ASX 200 grinds out a 9-point rise to 6652 in quiet trade. US Futures rose by 53 points. Banks did well today led by NAB up 0.3% and ANZ up 0.6% as results loom. Healthcare too was in the pink as CSL rallied 1.9%. Miners though slipped on lower commodity prices with BHP falling 1.2% and RIO down 1.4%. Energy stocks took a breather with STO giving back some of yesterday’s gains down 2% and WPL down 1% on lower WTI pricing. Conversely QAN gained 2.9% on the lower price. Tech stocks were a little better, XRO up 1.2% and APT up 1.3%. In corporate news, TLS rallied slightly after a messy AGM session with NBN in its sights. NCK warned the market that things were bad and showed no sign of a recovery and promptly dropped 13.7% as SXL joined the chorus of disapproval with a similar warning on advertising and dropped 18.6% dragging NEC in its wake down 6.4% after its recent purchase of MRN. Many funds tied up with the Latitude IPO at 178c which appears to be going ok. In the bond market yields fell slightly on the 10-years to 1.04% and the AUD remains stable at 67.75c. Asian markets were mixed as Japan rose 1.8% though China slipped 0.4%.

Todays Highlights

• ASX 200 up 9 to 6652 in convictionless trade.
• High 6653 Low 6622. Low volume day.
• Banks better, miners slip.
• Healthcare in the pink as energy stocks slip.
• TLS AGM bags NBN.
• AUD slips to 67.76c
• 10-year yields down to 1.01%
• Aussie gold smacked down to $2205
• Bitcoin firms to US$8317
• US futures up 53 points
• Asian markets mixed with Japan up 1.8% and China down 0.4%

STOCKS

• JIN +4.35% buyers back as TAH holds AGM
• COE +4.55% quarterly activity report
• QAN +2.92%% oil price falls.
• EML +3.04% rally resumes.
• FLT +2.60% maybe a turn?
• SXL -18.61% profit downgrade. NEC -6.43% follows suit on MRN buy.
• CUV -5.08% profit taking.
• MSB -6.05% sellers dominate.
• MGG -unchanged- as fund loses 1%
• NGI -10.00% AUM update September.
• SPT +22.70% buyers continue after Shopify announcement.
• PYC +6.90% investor presentation.
• SZL +8.43% follows SPT higher.
• CD2 -6.50% sale of investments and wind up.
• ALC -4.08% recent quarterly brings more sellers.
• Speculative stock of the day: Armour Energy (AJQ) +51.02% after executing a binding farm in agreement with STO.
• Biggest Risers: NEA, CDA, PRU, COE, JIN, FNP and EML
• Biggest Falls: SXL, NCK, NGI, PAR, HT1, NEC and EOS.

