The ASX 200 rallied again today, up 15 points (+0.2%) to 7079.5 though enthusiasm faded a little. US markets closed tonight for the Martin Luther King Jr. Holiday and Davos kicks off this week – could be the source of some volatility with President Trump speaking to his European ‘friends’. Dow futures up 19 points. Oil kicked higher in Asian trade as Libya risks rise, helping WPL up 0.7% and STO up 0.9%. Miners remained in demand as iron ore price rises helped BHP put on 1.58% and RIO up 0.9%. FMG rose 3.7% to hit an all-time high and gold stocks rallied to as AUD bullion prices rose again. NCM up 0.75% and NST up 1.6%, leading the way. Bank shares were mixed as CBA stalled though WBC up 0.4% and NAB up 0.6% playing a little catch-up. Industrials flat-lined although we did have some volatility to the downside from four companies updating the market on business conditions. SUL down 1.8%, KGN down 22.2% NHF down 12.7% and GTK down 14.3%, all hit. In other corporate news, not much out there and economic news too was thin on the ground. The 10-year bond yield remains stable at 1.17%. Asian markets firm ahead of the Lunar New Year next week with China up 0.57% and Japan up 0.59%.

Today’s Highlights

• ASX 200 up 15 to 7079.5
• High 7092 Low 7071. Not a bad start volume-wise. Martin Luther King Holiday in US.
• Miners doing well on iron ore rise.
• Banks mixed. CSL kicks again.
• Profit warnings abound.
• Oil jumps on Libyan unrest.
• 10-year bond yields stable at 1.17%
• AUD fades to 68.82c
• Dow futures up 19 points.
• Aussie gold higher at $2265
• Bitcoin eases back to US$8643
• Asian markets: China up 0.57% and Japan up 0.59%.

STOCKS                                               

• AEF +11.54% getting silly now up again.
• MSB +6.32% strong US buying.
• SLR +6.74% quarterly activity report
• FMG +3.68% iron ore gearing.
• NHC -0.48% court proceedings.
• MP1 +3.16% broker upgrade.
• NHC -0.48% Colton project update.
• PNV +3.67% corporate presentation
• EOS +2.68% buying resumes.
• KGN -22.17% business update.
• JIN -4.72% just lemons.
• NHF -12.69% trading update. More claims.
• PBH -3.84% profit taking continues.
• SUL -1.84% bushfires hurt Macpac and BCF.
• GTK -14.34% FY20 Outlook update.
• RSG -1.26% adds to hedge book.
• SYD -0.55% disappointing passenger numbers.
• LYC +0.41% licence challenge in Malaysian courts.
• KBC – shareholders urged to reject WAM offer.
• SYR +0.79% lithium rally continues. Helps graphite too.
• WZR -6.38% placement weighs.
• WEB -0.97% MD gets another two years in charge.
• BID +12.00% quarterly update.
• NUF +0.36% broker downgrade.
• MDR +7.55% rally continues on contract win.
• TNT +12.50% new non-executive director.
• ORE +1.92% multi-year contracts.
• CAN +22.55% recent commercialisation update brings more buyers.
• Speculative stock of the day: G Medical (GMV) +46.15% second day running after Taiwanese FDA approval for Prizma. Prizma is its real-time patient monitoring system linked to an iPhone. Good volume again.
• Biggest Risers: AEF, SLR, MSB, IFN, FMG, PNV and BPT
• Biggest Falls: KGN, NHF, CDA, JIN, BWX, PBH and DDR

