ASX dropped 22 to 6568 as selling pressure finally took its toll. Could have been worse and at one stage it was positive. US futures up 60 with Asian markets weaker. Banks were the soft spot today led by CBA down 0.6% and NAB down 0.3% ahead of its trading update tomorrow. Miners fared better as buyers stepped back in as iron ore stabilised. FMG rose 3.6% and RIO put on 0.6%. Elsewhere gold miners were in demand as bullion rose on haven buying with modest rises, EVN up 1.9%. Healthcare was sloppy as CSL fell 1.5% and COH down 3.4% on a broker downgrade. Consumer discretionary stocks also under pressure as ANZ-Roy Morgan consumer numbers underwhelmed. In corporate news, CGF rose 2.5% after keeping the market happy although well off its daily high. MFG in a trading halt as it raises money to pay for IPO costs for its High Conviction Fund opening soon and to be listed on the ASX. In economic news, business confidence was muted so too was the much-vaunted consumer confidence which is showing some signs of life but not much. 10-year yields down to 0.94% a loss of 2bps. Asian market weaker with Japan down 1.2% and China down 1% as Carrie Lam faces the press and fails to answer the tough questions.

Todays Highlights

• ASX 200 down 22 to 6568. 4.7% below intra-day high.
• High 6593 Low 6558. Narrow range. Good volume.
• Miners find friends. Bank under a little pressure.
• Healthcare and consumer stocks sold down.
• Gold miners show modest rises. RSG trade in focus.
• Yuan fix at 7.032. Creeping up slowly.
• AUD slips to 67.63c
• Aussie gold rises to $2241
• Bitcoin slips to $11347.
• US futures up 60
• Asian markets weaker with Japan down 1.20% and China down 1.02%

STOCKS

• ORE -6.41% GXY -5.79% Don’t cry for me Argentina.
• RSG -2.57% block trades by UBS.
• FMG +3.59% bargain hunting after rout Monday.
• JIN +3.99% jackpots helps as would a spinoff of lotto business.
• SLR +1.98% RMS +6.40% PRU +6.06% rise of gold continues.
• DDR +3.42% dividend.
• BVS +2.08% change in substantial holding.
• CYB -6.20% UK woes.
• AMP -2.69% major restructure at AMP Capital
• NWS +0.61% broker upgrades.
• CTD -3.76% Thomas Cook issues in London not helping sentiment.
• PDL -3.13% chalk and cheese with MFG.
• CMM +18.42% capital raising to accelerate developments.
• PPS +3.81% broker update.
• AFG -7.05% profit taking after big rise yesterday.
• Speculative stock of the day: Metalsearch (MSE) +71.43% good volume following news it was acquiring a high purity alumina project in QLD, Abercom HPA. The acquisition will be funded by cash and shares.
• Biggest Risers: RMS, PRU, JIN, FMG, DDR and MP1
• Biggest Falls: PET, GMA, OPT, ORE, CYB, GXY and NGI

TODAY

• Challenger (CGF) +2.46% Full-year results; normalised NPAT came in at $396m vs consensus of $400.4m. Group assets under management lifted 1% to $81.8m. Normalised NPBT came in at $548m, towards the bottom end of the $545-565m guidance range. A final dividend of 18c per share was declared, bringing the full-year dividend to 35.5c per share. A dividend payout ratio of 54.2% was ahead of CGF’s target range. CGF expects challenging conditions to persist for domestic sales in FY20, normalised net profit before tax target of $500-550m reaffirmed as well as a full-year dividend of 35.5c. Return on equity (ROE) target has been revised to the RBA cash rate plus a margin of 14% for FY20.
• Magellan Financial Group (MFG) – Reports full-year adjusted NPAT of $364.2m vs consensus of $354.7m. Average FUM up 28% to $75.8bn. Total dividends for the year up 38% to 185.2c. Magellan also today announced that it is undertaking a fully underwritten institutional placement to raise $275m at 5520c. The funds will be used to launch Magellan High Conviction Trust IPO, a new retirement product and seed other investment strategies.
• Monadelphous Group (MND) -1.32% Awarded $60m contract to provide maintenance services to Rio Tinto on its privately-owned rail network in Western Australia.

ECONOMIC NEWS

ANZ Roy Morgan Weekly Consumer Confidence Index fell 0.3% to 115.5 points.

NAB Business Survey for July: Conditions +2, down from +4 in June; Confidence +4, up from +2 in June.

BOND MARKETS

• 2-Year bond yields up 1bps to 0.72%.
• 5-Year yields unchanged at 0.67%
• 10-Year yields down 2bps to 0.94%

ASIAN NEWS

• Every cloud has a silver lining. Shenzhen Airport stock soared following the closure of Hong Kong yesterday.
• Singapore has slashed its GDP forecast as trade woes continue. Singapore’s economy now is seen growing 0.0%-1.0% this year, down from a previous projection of 1.5%-2.5%
• Carrie Lam (HK CEO) has defended police in the protests in HK and has avoided direct questions in a HK press conference.

EUROPEAN AND US NEWS

• The US yield curve is at its flattest since 2007. Sovereign bonds rally.
• Argentina now a flashpoint as currency and index falls on shock election results and threat of default rises. Again.
• Muted start to European trade sessions.
• Seen everything? Maybe not. A Danish Bank is offering home loans with a negative interest rate. That is right with demographic changes borrowers get paid to borrow money for a house.
• Italy is getting interesting too. Senate recalled for no-confidence vote.
• Morgan Stanley has suggested the Fed rate could return to zero. The central bank race to zero continues.

And finally………………

My wife first agreed to a date after I gave her a bottle of tonic water. 

I Schwepped her of her feet.

“It’s inappropriate to make a ‘dad joke’ if you’re not a dad. It’s a faux pa.”

There’s been an explosion at a cheese factory in Paris. 

There’s nothing left but de Brie.

 

I got an e-mail saying, “At Google Earth, we can read maps backwards!” and I thought…

“That’s just spam.”

Clarence

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