ASX 200 up 26 points to 6716 with US Futures up 64. This what it feels like when the doves cry. Fed head Powell has unleashed a sugar hit on global markets. Miners and energy stocks were strong out of the gate although banks were more tentative. The market did sell off slightly towards the close with more to come from Powell. BHP rose 0.7% yet perversely FMG slipped 1.3%. Energy stocks regained their mojo slightly as STO rose 1.2% and OSH +2.9%, knocked out the lights. Gold miners were in demand with NCM up 2.1% on bullion price rises. In the tech space, WTC jumped another 3.5% although others were overlooked. Consumer stocks were mixed with COL falling 1.0% and WOW down 0.3%, also out of favour. In corporate news, WHC rose 4.9% after its quarterly report highlighted by higher coal prices and MHJ fell 8.8% after a trading update and a backpay issue In local bonds, yields fell again with 10-year bonds now at 1.33%. The AUD has rallied slightly to 69.70c whilst Asian markets rose on the back of Powell’s comments, Japan up 0.5% and China up 0.5%.

Todays Highlights

  • ASX 200 rises 26 to 6716 as banks remain mixed.
  • High 6729 Low 6686. Healthy volume.
  • Banks mixed and miners push ahead.
  • Gold miners firm on bullion.
  • CSL doing well and TLS up again.
  • Bond proxies and REITs find friends.
  • Energy stocks rally on oil rises.
  • AUD firms to 69.77c as the doves cry.
  • Aussie gold rallies to 2040.
  • Bitcoin falls to $11364.
  • US futures up 64.
  • Asian markets were better with Japan up 0.5% and China up 0.5%.

STOCKS

  • PET -5.67% rare down day.
  • EML +5.41% BNPL in demand.
  • CUV +3.21% newsletter.
  • ISX +2.80% BNPL
  • VOC -2.56% dead as a dodo with ACCC fine.
  • JIN -3.04% profit taking.
  • PTM -3.40% broker downgrade.
  • AVH -1.15% follows PNV down.
  • RMS +5.06% RSG +9.75% SBM +2.88% golds better.
  • WTC +3.54% all-time highs.
  • NET +5.66% JV in China.
  • CRN +3.88% higher coal prices.
  • LVT +7.77% comeback from the dead.
  • M7T +6.67% continues higher.
  • COE +8.74% industrial supply agreement for Sole gas.
  • ALL +1.01% lower dollar.
  • ANZ -0.76% APRA capital requirements.
  • APT -0.39% Goldman cuts rating.
  • Speculative stock of the Day: New IPO Quickfee (QFE) +150.00% on its debut. QFE has developed a unique payment gateway for Australian accounting and law firms to allow monthly payment plans to accept fees. BNPL for law and accountants.
  • Biggest Risers: RSG, COE, EML, PME, RMS, WHC and SAR.
  • Biggest Falls: CVW, PET, OMH, SGM, PTM, EHL, HLO.

TODAY

  • Whitehaven Coal (WHC) +4.93% report FY Run-of-mine (ROM) coal production of 23.2Mt, beating guidance of 21.8-22.8Mt. FY saleable coal production of 19.8Mt fell short of the guided 20.5-21.0 Mt, with the company noting a large ROM stock build. June quarter production numbers showed managed ROM coal production, managed saleable coal production and managed total coal sales all higher than a year ago.
  • Netwealth (NWL) +3.66% report Q4 funds under administration (FUA) of $23.34bn as at June 30, up from 21.06bn on March 31. Net FUA flows of $1.51bn for the quarter exceeded the prior quarters $890m. Funds under management (FUM) of $3.95bn has been recorded, up from $3.52bn last quarter. Net FUM flows of $301m also exceeded the prior quarters $178m. The company is confident of continues FUA growth during FY20 and beyond.
  • Michael Hill International (MHJ) -8.77%% have launched an employee remediation program after a review of its Australian retail employment contracts and rostering practices found evidence of non-compliance with the General Retail Industry Award. The program has an estimated one-off cost of $10-25m.
  • Virgin Australia (VAH) -2.94% is pressing ahead with its intention to list its Velocity Frequent Flyer program on the ASX. Virgin and its exiting co-investor Affinity Equity Partners are full-steam ahead and it is being reported that Virgin’s bankers have the IPO path well advanced. Fund managers have been told to expect to meet Velocity and its management team soon after Virgin’s upcoming annual earnings result. This morning VAH have confirmed Affinity is looking at potential exit options from its 35% stake in the Velocity Frequent Flyer program.

ECONOMIC NEWS

  • Nothing locally.

BOND MARKETS

  • 2-Year bond yields down 3bps to 0.95%
  • 5-Year yields down 3bps to 0.99%
  • 10-Year yields down 2bps to 1.33%

ASIAN NEWS

  • Nintendo have announced a cheaper version of its console sending the shares to a nine-month high.
  • Subtlety is not the US President’s strong point. He has now met with a Hong Kong activist and signalled support for pro-democracy protesters in the former UK territory. Nothing like stoking the flames. Follows the arms sales to Taiwan.

EUROPEAN AND US NEWS

  • Energy major BP’s chief executive said the Senegalese authorities have begun “investigations” into the government’s award of lucrative offshore gas licences. Maybe a negative for WPL too.
  • Fed chief Powell has said the Facebook currency Libra does raise serious concerns for central banks.
  • UK Ambassador to the US, Darroch has been ‘thrown under the bus’ and has resigned.
  • Amazon is now the fastest growing music streaming service outdoing both Spotify and Apple.
  • It just gets worse. Sovereign debt in emerging European markets has now joined the negative yield club. Czech Republic, Hungary and Poland now charge you to lend them money. Let’s think about that for a while. No wonder Merkel has been seen shaking again.
  • Trading volumes on the LME are down around 7% this year. Must be the recent booze ban.
  • Iran has tried to seize a UK oil tanker in the Persian Gulf.
  • Deutsche Bank is facing a US Department of Justice probe over 1MDB.

And finally………….

A farmer went to a local bar and ordered a glass of champagne.  The woman sitting next to him said, “How about that?  I just ordered champagne too!

“What a coincidence,” the farmer said.  “This is a special day for me. I’m celebrating.”

“This is a special day for me too, I am also celebrating,” said the woman.

“What a coincidence!” said the farmer.  As they clinked glasses he added: “What are you celebrating?”

My husband and I have been trying to have a child and today my gynecologist told me that I am pregnant!”

“What a coincidence!” said the man.  “I’m a chicken farmer and all last year my hens were infertile, but today they are all laying eggs again!”

“That’s great!” said the woman, “How did your chickens become fertile?”

“I used a different cock,” he replied.

The woman smiled, clinked his glass and said, “What a coincidence!”

 

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Clarence

XXX

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