The ASX 200 limped into the weekend with a modest 22 points rise to 7064 as the buyers stepped back ahead of the weekend. Another day another record. So too in NZ where the NZX 500 hit 11800, a new record. US futures up points. Chinese GDP fails to move the needle. Miners were in the spotlight with RIO production numbers stimulating buyers, RIO up 1.8% and BHP up 1.2%. Gold miners were also making friends with NCM up 0.8% and NST up 3.2%. Oil stocks under pressure as WPL fell 1.2% on a broker downgrade. Industrials were bid again with TLS finally up 0.5% and the defensive consumer staples in demand again with WES up 0.6% and WOW up 0.9%. Tech were sidelined as the banks took up the running. CBA though missed out falling 0.5% after a stellar run. The action was in catch up football as WBC rose 0.3% and NAB up 0.4%. In corporate news, NUF smashed 10% after a profit downgrade as South American woes compounded local issues. AEF continues its run after FUM numbers up 2.8%, DMP fell 2.5% after a French court case disappointed. 10-year bond yields were becalmed at 1.17% and the AUD continues to hug 69c. Asian markets continue to take the Monster trade deal on their stride with Japan down % and China down %. Lunar New Year approaches next week.

• ASX 200 up 22 to 7064. Fades into weekend.
• High 7088 Low 7050. Quiet end to week.
• Banks bounce continues, CBA misses out.
• RIO production cheers miners.
• Industrials in demand. CSL slips. TLS rises.
• 10-year bond yields ease to 1.17%
• AUD fades to 68.94c
• Dow futures up 15 points.
• Aussie gold steady $2255
• Bitcoin back up to US$8772.
• Asian markets: China down 0.32%. Japan down %.

STOCKS                                               

• PSI +6.67% Paragon acquisition update.
• FDV +12.88% cops ASX query. Nothing to see here move along.
• DMP -2.46% French court loss.
• PRU +0.46% broker downgrade
• NUF -10.02% business update. Significantly lower first half.
• BTI +0.45% investment sale.
• CAR +0.17% new CFO announced.
• RSG +0.85% quarterly.
• AEF +2.77% FUM rises again.
• SZL +13.56% gets California licence.
• PLS +8.57% buyers back but for how long?
• CGC +4.65% it’s raining men?
• JIN +3.82% good bounce thin volume.
• MSB +5.42% finishing week strongly.
• PBH -4.77% profit taking.
• EOS -4.38% profit taking.
• NEA -2.21% selling pressure continues.
• AFG -2.86% good run waning.
• FPH -0.87% announces investor day.
• PNR -15.38% quarterly disappoints.
• MDR +16.48% another good day after big rise yesterday on new contract.
• WPL -1.22% broker downgrades on quarterly report.
• RDY -5.34% becoming substantial holder.
• Speculative stock of the day: G Medical (GMV) +44.44% Prizma clinical trials completed for Chinese approval process. Prizma is a smart phone case that turns a phone into a mobile medical monitoring device.
• Biggest Risers: PLS, PSI, MSB, VGI, CGC, APX and JIN.
• Biggest Falls: NUF, PBH, PPK, EOS, AX1, CRN and MAH.

TODAY

• Rio Tinto (RIO) +1.78% has released its 4Q19 production results. Iron ore production & shipments were lower compared to the prior year, RIO expects iron ore shipments to rebound in 2020 to between 340-343mt from 327.4mt in 2019.
• Graincorp’s (GNC) +1.71% malt business is stirring up interest. BGH Capital, The Carlyle Group and Kohlberg Kravis Roberts are all apparently interested. GNC is set to lodge its demerger proposal next month ahead of the March 16th shareholders meeting to approve the deal. The question is whether the $2bn asking price will be too much.
• Australian Ethical (AEF) +2.77% net inflows of $190 million over the quarter ending December 31, 2019. Including market appreciation total funds under management grew to $3.87bn, up 6.3% on the prior quarter.
• Nufarm (NUF) -10.02% expects earnings before interest, tax, depreciation and amortisation in a range of $55m to $65m for the first half of FY20. Market consensus was for first-half EBITDA of $84.8m. Margins in South America were hurt by strong competition. Earnings from North America are expected to be more heavily weighted toward the second half. Significant reduction in sales in Australia and New Zealand due to continue “extreme climatic conditions”

