The ASX 200 drops another 106 to 6606 points as trade war nerves continue. US futures down points. Another day, another drop, as Trump turns up to NATO meeting grumpy and talks about no deal until after the election. Markets not happy Jan. Broad based losses with banks again under pressure awaiting news from NZ on capital requirements. WBC dropped another 1% below the 2410c SPP price, CBA down 1.9% and NAB 2.1% did not want to feel left out. MQG too joined the sell-off down 1.7% and QBE led insurers lower falling 2.3%. Big miners were also under pressure as BHP fell 2.5% and RIO down 2%. Gold miners were a rare bright spot as bullion saw a rally higher, NCM up 1% and GOR up 7.8% on reserve news. Consumer staples on the nose, WOW down 1.8% and WES down 2.2%. Energy stocks weaker ahead of OPEC meeting, WPL down 2.2%. Tech stocks saw selling with APT down 4.6% and WTC down 4.1%. XRO rose 1.5% as a rare winner today. In corporate news, ADH won after a NZ acquisition and soared 21.7%. OML up 23.92% after an earnings upgrade. Plenty of conference presentation around today too. In economic news, GDP came in below expectations although Frydenberg crowed about the uptick, most of which was government spending related, consumer growth is still anaemic. Car sales too in a funk, falling again. 10-year bond yields dropped to 1.06%, whilst Asian markets were sold off again on tariff fears. Japan down 1% but China down 0.2%.
- ASX 200 drops another 106 points to 6606. Good volume again.
- High 6692 Low 6590. International sellers dominate big cap selling again.
- GDP disappoints. Josh thrilled. Only one. All government spending.
- Car sales continue to slump
- Banks under pressure. WBC at SPP price.
- NZ decision on bank capital ratios at 12pm tomorrow. 16%?
- Miners slip again.
- Bond proxies fold.
- 10-year bond yields rally to 1.07%.
- AUD eases to 68.27c
- US futures up 42 points.
- Aussie gold rallies to $2166
- Bitcoin big rally to US$7146
- Asian markets weaker again on trade war fears, Japan down 1% and China down 0.2%
STOCKS
- OML +23.92% earnings upgrade
- GOR +7.83% investor presentation.
- AVH +1.74% filing of foreign docs.
- APT -4.56% WTC -4.08% high PEs under pressure.
- WSA -4.24% presentation at WA Forum.
- LEG – still suspended. GAL -7.14% one to watch.
- ADH +21.69% NZ acquisition.
- ICQ +22.22% cash flow positive soon.
- SYR +12.33% shorts being punished.
- PPK +5.61% good bounce.
- CBR +13.39% rally continues.
- BUB +0.94% Citi initiates.
- ALU -2.06% RBC says outperform.
- XRO +1.50% MS raises PT by 38%.
- RIO -2.05% investment in US copper project.
- MTS -4.81% broker downgrades.
- AMP -2.13% opens capital notes offer.
- CAT +4.43% change of directors’ interest.
- ATS -26.67% project update.
- Speculative stock of the day: Prescient Therapeutics (PTX) +20.48% rally continues on good volume after PTX-200 trial shows strong promise.
- Biggest Risers: OML, GOR, PRU, MAH, CEN and AQG.
- Biggest Falls: OPT, ASB, RWC, DTL, MTS, MND and APT.
TODAY
- oOh!media (OML) +23.92% Upgrades full-year underlying EBITDA 6%, expects to make between $138-143m vs previous guidance of $125m-$135m. The company said improved bookings for September and the fourth quarter had driven the upgrade.
- Rio Tinto (RIO) -2.05% To spend $US1.5bn over the next six years to extend the life of its Kennecott copper mine in the US to 2032. Rio has also paused its Zulti South project in construction and stopped mining operations at Richards Bay Minerals citing the rising security threat in South Africa.
