ASX 200 fell 24 to 6649 as selling accelerated after lunch before a stronger close in the banks. Below average trade again. Still searching for direction. US futures down 79 points. Broad based losses with energy and big miners under pressure with BHP down 1.5% FMG down 1.7% and S32 down 1.6%. Banks were mixed at the close, WBC down 0.36% and CBA up 0.1%. Big day of losses from MFG down 4.9% following a broker downgrade. Energy stocks under pressure too after WPL fell 2.7% and STO down 1.7% on production reports. Bright spots in gold miners today after bullion rises with SLR up 11.7% and EVN up 5.2%. In economics, jobs number were out and slightly disappointing at 5.2% with only 500 jobs created. On the corporate front, CIM fell 19% after results missed expectations and ‘warned’ that the second half would be better. LLC won a large contract to build housing on Google land in the US and rallied 4.75%. In Asian markets, Japan fell % and China down %. 10-year bonds yields down again to 1.34%. AUD steady at 70.10c.

Todays Highlights

• ASX 200 fell 24 to 6649
• High 6670 Low 6631. Quietish trade again.
• Miners and energy lead falls.
• Banks stage late recovery to end mix.
• LLC wins Google contract.
• CIM collapses on weak numbers.
• 10-year bond
• AUD 70.17c
• Aussie gold higher at $2027.
• Bitcoin rallies to $9750.
• US futures down 79.
• Asian markets mixed with China up 0.16% and Japan down 0.31%

STOCKS

• MFG -4.88% broker downgrade
• MEZ +4.44% up again 8k shares traded.
• LLC +4.75% Google contract.
• CVN +3.57% Dorado 3 drilling.
• PNV +2.77% heading higher.
• DDR +3.87% going vertical.
• SYR -4.27% broker downgrade
• ECX -5.99% optimism running out.
• BUB -3.38% profit taking.
• OSH -4.45% PNG issues.
• RRL -3.05% quarterly.
• MGX -3.74% investor presentation
• CRN -3.06% quarterly report
• SLC -5.71% chairman’s letter – downgrade
• PAN -2.86% conference presentation.
• PO3 +9.69% kicking higher again.
• LVT +6.25% bounces back.
• CAT +3.92% back on the podium.
• Speculative stock of the Day: Imagion Biosystems (IBX) +155.00% after announcing it had received notification from the CDRH and FDA that its MagSense system for testing for breast cancer had qualified as a breakthrough device.
• Biggest Risers: SLR, WSA, EVN, SAR, LLC and NST
• Biggest Falls: CIM, ISX, ECX, BPT, MFG, OSH and PLS.

TODAY

• South32 (S32) -1.65% report Q4 production. Revenue equivalent production grew by 10% in the June quarter and 3% for the FY. Metallurgical coal was one of the main figures, coming in at 1.28m tonnes and beating expectations of 1.18m tonnes. Production expectations were exceeded at the Cannington, but missed at South Africa Energy Coal. The company says it has received bids for its South Africa energy coal unit, and has begun reviewing options for its manganese alloy smelters. US$20m of post-tax restructuring charges are expected in the FY19 result.
• Santos (STO) -1.70% Q2 activities report. Revenues fell by 5% on last quarter, down to US$959m. Sales for the quarter fell by 2%, down to 22.4m barrels, despite production rising by 1% to 18.6m barrels. Net debt fell by $0.3bn, down to 3.1bn. 1H19 production was up 32% and revenues were up 18%. STO have cut 2019 sales guidance to 90-97m barrels, and production guidance to 73-77m barrels.
• Woodside Petroleum (WPL) -2.72% report Q2 production of 17.3MMboe, down from 22.1MMboe a year ago. Total revenue for the June quarter came in at 836m, a fall of 27% from a year ago, with sales revenue falling 32% over the same period. Product sales dropped to 17.0MMboe from 21.0MMboe a year ago. Q2 capex was $299m, down from $347m a year ago. The company blamed a fall in LNG output due to maintenance shutting down its Pluto operation temporarily and lower prices of fuel for the drop in revenues.
• Lendlease (LLC) +4.75% sign a deal with Google to develop 3 ‘mini-communities’ in Silicon valley over the next 15 years. The deal is worth approximately US$15bn and will involve the development of 15,000 residential units on land owned by Google. Works on the project could start as soon as 2021.

ECONOMIC NEWS

• In June 2019, trend monthly employment increased by around 26,000 persons. Full-time employment increased by 15,000 persons and part-time employment increased by 11,000 persons respectively.
• The trend monthly underemployment rate remained steady at 8.3% in June. Australia’s trend participation rate increased to 66.0%.

SEASONALLY ADJUSTED ESTIMATES – This is the one the media will focus on.

• Employment increased 500 to 12,871,700 persons. Full-time employment increased 21,100 to 8,815,600 persons and part-time employment decreased 20,600 to 4,056,100 persons.
• Unemployment increased 6,600 to 711,500 persons.
• Unemployment rate remained steady at 5.2%.
• Participation rate remained steady at 66.0%.
• Monthly hours worked in all jobs decreased 0.1 million hours to 1,773.9 million hours.

ASIAN NEWS

• The Bank of Korea cut rates for the first time since 2016.

Japan is showing the effects of the trade war

• Exports to Asia down 8.2% YoY. Exports to China down 10.1% YoY. Exports to US up 4.8% YoY

EUROPEAN AND US NEWS

• European markets are showing a sloppy negative opening on futures.
• EU launches an anti-trust probe into Amazon. Digital tax is on the way. France leading.
• Novartis Q2 results sales US$11.76bn above expectations. Q2 income US$2.11bn. Operating income US$3.65bn. Q2 Net profit US$6.8bn New gene therapy drug is the most expensive in the world at US$2m. An entirely new way to treat serious disease. Lifted guidance too.
• SAP profits miss forecasts. Trade war taking its toll.
• The IMF believes that the USD is overvalued by between 6-12%. Euro and yuan are about right.
• Libra continues to cop it from G7 leaders and France ramps up the heat on tech companies. The big concern with Libra is how many people would use it given the reach of FB. Bigger issues.
• The world gets weirder and weirder. A German fintech N26 is now valued at US$3.5bn. Europe’s most valuable. It does not view profitability as a ‘core metric’.
• 148^th British Open tees off this morning at Royal Portrush. 68 years between drinks for the course. 235k spectators expected.

And finally…a call out for more jokes however inappropriate ..I am not very PC and hard to offend I promise..I may share I may not..

“Would the gentleman on the woman’s tee back up to the men’s tee please!”

I could feel every eye on the course looking at me. I was still deep in my routine, seemingly impervious to the interruption.

Again the announcement: “Would the man on the woman’s tee kindly back up to the men’s tee.”

I simply ignored the guy and kept concentrating, when once more, the voice yelled, “Would the man on the woman’s tee back up to the men’s tee. please?!?!”

 

 

 

Clarence

XXX