TODAY

• Evolution Mining (EVN) -0.45% September quarterly production; gold production came in at 192.0K ounces vs quarter-ago 194.9K. AISC $1,018 per ounce vs quarter-ago $915 per ounce. Gold production guidance for FY20 unchanged at 725-775Koz. AISC guidance for FY20 lifted $50 to $940-990 per ounce, reflecting a $20 increase from revised metal price assumptions and a $30 increase due to stability issues at Mt Rawdon.
• Southern Cross Media (SXL) –18.61% Trading and guidance update; revenue in the first quarter was down 8.5% on year, with declines in both audio and television segments. Expects first-half EBITDA between $60-68m, before accounting adjustments. SXL said cost discipline remains a core focus given challenging market conditions.
• Newcrest Mining (NCM) -0.69% Has approved stage 1 of its Cadia expansion project, which is expected to lift gold and copper recoveries at the site, with an additional 1.8m ounces of gold and 67,000 tonnes of copper production expected. Free cash flow generation of $800m is forecast over the life of the mine.
• Telstra (TLS) +0.85% Has re-confirmed FY20 guidance at its AGM, guidance was updated initially after the NBN Co’s 2020 corporate plan with a 25% reduction in estimated total network connections in FY20.
• Adelaide Brighton (ABC) -1.99% Repeats guidance for FY19, expects underlying NPAT in the range of $120-130m, vs consensus of $122.8m. ABC is also targeting net cost savings of $10m for 2020. The company said it was expecting residential construction to continue to soften, reaching an inflection point in 2021.
• Orora (ORA) –1.62% Warns it’s North American business will be behind at the half-year given tough trading conditions. Chairman Chris Roberts indicates the time will arise for him to step down ‘in the near term’ at AGM.
• Retail Food Group (RFG) –14.71% The company has increased its capital raising from $160m to $190m due to strong demand. It will now issue 1.7bn shares at 10c to raise $170m and a non-underwritten SPP for the remaining $20m through Petra Capital and Shaw and Partners. The largest shareholder, Invesco at 14.5% has agreed to top up to 19.9%. The banks have also agreed to write down $72m of senior debt as part of a new refinancing deal.
• Commonwealth Bank (CBA) +0.30% said that its level 1 common equity tier one ratio was 11.2% at the end of June and its level 2 CET1 ratio was 10.7%.
• Westpac (WBC) +0.14% announced its level 1 common equity tier 1 ratio was 10.5% and estimated that. under APRA’s proposals, level 1 CET 1 capital would fall by around 40bps, or $1.6bn.

ECONOMIC NEWS

• ANZ/Roy Morgan Australian weekly consumer confidence has eased from 112.3 to 110.9.

BOND MARKET

• 2 – year bond yields down 2bps to 0.68%
• 3 – year bond yields down 2bps to 0.70%
• 10 – year bond yields down 3bps to 1.01%

ASIAN NEWS

• China’s annual inflation lifted to 3% in September, from 2.8% in August and above market expectations of 2.9%. Pork prices saw a huge rise due to the African Swine Fever issue that has decimated the pig herds in China. Prices up 64% in September from a year ago. Overall food prices are up 11.2% in September.

EUROPEAN AND US NEWS

• Slight positive start for European markets this morning.
• USA slaps sanctions on Turkey. Not a major issue for Turkey. Given Turkey is a NATO partner it is hard to go too hard. Some extra tariffs on steel (Turkish steel exports to US were already down 89%) and maybe Turkish Delight. Getting complicated over there. Russia backs Syria and sells arms to Turkey, including a defence system against itself(?), It is also a part of NATO and has US fighter planes stationed there. Trade talk deal also suspended but then it was already suspended.
• WeWork says it prefers a rescue from JP Morgan to one from shareholder Softbank.
• Standard Chartered Bank believes that the risks to the gold price remain to the upside. Prices will average US$1,510 an ounce in the fourth quarter of 2019 and US$1,570 in the same period next year according to the bank. Retail investors will be the big driver according to Standard Chartered. One headwind is higher prices are holding off jewelry buyers in China with consumption falling 4% to 660 tones in 2019.
• Big week for Brexit. Big month really.

• Harley Davidson hits production snag for its electric bike.
• Another backer has pulled out of the FB Libra plan with Booking Holdings the latest to pull the pin.
• The man is a genius. Bill Goss, the former king of the bond market, has recommended investors buy dividend paying stocks over negative yielding debt.

And finally……………..

I hate Russian dolls – they’re so full of themselves.

“Apparently smoking cannabis can affect your short term memory. Well if that’s true, what do you think smoking cannabis does?”

Doctor, doctor, I’ve got a strawberry stuck up my bum.

I’ve got some cream for that.

“Most of my life is spent avoiding conflict. I hardly ever visit Syria.”

 

This morning on the way to work I wasn’t really paying attention and I drove into the back of a car at some traffic lights.

The driver got out and it turned out he was a dwarf.

He said, “I’m not happy.”

I said, “Well, which one are you then?”

Clarence

XXX