ECONOMIC NEWS

Latest State of the nation

• The Selector High Conviction Equity Fund rose 39.2%over the year, after gaining 2.6% in the three months to December. Regal Australia Long Short Equity Fund came second, with a 38.2% increase in performance over the year even after a 2% decline in the three months to December.

BOND MARKET

ASIAN NEWS

• Gross domestic product rose 6% in the final quarter of 2019 from a year earlier, the same as in the previous three-month period and the median estimate.
• Fixed-asset investment rose 5.4% in the year, increasing its pace in the final month particularly through a jump in manufacturing expenditure

• Industrial output rose 6.9% in December from the same period the previous year, versus the median forecast of 5.9%. Retail sales rose 8% versus an estimate of 7.9%.
• Japan recently announced that it will sell more 20-year bonds in 2020.
• Here is something that will worry infant formula companies, China’s birth-rate dropped to the lowest level since at least 1949 last year. The number of births per 1,000 people declined to 10.48, the lowest level on record. The demographic time bomb is ticking: China’s working-age population, those aged 16 to 59, declined by 890,000. The number of newborns in 2019 fell to 14.65 million, a decrease of 580,000 from the year before.
• China’s elderly population is expected to grow by a total of 224m between 2010 and 2040. The share of people older than 65 grew to 12.6% last year, compared with 11.9% in the prior year.

EUROPEAN AND US NEWS

• The US Treasury will start issuing 20-year debt in the first half of 2020.
• The big winners under Trump are the banks. JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley posted earnings this week showing they saved US$18bn in 2019

• Alphabet hits US$1 trillion valuation.Took the words right out of my mouth.
• Turkey cut its benchmark interest rate for the fifth consecutive time in an effort to encourage more lending and boost economic growth.
• Gap has scrapped its plan to spin off Old Navy.
• EU Commissioner criticises US-China trade deal.
• Germany will phase out all coal by 2038. EUR 44bn in compensation to communities and companies.
• Trump’s impeachment trial process begins. And we all know how it will end.
• The second-biggest diamond in history will be cut, polished and turned into a collection of Louis Vuitton jewellery. It is a 1,758-carat ‘Sewelo’ diamond found in Botswana last year by Lucara Diamond Co. Not sure how much its worth but a 1109 carat Lesedi diamond sold for US$53m. Not bad for a lump of compressed coal. The world’s biggest diamond is the Cullinan discovered near Pretoria in 1905. It is 3106 carats. Cut into several stones and part of the Crown Jewels. Good for the weekend trivia quiz.

And finally…

 

Little Johnny’s teacher asks, “George Washington not only chopped down his father’s Cherry tree, but also admitted doing it. Do any of you know why his father didn’t punish him?”

Little Johnny replies, “Because George was the one holding the axe?

 

The teacher asks little Johnny if he knows his numbers.

“Yes,” he says. “My daddy taught me.” “Can you tell me what comes after three?” “Four,” answers little Johnny. “What comes after six?” “Seven,” answers little Johnny. “Very good,” says the teacher. “Your father did a very fine job.

What comes after ten?” “A jack,” answers little Johnny.

 

A teacher asks the children to discuss what their fathers do for a living.

Little Mary says: “My Dad is a lawyer. He puts the bad guys in jail.”

Little Jack says: “My Dad is a doctor. He makes all the sick people better.”

All the kids in the class had their turn except Little Johnny. Teacher says: “Johnny, what does your Dad do?”

Johnny says: “My Dad is dead.” “I’m sorry to hear that, but what did he do before he died?”

“He turned blue and pooed on the carpet.”

Clarence

XXX