ASX 200 bounces hard from early losses up 49 points to 6568. 100-point range today. Yuan fix below forecast cheers again. Dow Futures up 126 points. Remarkably mining stocks led the way despite iron ore falls, with BHP up 1.5% and FMG up 4.1%. Even S32 joined the resource party up 2.2%, but RIO missed out down 1.09%. Gold miners rose again as bullion soared through $1500. NCM rose 4.1% and GOR up 8.36%. Banks were negative all day until the final close out with CBA up 0.3% Healthcare rose with CSL bouncing 1.8% and TLS added to the rally rising 2.3% as a defensive play. REITs took heart from MGR up 6.6% although insurers were under some pressure after the IAG results led to a 4.9% fall. AMP suspended, so we wait to see how the capital raise goes. In corporate news, RFF answered the critics and rallied 41.1% although Bonitas was back with another shot across the bow. TCL fell 0.3% after a return to trade and its own capital raise. OEL rallied 18.2% on a good drill result and KMD surprised retail watchers with a positive update and rose 14.3%. The key to the turnaround was the yuan fix at 11.15am, 7.0039. Better than expected export numbers from China helped too as did some in the know commentators from China saying any devaluation would be very slow. Nickel jumped in Asia as Indonesia mulls export bans. AUD firms to 67.71c and 10-year bond yields were unchanged. Asia markets boosted as calm descends, Japan down 0.08% and China up 0.92%.

Today’s Highlights

• ASX 200 up 49 to 6568
• High 6568 Low 6462. Huge range, good volume.
• Resources rally. Banks under pressure but finish up.
• AMP trading halt.
• Results mixed.
• AUD good bounce to 67.71c.
• Aussie gold steady at $2215.
• Bitcoin higher at $11903.
• Dow futures up 126
• Yuan fixed at 7.0039
• Asian markets bounce Japan down 0.08% and China up 0.92%.

STOCKS

• ISX +16.07% Visa deal.
• OPT +9.71% follow up from yesterday’s rise.
• WSA +8.11% short squeeze on nickel price jump in Asia. Indonesian ore policy unclear.
• ORE +6.64% GXY +10.92% lithium optimism.
• PET +7.01% warm glow continues.
• PNV +8.81% Singapore approvals.
• GOR +% gold price hike.
• SYR +4.43% ceasing to be a substantial shareholder.
• BRG +5.16% broker research.
• A2M -3.48% becoming a substantial shareholder
• CIM -1.90% sell-off continues.
• PLS +8.24% lithium turnaround on Livent comments on outlook.
• TWE +0.06%% big range, attacked by HK shorter and denies.
• MOC +6.37% newsletter write up perhaps.
• BHP +1.50% approves US$283m gas expansion.
• LLC +0.72%% second class action.
• Speculative stock of the day: Nothing on volume.
• Biggest Risers: ISX, PNV, GOR, PLS, WSA and PET
• Biggest Falls: IAG, AGL, JMS, A2M, WPP and PPC

TODAY

• AMP Limited (AMP) report 1H underlying NPAT of $309m, below expectations of $337m. Statutory NPAT came in at $2.29bn, largely impacted by the write-down of goodwill and capitalized costs, and the reduction in the carrying value of advice registers. Total AUM rose 17bn in the half up to 275bn. Cost-to-income of 60.2% significantly higher than the 45.9% a year ago. A revised agreement to sell AMP Life for $3bn to Resolution life was announced. The sale is expected to be completed in 1H20. The company are also raising $650m at 150c a share to make the company a simpler, higher growth and higher return business focused on clients.
• AGL Energy (AGL) -4.60% report FY NPAT of $1.0bn as expected. FY revenue topped expectations at $13.25bn and underlying EPS came in at 158.6c. A final dividend of 64c has been announced. The company will undertake an on-market buy-back of up to 5% of its share capital over the next year and expects FY20 to be impacted by operating challenges including increasing costs and the re-regulation of retail electricity standing offer prices. Underlying profit after tax in FY20 is expected to be $780-860m.
• Insurance Australia Group (IAG) -4.95% report FY NPAT attributable to shareholders of $1.08bn, up from $923m a year ago. Revenue of $17.66bn was above guidance, as was total gross written premium (GWP) of $12.0bn. Reported insurance margin of 16.9% was within the guided range. A 34c dividend was announced, up 2c from last year. The company expects ‘low single digit’ growth GWP growth in FY20, and a reported insurance margin of 16-18
• Mirvac Group (MGR) +6.58% report FY operating NPAT of $631m, up from $608m a year ago. FY OEPS came in at the top end of guidance at 17.1c, while statutory NPAT fell 6.5% from last years number to $1.02bn. NTA of 250c reported. The company expects FY20 OEPS to be 17.6-17.8c, and a dividend of 12.2c.
• Kathmandu (KMD) +14.29% trading update. Based on FY19 unaudited results KMD expects total sales growth of 9.6%, up to NZ$545m, and same store sales growth of 0.6%. Growth in the Australian stores is doing the heavy lifting with a 2.7% rise in sales expected, while New Zealand sales are expected to be down 3.9%.

ECONOMIC NEWS

• House prices in Sydney have risen in each of the past two months, according to CoreLogic Inc. Prices also rose in Melbourne, Brisbane, Hobart and Darwin last month.

• China Jan – July CNY denominated exports to US down 2.1%.

• Exports up 3.3% YoY Imports down 5.6% YoY.

Imports YoY

Balance of Trade

• Chinese Trade Surplus – US$45bn v estimates of US$40bn – Surprisingly firm.

BOND MARKETS

• 2-Year bond yields rise 2bps to 0.73%
• 5-Year yields rise 2bps to 0.68%
• 10-Year yields unchanged at 0.96%

ASIAN NEWS

• Growth in the Philippines slowed to a more than four-year low in the second quarter of 2019.
• Japan has approved shipments to South Korea of a key material used in making computer chips. S Korea keeps Japan on White List.
• Pakistan suspends trade with India. This trade war stuff is catching.

EUROPEAN AND US NEWS

• European futures showing positive openings across the region.
• Deutsche Telecom results in line and confirms guidance.
• Weaker rates hurt US banks.

• US agencies barred from buying Huawei, XTE, Dahua and Hytera.

And finally…

A woman gets on a bus with her baby. The driver says: “Ugh, that’s the ugliest baby I’ve ever seen.”

The woman walks to the rear of the bus and sits down, fuming. She says to the man next to her: “The driver just insulted me.”

The man says: “You go up there and tell him off. Go on, I’ll hold your monkey for you.”

 

A man walks into a bar and orders a drink. Then he notices there are pieces of meat nailed to the ceiling of the bar so he asks the barman what they are for. The barman replies, “If you can jump up and pull one of them down you get free beer all night. If you fail, you have to pay the bar £100. Do you want to have a go?”

The man thinks about it for a minute before saying, “Nah, the steaks are too high!”

Clarence

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