- Adairs (ADH) +21.69% To acquire home goods retailer, Mocka for NZ$80m. The acquisition is expected to deliver pro forma FY20 EPS accretion of 10%. The board remains confident that the FY20 guidance previously provided for Adairs (ex Mocka) remains appropriate.
- TPG Telecom (TPM) -0.88% CEO David Teoh has highlighted further margin pressures due to the NBN in a statement released ahead of the telco’s annual meeting today. The Telco added it was tracking well against FY20 guidance for EBITDA in the range of $735-$750m. TPM also updated on its proposed merger with Vodafone Australia with a Federal Court judgement expected in Feb 2020.
- EML Payments (EML) -4.35% Raises $93m in retail entitlement offer priced at $3.55 per share, reflecting a take-up rate of 72%.
- iCar Asia (ICQ) +22.22% Trading update; FY20 revenue expected to grow by 50% or more. The acquisition of Carmudi has approximately doubled iCar Asia’s monthly Indonesian revenues, increasing the overall present contribution from approximately 12% to 22%. The identified cost and revenue synergies are expected to result in the combined Indonesian businesses breaking even in late 2020.
ECONOMIC NEWS
- Australian 3Q GDP +0.4% (consensus +0.5%) q/q, the annual rate lifted to 1.7% (consensus 1.6%). The Aussie dollar slipped slightly to 68.41 US cents after the release.
- In its most recent statement on monetary policy, the RBA forecasted annual GDP growth of 2.25% by the end of the year, a figure it’s now unlikely to achieve.
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- Total new vehicle sales dropped by 9.8% to 84,708 in November. Total new vehicle sales for the 11 months of 2019 were down by 8.2% to 978,628 vehicles.
BOND MARKET
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ASIAN NEWS
- China’s November Caixin Services PMI has risen to 53.5 from 51.1, beating market estimates of 51.2 points. The change also reflects an advance in the manufacturing PMI. Highest level since April.
- Chinese corporate bond defaults have risen to near all-time highs.
- Japan has approved a trade deal that will allow the US to sell beef and other agricultural products alongside a remake of Tom Cruise’s movie The Last Samurai.
EUROPEAN AND US NEWS
- Google founders step down.
- Impeachment report says Trump abused his office. Republicans will never back it. Game over.
- US passes bill on tougher sanctions on Chinese leaders on Uighurs detentions and human rights abuse.
- Bridgewater’s co-chief Eileen Murray will leave the company.
- This could catch on as the worlds largest pension fund (Japanese) has stopped lending stock to short sellers.
- NATO meeting going to be fun. With friendships like Macron and Trump who needs the Russians. France calls for reinforcements in US fight. Maginot line not working.
- Moody’s has reduced its outlook on the UK banking system from stable to negative.
- OPEC kicks off in Vienna tomorrow. Oh, Vienna. It means nothing to me.
And finally…
The guy goes into the backyard and sees a black mutt just sitting there.
“You talk?” he asks.
“Yep,” the mutt replies.
“So, what’s your story?”
The mutt looks up and says, “Well, I discovered my gift of talking pretty young and I wanted to help the government, so I told the CIA about my gift, and in no time they had me jetting from country to country, sitting in rooms with spies and world leaders, because no one figured a dog would be eavesdropping. I was one of their most valuable spies eight years running.
The jetting around really tired me out, and I knew I wasn’t getting any younger and I wanted to settle down. So I signed up for a job at the airport to do some undercover security work, mostly wandering near suspicious characters and listening in. I uncovered some incredible dealings there and was awarded a batch of medals. Had a wife, a mess of puppies, and now I’m just retired.”
The guy is amazed. He goes back in and asks the owner what he wants for the dog.
The owner says, “Ten dollars.”
The guy says, “This dog is amazing. Why on earth are you selling him, so cheap?”
The owner replies, “He’s just a big liar. He didn’t do any of that stuff.”
Clarence
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Beeks Downunder-Because not all financial news is boring! 