TODAY

• Sydney Airport (SYD) -0.55% December traffic up 0.6% year on year. Domestic passengers up 1.3% y/y to 2,348K. International down 0.4% y/y to 1,605K. CEO Geoff Culbert noted trading conditions have been their toughest in more than a decade.
• nib Group (NHF) –12.69% Warns on profit; guides FY20 underlying operating profit to be at least $170m vs prior guided at least $200m. Higher than expected claims within its Australian and New Zealand health insurance operations are expected to weigh on FY20 earnings.
• Kogan.com (KGN) -22.17% H1 trading update; gross sales up more than 16% year on year. Gross Profit up more than 9%. Operating Costs declined marginally. Active Customers grew 10% to 1.7m. Kogan Marketplace gross sales in Q2 grew by more than 44% quarter on quarter.
• Challenger (CGF) –0.81% is considering a $1bn+ acquisition in North America, according to the AFR. GF has conducted due diligence on a North American investment manager, with the price for the potential acquisition being at least $1bn, which would likely be funded by a capital raise. Being advised by Macquarie Capital, CGF was close to securing a deal at end of 2019 but it stalled due to the price. The objective of the acquisition would be to broaden revenue and earnings streams outside Australia.
• Super Retail Group (SUL) -1.84% provides H1 trading update; guides H1 EBIT $113-115m vs $130m expectation. The business notes that the bushfires and sustained drought conditions have impacted December trading. While the company expects the impact to be one-off, it is difficult to estimate how long it will take for sales to recover – specifically in the outdoor category. All brands have been impacted to a varying degree, with BCF and Macpac most affected due to their higher exposure to the outdoor category. Reflecting the impact of the bushfires on sales, Group LFL sales growth for weeks 17 to 26 was flat compared to positive LFL sales growth of +3.2% in the first 16 weeks.

BEST AND WORST

ECONOMIC NEWS

• Nothing on the card today

BOND MARKET

ASIAN NEWS

• A pneumonia outbreak in central China widened with more than 200 people now diagnosed with the new SARS-like virus. The Coronavirus seems to be now spreading from human to human. Lunar New Year will see many Chinese travelling with risks for the spread of the disease rising as a result.
• China’s top economic planner said it would cut the production and use of plastic over the next five years.

EUROPEAN AND US NEWS

• Davos kicks off this week and Donald Trump’s address will be keenly watched by EU leaders as he may take aim at the EU, now he has ‘won’ in China, Mexico and Canada.
• The US$8bn award against Johnson and Johnson in a lawsuit related to the antipsychotic drug Risperdal has been cut to US$6.8m.
• Britain’s retail sector defied expectations and continued to contract last month, marking the longest spell of no growth since comparable records began in 1957.
• Oxfam has assessed there are 2,153 billionaires having more wealth than 4.6bn people in 2019. The World’s 22 richest men are ‘wealthier than all the women in Africa’. The total wealth of the top 20 billionaires has doubled from $672bn to $1,397bn since 2012, according to Bloomberg Wealth. Jeff Bezos is still number one with a US$116bn fortune. This puts it in perspective, someone who saved US$10,000 a day since the construction of Egypt’s pyramids would still only have a fifth of the average fortune of the world’s top five.
• At least 75 members of a powerful Brazilian drug cartel escaped from a prison in northern Paraguay through a tunnel on Sunday not sure if it was Tom, Dick or Harry. At least five prison guards have been suspended and are under investigation for corruption. A Brazilian Hilts is giving it another go at that fence. Hopefully this time he will get over it.

And finally…

A woman, cranky because her husband was late coming home again, decided to leave a note, saying, “I’ve had enough and have left you…don’t bother coming after me” Then she hid under the bed to see his reaction. 

 After a short while the husband comes home and she could hear him in the kitchen before he comes into the bedroom. She could see him walk towards the dresser and pick up the note…

After a few minutes he wrote something on it before picking up the phone and calling someone… “She’s finally gone…yeah I know, about bloody time, I’m coming to see you, put on that sexy french nightie. I love you…can’t wait to see you…we’ll do all the naughty things you like.”

He hung up, grabbed his keys and left.

She heard the car drive off as she came out from under the bed. Seething with rage and with tears in her eyes, she grabbed the note to see what he wrote…”I can see your feet. We’re outta bread; be back in five minutes.”

 

Clarence

XXXX