ASX 200 rose 16 to 6584 on a quieter days trading. US futures dulled optimism falling  100 points on new Huawei woes. Banks rallied today led by CBA up 0.6%, though NAB slipped 0.4%. AMP was the star of the show, not words you hear often after its well supported placement and sale of the Life business and rallied 11.6%. Miners saw profit taking and some switching into banks with BHP down 0.1% and FMG slipping 1.1%. Gold miners too fell led by NCM down 0.7%. In corporate news, JHX beat estimates and had a positive outlook statement rising 14% REA rose 5.5% after early losses on results and APT rose 6.1% as its US promotions kicked off. Once again, the yuan fix was a focal point, fixing at 7.0136. Enough to keep markets supported. The AUD remains well supported as hopes build for more US rate cuts. RBA’s head honcho fronted a parliamentary inquiry today conceding that zero rates could be a possibility. 10-year bond yields fell 2bps to 0.94%. Asian markets mixed with Japan up 0.6% and China down 0.6%.

Todays Highlights

• ASX 200 up 18 to 6585. Quiet end to week.
• High 6592 Low 6562.
• Index drops 2.73% for the week.
• Banks bubble higher.
• Miners sell off after rises.
• AMP and JHX shine.
• Yuan fix at 7.0136. 11-year low.
• AUD good bounce to 68.09c
• Aussie gold steady at $2212.
• Bitcoin slips to $11850.
• US futures up down 100.
• Asian markets mixed Japan up 0.6% and China down 0.6%.

STOCKS

• JHX +14.05% results and guidance cheer.
• OPT +28.76% final report. Low of 211c High 291c. Volatile.
• AMP +11.56% kicks a goal with cap raise.
• ORE +10.26% lithium squeeze.
• PLS +6.52% short squeeze.
• APT +6.10% US AfterYay Day.
• MOC +2.76% thin volume.
• NIC +8.04% nickel highs.
• IGO +5.31% metal prices.
• RFF -5.73% director buying.
• MGR -3.24% rethink after rally.
• PET -0.69% presentations winding up.
• CIM +0.61% contract win. Bottoming?
• SPX +29.63% substantial shareholder.
• PPS +13.33% revival continues.
• LVT +4.30% co-selling agreement with Microsoft on AI cyber-security.
• REA +5.56% good turnaround after initial fall.
• DOW +2.07% gas contract extension.
• Speculative stock of the day: Nothing.
• Biggest Risers: JHX, AMP, ORE, AAC, NGI, VGI and PLS.
• Biggest Falls: RFF, CQE, BKI, MGR, RSG and MGX.

TODAY

• James Hardie (JHX) +14.05% reports adjusted Q1 NOPAT $90.2m, better than estimates of $82.1m. Revenue of $656.8m and EBIT $124.4m also rose on last year’s numbers and topped estimates, with most of the increases attributable to the North America Fibre Cement division. The company expects FY20 NOPAT of $325-365m, with North America Fibre Cement EBIT margin to be at the top of the 20-25% range. In Australia the company expects net sales will continue to grow above the market, despite predicting the market will experience a high single-digit contraction. The Europe Building Product segment is expected to achieve growth in both net sales and EBIT margin
• REA Group (REA) +5.56% NPAT from core operations missed, coming in at $295.5m versus $313.7m expected. Revenue also missed; $874.9m vs $892.6m. A final dividend of 63 cps was declared, taking the full-year dividend to 118cps, up 8%y/y. The outlook was weak, with listings for H1 of FY20 likely to be lower than the same half last year, due to the comparatively favourable listings environment in H1FY19. As a result, revenue growth is expected to be heavily skewed towards H2.
• News Corp (NWS) +1.27% Q4 earnings. Revenue of 2.47bn came in below expectations of $2.56bn, as did total segment EBITDA at $302m vs $328m expected. EPS of 7c ex-items beat expectations of 3c.

ECONOMIC NEWS

• RBA head teller Philip Lowe says it is “possible” interest rates in Australia fall to zero. Hopes the economy has reached a positive turning point. The RBA has studied QE experiments overseas and admits that it wouldn’t be appropriate for Australia.

Deutsche Bank has delivered the most bearish forecast yet for Australia’s cash rate, predicting the Reserve Bank will cut to a record low 0.25% by the end of this year.

BOND MARKETS

• 2-Year bond yields drop 2bps to 0.71%
• 5-Year yields drop 3bps to 0.66%
• 10-Year yields drop 4bps to 0.94%

ASIAN NEWS

• Chinese factory gate prices fell for the first time in almost three years in July, outpacing forecasts. Factory prices fell 0.3% in July from a year earlier, a bigger decline than the median estimate of -0.1% by economists. The consumer price index rose 2.8% year-on-year, faster than forecast.

• More unrest in Hong Kong as the airport faces a sit in. US has issued a travel warning . Ironic given US mass shootings.

EUROPEAN AND US NEWS

• Premier League kicks off tonight. That came around quickly.
• Italian stocks under pressure on chance of a snap election. Rest of EU markets only mildly weaker on open.
• US administration is holding on issuing licences to US companies wanting to buy Huawei.
• Broadcom is acquiring Symantec’s enterprise security business for $10.7bn in cash
• Uber posts a US$5.2bn loss. That is just in the second quarter. Great business model.
• Turkey has sacked its chief economist at the central bank. This follows a mass sacking of officials over rates policy. Sound like a plan?

And finally…………

A rich Arab walks into a bar and is about to order a drink when he sees a guy close by wearing a Jewish cap, a prayer shawl and traditional locks of hair.

He doesn’t have to be Einstein to know this guy is Jewish.

So he shouts over to the bartender so loudly that everyone can hear:

‘Drinks for everyone in here, bartender, but not for the Jew over there’.

Soon after the drinks have been handed out, the Jew gives him a big smile, waves at him, then says: ‘Thank you’, in an equally loud voice.

This infuriates the Arab.

He once again loudly orders drinks for everyone except the Jew.

As before, this does not seem to bother the Jewish guy. He continues to smile, and again yells: ‘Thank you’.

The Arab asks the bartender: “What’s the matter with that Jew? I’ve ordered two rounds of drinks for everyone in the bar but him, and all he does is smile and thank me.”

The bartender replies: ‘He owns the place’.

 

 

Have a great weekend

Clarence

XXX

\