ASX 200 finished down 3 to 6544 after initial optimism waned and Hong Kong protested. US Futures were down 23 points. A good bounce on the open after yesterdays stunning gains saw profit takers move in especially to the banks with CBA down 1.3% and ANZ down 1.4%. Material stocks held up well on the iron ore bounce as did consumer staples. BHP up 2.7% and FMG 6.3 % the stand outs in the miners and WOW up 0.5% and COL up 1.7% doing well too. Healthcare stock came under pressure led by CSL down 2.2% and COH down 2.3%, both of whom have large Chinese exposure. In corporate news, WES fell 0.8% after announcing the acquisition of Catch Group for $230m. APT came back online after its $300m plus placement was done at a higher price due to popular demand. Up 6.1%. EHL was a big winner today up 14.3% after an earnings upgrade and BLY announced directors and management have taken a placement from major shareholder Ares Management, selling 2.1bn shares or 8%. In macro news, Hong Kong saw more protests and a crucial bill debate postponed. Asian markets were weaker with HK down 1.74% and China down 0.45%. Japan down 0.35%.AUD steady at 69.45c.

Todays Highlights

• ASX 200 fell 2 to 6544. Optimism wanes on Asian moves.
• High 6587 Low 6444. Closes on lows.
• Iron ore miners in focus on ore rises and stimulus hopes.
• Banks ease on profit taking.
• CSL slips and REITS under a little pressure.
• AUD drifts lower to 69.48c
• Aussie Gold slightly better at $1917 on HK protests.
• Bitcoin slightly better to US$7981
• US futures down 23
• Asian markets weaker with Japan down 0.1% and China down 0.8%

STOCKS

• EHL +14.24% earnings update.
• APT +6.08% capital raising flys out the door.
• DDR +7.33% launches new financial division.
• BRN +21.31% positive announcement on neural networking.
• CIA +4.18% iron ore price rise.
• CVN +0.91% renewed buyers on Dorado 2 hopes.
• PGL -8.07% not so today.
• AUB -5.61% investor presentation.
• TLS +0.53% hanging tough.
• FLT -2.22% consumer sentiment weighs.
• KGN -2.73% not the catch of the day today
• ED1 -8.05% confidence escaping rapidly.
• BLY +50.00% major shareholder sells out.
• MAH +14.71% Telfer contract.
• DUB +10.04% Live with Spark NZ.
• AD8 +7.76% rally continues.
• SAR +% AUD gold price rise.
• Speculative stock of the Day: TV2U (TV2) +33.33% acquisition of Talico Technologies. Abandons $2.5m capital raise as the acquisition will generate the cash it needs to grow.
• Biggest Risers: EHL, FXL, DDR, ASL, SAR and FMG.
• Biggest Falls: PGL, SST, AUB, CGF, Z1P, BAP and KGN

TODAY

• Sky Network Television Limited (SKT) –1.75% Blair Woodbury appointed CFO, effective June 19. He will take over from interim CFO Andrew Dick.
• AMA Group (AMA) +3.20% Has confirmed earnings guidance for FY19, normalised EBITDA expected to be around $58m. AMA also provided an acquisitions update; current pipeline to be completed by June to contribute more than $120m in revenue and $12m EBITDA once fully integrated.
• Pengana Capital Group (PCG) –1.15% FUM as at May 31 of $3.257bn, down 2.2% from April.
• Emeco (EHL) +14.24% Has provided a guidance update at its investor presentation. Operating EBITDA expected to be in the range of $211m-213m in FY19. EBITDA margin expected to fall between 46 and 47%. EHL said market conditions remain positive and the outlook for FY20 remains solid.
• Wesfarmers (WES) –0.80% To acquire online retailer Catch Group for $230m, to fast track the company’s digital and e-commerce capabilities. The takeover is subject to approval by the ACCC.
• Afterpay Touch (APT) +6.08% Has completed its capital raising of $317.2m via an institutional placement at 2300c per share.

ECONOMIC NEWS

• ANZ Roy Morgan weekly consumer confidence fell 2% after falling 1.4% in the prior week. It appears the recent RBA rate cut hasn’t provided a significant boost to confidence.
• Westpac Melbourne Institute consumer confidence index fell 0.6% to 100.7 in June 2019.

BOND MARKETS

• 2-Year bond yields down 2bps to 1.04%
• 5-Year yields down 2bps to 1.09%
• 10-Year yields down 2bps to 1.43%

ASIAN NEWS

• Chinese Data out today: PPI up 0.6% in line with estimates.

• CPI up 2.7% again in line. food inflation jumped to a near 7-1/2-year high of 7.7% in May from 6.1% in April, as prices of pork surged 18.2% on African Swine Fever effects on the pork industry.

• Hong Kong has seen more protests today against the proposed new extradition treaty with China. The controversial bill was set to go to a mammoth debate today but was pulled. At risk is the ‘special status’ that Hong Kong has enjoyed since the 1997 handover. ‘One country, two systems’ has been the magnet for investment and the gateway to China that Hong Kong offered. There are reasons now to believe that this is in danger and the stock market fell today as a flight to safety from international investors took hold. The Hong Kong market fell 1.7% today with banks and China based companies listed in HK, the main losers. Is the special status that HK enjoys under threat?
• Nintendo’s fell on Wednesday after the Japanese video game maker delayed the launch of a key title until next year.
• Japan’s core machinery orders grew at their fastest rate in over six months in April.

EUROPEAN AND US HEADLINES

• KKR has bid EUR63 in cash for Axel Springer. Must be Jerry’s brother.
• Trump says that he is the one holding at the trade deal with China. He said they desperately want a deal, but he only wants one if it is on the same terms that had been agreed. He also has a secret deal with Mexico that saw the tariffs taken off the table at least for the time being.
• US Soy exports fell 18% in 2018 on trade wars with China.
• Slack Technologies is expected to list with a US$16bn-US$17bn valuation. In its last private funding round in just August 2018, it was valued at US$7bn.It will kick off life under the ticker code WORK on June 20^th on the NYSE. Revenue is expected to be around US$590m in 2020.
• US anti-trust chief has issued a warning to tech giants that lower prices and free stuff will not make them immune to investigation.
• Are these guys trying the products? Venture Capital has invested US$1.3bn so far this year in the cannabis industry.

• Talking of that, Elon Musk has predicted a record quarter for Tesla. Demand for Model 3 is not a problem. But he gave no production targets.
• In the Womens World Cup, USA 13 Thailand nil. And that is a football score.
• Boris is on track for a 140 seat majority at a General Election in the UK if called according to an exclusive poll in the Telegraph. Leaving ready or not seems to be the winning mantra.
• Finally how many credit cards do you eat a week? I know I would happily eat mine sometimes but it seems that researchers have found we all eat the equivalent of one credit card a week in plastic. No wonder Afterpay is so popular.

And finally…………

Clarence

XXX