Thursday 14th November – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX rises 37 points to 6735 after jobs number stirs rate cut hopes. US Futures down points. A kick in the market following slightly disappointing economic numbers showed the economy slowing and potential for the RBA to cut again. 10 -year yields dropped 10bps to 1.18% and the AUD came under pressure at 68.00c. Despite some reports of trade deal issues with agricultural products (that was supposed to be the low hanging fruit), the market pushed up led by the banks, consumer and tech stocks. AGMs still in focus and any guidance reaffirmation is rewarded with solid buying. NEA rose 14.1% after its AGM, APT basking in the numbers yesterday put on 7.5%. EHL another winner up 10.2% after its AGM and reaffirmation, even GNC rose 4% after cutting its dividend and revealing the impact of the drought. Banks rose with CBA up 0.7% and WBC up 0.5%. NAB dropped 3.4% but did lose the dividend, around 8 index points, and MQG back in the green, up 0.5%. In the miners the big news was Andrew McKenzie (little Mac) announced his retirement from BHP. The stock fell 0.02% out of respect for the excellent job he has done. RIO rose 0.4% and FMG up 0.9% bouncing back after recent heavy selling. Consumer stocks gained on the bad jobs number, WES up 0.8% and WOW up 2.3%. Tech stocks did well led by NAN up 6.1% and NEA up 14.1%. In economic news, Jobs data was disappointing at a headline rate of 5.3%. Asian markets continue to be worried by the troubles in HK with China up 0.1% and Japan down 0.8% with data disappointing from both countries. Hong Kong down 0.9%.

Todays Highlights

ASX 200 up 37 to 6735. Average volume.
High 6744 Low 6688.
NAB ex div. Banks firm generally.
BHP CEO to retire.
Jobs data disappoints. RBA rate cut back on agenda?
Tech stocks shine and AGMs in focus.
10-year bond yields weaker at 1.18%
AUD lower at 68.00c
Aussie gold higher as dollar falls at $2155
Bitcoin falls to US$8707
US futures down 35 points.
Asian markets mixed on continued HK unrest with China up 0.04% and Japan down 0.8%.

STOCKS

BHP -0.02% Little mac to retire, now Henry I.
AVH -7.09% placement weighs.
CGC -3.64% drought continues.
PAN -20.69% production issues put IGO t/over in doubt.
NEA +14.06% AGM comments.
EHL+10.22% reaffirms guidance.
DTL +2.92% broker upgrades on AGM comments.
JIN +3.65% good bounce.
APT +7.49% broker upgrades.
CEN +4.37% monthly operating report
APE -8.02% econimc slowdown bites used car salesmen.
GEM -17.76% downgrades and sells centres.
PNR +13.33% good drilling results from Daisy South
SYR +9.09% bargain hunting continues.
WES +0.96% chairmans address positive sales momentum.
OSH +0.14% drilling commences at Gobe Footwall.
Speculative stock of the day: Immugene (IMU) +35.48% AGM presentation continues to draw buyers.
Biggest Risers: NEA, EHL, VGI, APT, NAN, AUB, BRG and MYX
Biggest Falls: GEM, APE, AVH, PGH, CGC, NAB, IFM and SFR

TODAY

BHP Group (BHP) -0.05% CEO Andrew Mackenzie (Little Mac) to retire effective December 31. Current President of Operations – Minerals Australia Mike Henry has been appointed his successor and will commence the role on January 1.
G8 Education (GEM)-17.76% provides trading update at AGM. FY underlying EBIT guidance has been downgraded from $140-145m to $131-134m. The company has seen a $7m revenue shortfall to their target of mid 1% occupancy growth which has a significant consequential effect to EBIT due to the seasonal earnings profile of the company. Wages for the period are also expected to be around $3m above previously forecast.
Nearmap (NEA) +14.06% provides trading update at AGM, guides FY20 ACV will be inline with forecasts of $116-120m. The company expects the first enterprise sales of AI content in Australia and North America in 2H20 thanks to commercialization in MapBrowser.
Emeco Holdings (EHL) +10.22% provide H1 EBITDA guidance of $118-120m, ahead of the $117.0m expected, while anticipating further earnings growth in H2.
A.P. Eagers (APE) –8.02% provide trading update at AGM. National new vehicle sales rose 8.0% to 10m, while underlying operating PBT rose 6.0% on year. EasyAuto123 improved year on year but delivered a $2.5m loss. The company is on track to deliver its target of $30.0m in synergy savings within 12 months.
GrainCorp (GNC) +4.04% reports FY underlying NPAT of $81.7m, shy of the $84.3m expected despite revenue coming in ahead of expectations at $4.85bn (vs $4.77bn). Underlying EBITDA also fell short of expectations at $68.5m (vs $76.7m), while Statutory NPAT came in at $113m.

ECONOMIC NEWS

Australia’s trend unemployment rate remained steady at 5.3% in October 2019. AUD hits a one-month low.
In October 2019, trend monthly employment increased by around 12,300 people. Full-time employment increased by around 5,800 people and part-time employment increased by around 6,500 people.
The seasonally adjusted unemployment rate increased by 0.1% to 5.3% in October 2019, while the underemployment rate increased by 0.2% to 8.5%.

BOND MARKET

2 – year bond yields down 7 bps to 0.76%
3 – year bond yields down 8bps to 0.80%
10 – year bond yields down 9bps to 1.18%

ASIAN NEWS

Chinese unemployment rate fell slightly to 5.1% in October. Investment grew at the slowest pace since at least 1998. Retail sales expanded 7.2%, compared to a projected 7.8% increase. Maybe all waiting for Singles Day?
Chinese Industrial output rose 4.7% from a year earlier,
Hong Kong gets better and better. Second profit warning from Cathay Pacific. Schools and MTR closes.
Tencent misses estimates.Alibaba to list in HK.
Japanese GDP fell 0.2% in the three months to September. Economists were forecasting 0.9% expansion.

The Japanese government has called for more spending to stimulate the economy. Economists believe a US$28bn stimulus package is needed to stem the decline. Exports continued to fall amid trade tensions and a shopping splurge before a sales tax increase ran down stockpiles of goods.

EUROPEAN AND US NEWS

WSJ is saying that the hoped for trade deal is running into trouble over agreements on agricultural products. That was supposed to be the easy one. A crucial part of Phase one deal could be unravelling.
Do you feel lucky? Smith and Wesson is spinning out its gun business from its American Outdoor Brands business selling knives.
The S&P 500 is now showing its 20^th record high in 2019.
Disney gets 10m subscribers on day one. the Mouse is in Da House. Cinderella story.
De Beers has sold more diamonds than analysts expected.
Google is doing a JV with some US banks to allow users to open bank accounts.
Aramco will spend GBP200 on marketing for its huge IPO.