  • Indonesian GDP rose 5.07% in the first quarter from a year ago, lower than the 5.2% median estimate in a Bloomberg survey of economists. The government is forecasting growth of 5.3% this year, which would be the fastest pace since 2013.

EUROPEAN AND US NEWS

  • Hopes are fading for a cross party Brexit solution.
  • The US is sending an aircraft carrier and a squadron of bombers to put more pressure on the Iranians.
  • More questions to Boeing on its 737 Max software which buyers needed to pay a premium to get the safety pack.
  • Garda World has walked away from a GBP3bn bid for G4S security.
  • All eyes on Twitter tonight.

And finally…………….

The preacher, in his Sunday sermon, used “Forgive Your Enemies” as his subject.

After a long sermon, he asked how many were willing to forgive their enemies. About half held up their hands.

Not satisfied he harangued for another twenty minutes and repeated his question. This time he received a response of about 80 percent. Still unsatisfied, he lectured for another 15 minutes and repeated his question.

With all thoughts now on Sunday dinner, all responded except one elderly lady in the rear. “Mrs. Jones, are you not willing to forgive your enemies?” “I don’t have any.” “Mrs. Jones, that is very unusual. How old are you?” “Ninety three.” “Mrs. Jones, please come down in front and tell the congregation how a person can live to be ninety-three, and not have an enemy in the world.”

The little sweetheart of a lady tottered down the aisle, very slowly turned around and said: “It’s easy, I just outlived the bitches.”

 

Clarence

XXXX

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