Tuesday 3rd December – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

The ASX 200 fell around 150 points today to 6712 after Trumps latest tariff moves spooked the cattle. A touch of Martha and the Vandellas today. Nowhere to hide. US Futures up 42 points. Big blue chips led the flight of capital as it seemed foreign investors left the building simultaneously. WBC under renewed pressure down 1.3% with others following in its wake, CBA dropped 2.6% and NAB down 1.8%. In the insurers, QBE fell 2.6% and IAG down 2.5% as APRA tightens capital requirement rules. Miners came under pressure despite metal prices moving higher, BHP fell 1.4% RIO down 0.5% and FMG hit hard down 1.5%. Even oils were easier, despite a positive day for the WTI price. WPL down 1.6% and STO down 0.6%. In the industrials, the recently strong as ten men consumer staples all came off the boil, COL down 4.2% and WOW down 3.4%. No where to hide in industrials either, TCL dropped 1.76% as selling took its toll and tech stocks joined the bloodbath. TLS fell 3.1% and WTC had a shocker dropping 5.7%. In corporate news, MTS dropped 1.4% after taking a $237m charge on its 7-Eleven contract miss. CTX fell 0.8% after telling the Canadians to get mounted. On the economic front the Balance of Payments (BOP) were again good as the RBA left rates on hold as expected. 10-Year yields rose again hurting sentiment to 1.20%. the AUD rose on the rate news to 68.30c and in Asian weakness was the order of the day on trade woes, Japan down 0.7% and China down 0.03%. Hong Kong remains a flashpoint and focus. Carrie Lam promises more economic relief.

ASX 200 down a massive 150 points to 6712. Blood on the rooftops. Large volume too.
High 6847 Low 6704. International sellers dominate big cap selling
RBA frozen at the controls. BOP does nothing to help.
Banks and big miners skittled.
Healthcare under the microscope.
Consumer staples unwind recent gains.
Tech wreck hurts too.
10-year bond yields rally to 1.08%.
AUD firms to 68.42c
US futures up 42 points.
Aussie gold slips to $2135
Bitcoin collapses to US$5669
Asian markets weaker with Japan down 0.7% and China down 0.03%

STOCKS

WPL -1.58% oil rise unable to save sector.
CTX -0.78% rejects advances.
MTS -1.36% hit with 7-Eleven impairment charge.
QBE -2.60% SUN -2.10% IAG -2.54% APRA moves goal posts.
PRU +5.71% gold producers see buying.
NWH +0.33% broker upgrade.
EHL +2.51% bucks the trend.
AVH -9.45% profit taking to the max.
PET +2.33% ups guidance, sort of.
VUK -5.13% profit taking.
PNV -3.84% Macquarie ups profit target.
HUB -4.28% platform stocks suffer.
ORE -3.20% cuts lithium carbonate price guidance
SYR +2.82% perverse but AFR article helps.
M7T -5.04% capital raising at 62c.
PCK +2.38% entry into UK market.
KSL +7.58% strategic placement to Asian Development Bank.
CBR +2.44% business update.
NHC -3.23% appeal on mine expansion.
RHC -3.27% change of directors’ interest.
MLX – unchanged – board changes.
APT -2.25% long/short fund goes short.
Speculative stock of the day: Red Emperor (RMP) +33.33% after the company signed a option agreement to acquire a Perth Basin oil play.
Biggest Risers: PRU, OPT, EHL, AHY and AFG
Biggest Falls: AVH, NWL, WTC, PNI, MFG and CCX.

TODAY

Caltex (CTX) -0.78% Has knocked back Alimentation Couche-Tard’s takeover offer of $34.50/share, saying the $8.6bn valuation doesn’t offer compelling value to shareholders. CTX management is open to receiving a revised bid and has offered ACT selected non-public information to help the company to formulate a revised proposal.
Regis Healthcare (REG) -2.35% Appoints Rick Rostolis as CFO.
Metcash (MTS) –1.36% Is set to recognise a $237.4m impairment charge related to goodwill and other assets in its “Food pillar” division, after a review prompted by the loss of its major client 7-Eleven.
Santos (STO) –0.62% 2025 production target lifted to 120mmboe from 100mmboe, reflecting a cumulative growth rate of around 8%. Production and sales volume guidance was narrowed slightly. CEO Kevin Gallagher said the forecast free cash flow breakeven oil price is now $US29 a barrel.
Computershare (CPU) -1.71% Appoints Nick Oldfield as its new CFO.
Saracen (SAR) -1.30% FY20 production guidance in respect to its half-share of the Kalgoorlie Super Pit is 245Koz at an AISC of $1,470/oz.

ECONOMIC NEWS

RBA leaves rates unchanged
Australia’s current account recorded a $7.9 billion surplus in the September quarter according to the latest information released by the Australian Bureau of Statistics (ABS). Chief Economist Bruce Hockman said: “For the first time in 46 years, we have had two consecutive current account surpluses.”

Current account balance

ANZ / Toy Morgan Consumer confidence rose 1.2% last week, lifting from 4-year lows.
National Australian Bank has raised its gross domestic product forecast to 0.5%, from 0.3%.

BOND MARKET

ASIAN NEWS

China has hinted that the list of ‘unreliable entities’ may lead to sanctions against US companies. This seems to be another signal that the recent Hong Kong Bill signing by Trump has jeopardised the trade deal lite. A Chinese media outlet had this to say on twitter that U.S. officials may face visa restrictions and U.S. passport holders could be banned from entering the province. China has not specified what companies would be punished but FedEx could be high on the list.
North Korea says dialogue with the US has been a trick. Not a very good one so far.
Retail sales in HK down 24% in October. Mask sales rise though.

EUROPEAN AND US NEWS

Trump has landed in the UK for a NATO meeting bringing goodwill and seasonal cheer to all men. All men, except the French who are being hit with 100% tariffs as Macron looks to bring in a digital revenue tax against US tech companies in France and the EU.
NATO 70^th Anniversary meeting is not even called a summit. Very downplayed as so many divisions in the world’s biggest defence pact. More enemies within than without. Dinner with the Queen is the highlight. Suspect Andrew won’t be there.
Vale, the world’s biggest producer of steelmaking ingredient iron ore, will set targets on reducing greenhouse gas emissions from its products even after they have been sold.
Prince Andrew has another week to forget as BBC’s Panorama airs interview with his accuser.
Goldman Sachs now talking the ‘Boris boom’.
In sad news, the worldwide apostrophe society has been disbanded. No one interested anymore in grammar. ‘Ignorance and laziness has won’ according to the chair.