ASX 200 drops 76 points to 6320.5 as trade war woes weigh. US Futures down 141 . A soft start to the month following the Mexican stand-off over tariffs. Broad based losses from the outset with an acceleration into Asian trading sessions and close. Energy stocks, the worst hit as oil spiralled down on growth fears with WPL down 2.4% and STO down 2.4%. Mining stocks also under pressure as iron ore fell with BHP down 2.5% and RIO down 3.2%. Gold miners were in demand as risk off dominated. NST up 2.6% and EVN up 3.6%. Banks too were under pressure with WBC the pick of the losers down 1.3%. REITs and bond proxy utilities were a bright spot with TCL up 0.7% and GMG up 1.4%. Consumer stocks under pressure with WES down 0.8% as it looks to be giving up on designs on LYC, falling 5.6%. In corporate news, BXB fell 0.25% after announcing the completion of its IFCO RPC pooling business leading to a return of the proceeds to shareholders.  The AUD pushed up slightly to 69.48c. Asian markets mixed with Japan down 1.31% and China up 0.14%

Todays Highlights

• ASX 200 drops 76 to 6320.5
• High 6384 Low 6320.5. Good volume. Closes on lows.
• Banks stumble ahead of RBA decision.
• Iron ore run over? Miners suffer.
• Energy stocks fallk on crude.
• High PE stocks ubder pressure.
• REITs and bond proxies hold.
• Property price falls slow.
• AUD slips slightly to 69.48c
• Aussie Gold strong at $1889
• Bitcoin stumbles to US$8672.
• US futures down 180.
• Asian markets mixed with Japan down 1.31% and China up 0.14%

STOCKS

• ECX +19.64% broker upgrades.
• GOR +9.55% gold producers rally.
• ISX +3.23% back in the winner’s circle.
• PNV +3.75% brokers recommendation.
• MGX -11.89% offtake agreement.
• CUV -10.12% FDA review for SCENESSE extended 3-months
• ANO -14.16% ATO ruling on tax losses.
• LYC -5.57% WES takes bat and ball and goes home.
• LNK 6.70 falls continue.
• CGC -5.57% momentum slips.
• NUF -4.82% glyphosate update.
• Z1P -9.06% APT -4.02% BNPL stocks under pressure.
• PME -6.69% profit taking.
• MQG -3.58% fined $350,000 for negligent trading.
• EXL -8.96% profit taking.
• SVW -7.41% slowdown fears.
• Speculative stock of the Day: Lake Resources (LKE) +31.25% big volume again after a significant move last week on brine flows at Cauchari in South America.
• Biggest Risers: GOR, RRL, SAR, PNV, NCM, EVN and RSG.
• Biggest Falls: MGX, CUV, Z1P, SVW, BVS, BUB and AVH.

TODAY

• Brambles (BXB) –0.25% Completes sale of its IFCO reusable plastics containers (RPC) business to Triton and a subsidiary of the Abu Dhabi Investment Authority (ADIA) for US$2.51bn. As announced in late February, BXB intends to return around $1.95bn to shareholders through a combination of a pro-rata return of cash of approximately $300m and an on-market share buy-back of up to $1.65bn.
• Metcash (MTS) +0.34% Entered into a deal with Drakes Supermarkets to supply its Queensland stores for another 5-years.
• ANZ (ANZ) –1.22% Completes the sale of its life insurance business, OnePath Life, to Zurich Financial Services Australia.
• Nufarm (NUF) –4.82% Update on glyphosate herbicides following recent media attention. NUF has released a statement saying it is satisfied that glyphosate is safe to use in accordance with label directions. NUF will inform the market regarding any material developments.
• AMP Limited (AMP) -1.38% Outgoing CFO Gordon Lefevre has agreed to remain for the 1H 19 result. During the transition period, Mr Moorhead will help the CEO with the completion of AMP’s strategic plan. Mr Moorhead will start as Group CFO on October 1 2019.

ECONOMIC NEWS

• The Australian Industry Group Performance of Manufacturing Index fell from 54.8 points to 52.7 points in May.
• The CBA Manufacturing PMI rose from 50.9 to 51.0 in May. A reading over 50 indicates expansion.
• Bottom fishing? Housing values nationally fell 0.4% last month, compared to a 0.5% decline in April, according to CoreLogic Inc. data released Monday. From a year ago, prices declined 7.3%. Sydney prices have now fallen 14.9% from its peak in mid-2017 and Melbourne prices have dropped a total of 11.1%.

BOND MARKETS

• 2-Year bond yields rise 2bps to 1.12%
• 5-Year yields rise 3bps to 1.18%
• 10-Year yields rise 5bps to 1.51%

ASIAN NEWS

• China’s manufacturing PMI held steady in May at 50.2, according to Caixin.
• Japanese manufacturing activity swung back into contraction in May, a private survey confirmed on Monday. Stocks hit a 5-month low.
• China ‘demands respect’ and blames US for trade talk failure.

EUROPEAN AND US HEADLINES

• JP Morgan slashes forecast for US 10-year Treasuries. 1.75% by year end.
• Morgan Stanley forecasts a recession within a year if the trade war was to get worse.
• Trump hits the West End backs Boris. Awkward for May. Awkward for Queen. May gone on Friday. 3-days of fun for Trump. Pomp and circumstance to the max.
• German chipmaker Infineon Technologies is nearing a deal to acquire US rival Cypress Semiconductor.
• Key Merkel ally quits. More trouble for Germany.70% chance of ECB rate cut by 2020. Easy with hindsight.

And finally……………

To celebrate Trump visit to see the Queen here are some great UK jokes..apart from Brexit.

“I went to my doctor and asked for something for persistent wind. He gave me a kite.” Les Dawson

“I said, ‘It’s serious doctor, I’ve broken my arm in 20 places.’ He said: ‘Well stop going to those places.’ ” Tommy Cooper

“A cement mixer has ­collided with a prison van. Motorists are asked to look out for 16 hardened criminals.” Ronnie Corbett

“I needed a password eight characters long so I picked Snow White and the Seven Dwarfs.” Nick Helm

“About a month before he died, my grandfather covered his back full of lard. After that he went downhill very quickly.” Milton Jones

“I saw this bloke chatting up a cheetah. He was trying to pull a fast one.” Tim Vine

“My mum’s so pessimistic that if there was an Olympics for pessimism… she wouldn’t fancy her chances.” Nish Kumar

Clarence

XXX