ASX drops 36 to 6456 as trade worries wane and markets stabilise. US futures up 74 points. Banks stage a late rally to spare a soggier end to the week. Other financials did not fare so well as insurers badly hit as yields continue to drop. CBA actually rose by 0.04% after being down most of the day. IAG down 2.2% and QBE down 2.1% though. Defensive staples were also easier led by WOW down 2.7% on broker downgrades and tech stocks seem to be unwinding recent ‘irrational’ valuations. APT fell 4.4% and WTC down 2.9%. Energy stocks suffered as oil collapsed and WPL fell 3.5% and STO down 3.2%. Miners modestly higher with BHP up 0.35%. TLS found some buyers rising 0.6% with healthcare finding buyers late with CSL up 0.1%. US is closed Monday for Memorial Day and UK is also out as D-Day looms for PM May. European elections this weekend. Asian markets mixed as Japan slips a little down 0.2% and China revives with a 0.4% rise. AUD steady at 68.70c.

Todays Highlights

  • ASX 200 falls 36 to 6456
  • High 6486 Low 6437. Down but not out.
  • ASX 200 up 1.4% since election
  • Banks weaken slightly but energy gets smashed.
  • Miners find buyers as gold helps.
  • Tech stocks see profit taking.
  • Healthcare steady.
  • AUD steady at 68.70c on rate cut hopes.
  • Aussie Gold up slightly to $1855.
  • Bitcoin slips to $7622.
  • US futures up 74.
  • Asian markets mixed with Japan down 0.07% and China up 0.43%

STOCKS

  • ALL +2.71% broker upgrades on results.
  • DDR +4.03% bouncing back.
  • MYR +3.08% Wilsons tip.
  • EML +6.25% another conference tip.
  • GOR +2.80% gold price. Gruyere looms.
  • APT -4.39% Z1P -5.91% profit taking.
  • AKP -8.10% low volume on disappointing news.
  • NEC +0.76%% dumps pollsters after election failure.
  • TIP -10.00% new IPO not a great start.
  • LCK +25.00% commercialisation update on gas project.
  • ANO +20.41% unexpected increase in sales orders.
  • GXY -6.55 % PLS -5.66% and ORE -4.01% spooked by lithium price predictions.
  • BRU +26.53% rumours that Twiggy is buying.
  • PET +4.55% bulls are running after contract win.
  • WZR +18.75% back in the winner’s circle.
  • NET +2.33% going well too.
  • WES -0.19% lithium gloom.
  • SYD +1.33% confirm guidance.
  • KGN -3.08% ACCC fallout.
  • SPT -4.68% SPP weighs.
  • Speculative stock of the Day: Nothing special today. Not on volume anyway.
  • Biggest Risers: CEN, ISX, EMLK, DDR, MP1, RMS and ANN
  • Biggest Falls: GXY, Z1P, PLS, CVN, BPT , CTD and MIN.

TODAY

  • Estia Health (EHE) –3.01% Trading update; full-year EBITDA guidance now expected to be between $92m and $94m, while it is an increase of 2-4% on FY18, it is lower than previously anticipated. Total costs in FY19 associated with the Royal Commission are estimated to be approximately $2.3m.
  • Sydney Airport (SYD) –1.33% Has reaffirmed guidance at its AGM, full-year distribution is expected to be 39c per share and capex is anticipated to be between $390-440m. An interim distribution of 19.5c per share was declared.
  • Syrah Resources (SYR) +0.43% Provides outlook at its AGM for its Balama graphite operation; C1 cash operating costs trending towards $400/t during 2019, production target of around 250kt.
  • Healthscope (HSO)Scheme of arrangement with Brookfield approved by Federal Court.
  • AusNet Services (AST) -0.28% Appoints Tony Narvaez as MD, effective November 1. Narvaez is currently CEO of Endeavour Energy.
  • Whispr has secued funding and will list June 19th.
  • Woolworths (WOW) -2.71% renewed pressure from shareholders for the supermarket group to cut ties with its pubs and pokies business.

ECONOMIC NEWS

  • Westpac Bank (WBC) has become the first major bank to forecast 3 rate cuts now. June, August and November is the call taking the rate down to a mere 0.75%.

BOND MARKETS

  • 2-Year bond yields down 4bps to 1.10%
  • 5-Year yields down 4bps to 1.18%
  • 10-Year yields down 4bps to 1.53%

15-year bonds now yield 1.8% no wonder equities are where they are.

ASIAN NEWS

  • Luckin Coffee (think Chinee Starbucks) has plunged 39% since soaring 53% on listing. It is now down 7.5% on its IPO but Lyft is down 20%.
  • The Chinese yuan has fallen 7.5% against the USD in the last year giving some relief for the economy.
  • Chinese Investment in the US has dropped dramatically.

  • Consumer inflation in Japan edged up in April. Still, below the 2% target, the BOJ has had forever.

EUROPEAN AND US NEWS

  • Facebook has removed 2.2m fake accounts in 1Q.
  • Finally,it looks like Theresa May is set to name the date as her resignation day. June 10th is shaping up as Boris and co joustle for the poisoned chalice. Apparently she wants to be around for D-Day celebrations. 75 years. She also wants to be there to greet Trump for his visit. Could take forever.

  • Goldman Sachs says buy commodities after the worst week of 2019. Sees a 6.1% return in three months for Commodity index.

  • Here’s how the trade war is playing out in US prices.

  • US PMI down to the lowest number in a decade. Not a great sign as the trade war starts to play out.
  • SpaceX has successfully deployed 60 Starlink satellites into orbit
  • Trump has proposed punishment for currency manipulators. That means you China and you Germany.
  • Memorial Day weekend in the US. The UK has Monday off too. Expect lots of tweets.

And finally…………….

Some have counselled me to go to a long-term care home.

I was not sure about this. So I decided to ask my long time doctor. So, I awaited my next visit and I asked him, “How do you determine whether or not an older person should be put in a Long-Term Care Home?”

“Well,” he said, “we fill up a bathtub, then we offer a teaspoon, a teacup and a bucket to the person to empty the bathtub.”

“Oh, I understand,” I said. “A normal person would use the bucket because it is bigger than the spoon or the teacup.”

“No,” he said. “A normal person would pull the plug.”

“Do you want a bed near the window?

Clarence

XXX

 

mt_tryforfree

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