Sorry missed it yesterday…on a plane..
The ASX 200 gives back yesterday’s gains as the jobs number (5.1% headline) takes a rate cut well and truly off the table. Down 45 to 7088. Asian markets weak on coronavirus fears as Dow futures down 62 points. Chinese New Year beckons. Early weakness accelerated on better than expected jobs numbers. DOW and CIM set the scene with significant downgrades and write-offs falling 18.1% and 19.9% respectively. CSL copped a downgrade and fell 0.4%. Banks tried to hold up with CBA up 0.1% but WBC dropped 0.2% after announcing a new Chair in John McFarlane. Consumer gave up yesterday’s Kaufland inspired rally with WOW down 0.9% WES down 0.6% and COL down 1.9%. Miners saw some profit-taking as punters took the virus as an excuse for taking profits. BHP down 0.3%, FMG eased back 1.3% and NCM fell 1.9% as gold stumbled on a higher AUD. Oil stocks fell after WTI dropped on supply issues, WPL down 1.6% and STO down 1.4%. A few bright spots on REITs as NSR rose 6.3% on bid speculation, subsequently confirmed. In corporate news, JLG rose 6.2% on an upgrade to its outlook due to strong core demand from its insurance building and restoration business. The 10-year bond rate fell to 1.10% whilst the AUD rose to Asian markets were weaker as Wuhan weighs, China down 2.31% ahead of New Year week-long break and Japan down 0.76% on dismal export numbers.
- ASX 200 down 45 to 7088
- High 7131 Low 7069. Average volume.
- Banks try hard to hold the line.
- Energy stocks under pressure. Engineers suffer as DOW and CIM warn.
- Miners slip on growth fears and profit-taking.
- 10-year bond yields ease to 1.10%
- AUD rises to 68.66c
- Dow futures down 62 points
- Aussie gold steady at $2269.
- Bitcoin slips to US$8562
- Asian markets mixed on Coronavirus fears slightly abating despite one more death. Hong Kong down 2.05% China down 2.31% and Japan down 0.76%.
- NSR +6.31% takeover approach from Gaw Capital.
- JLG +6.25% business update.
- WEB +5.04% corporate activity.
- MSB +5.50% rerating continues.
- DOW -18.06% big earnings slip.
- CIM -19.87% problems in Middle East continue. Dividend gone.
- NWL -2.62% quarterly business update.
- SVW -4.52% engineering businesses in trouble. Follows suit.
- WZR -8.93% profit-taking.
- SYR -8.00% punters taking some profits again.
- PVS +12.96% earnings update.
- EEG +11.69% NT Seismic results.
- WSP +8.56% quarterly update.
- EXL +5.80% rebound continues.
- TLX +3.45% renal cancer study continues.
- WBC -0.24% new chair at the table.
- SXY – 35% increase in 2Q gas production.
- CBA +0.08% Colonial faces lawsuit.
- Speculative stock of the day: Zoono Group (ZNO) +29.20% as the coronavirus spreads. MT wrote this up as speculative buy two days ago. Exposed to disease control in animals in China.
- Biggest Risers: NSR, JLG, AVN, MSB, WEB, PAR and APT.
- Biggest Falls: CIM, DOW, BPT, RRL, MAH, BIN and SVW.
- Westpac (WBC) -0.24% appointed John McFarlane as its new chair. McFarlane was previously CEO of ANZ so at least he knows the business.
- Webjet (WEB) +5.04% is set to batten down the hatches from the ‘Barbarians at the Gate’. The company has formed an independent committee whose role is to deal with advisers and potential suitors. Some bidders have already signed NDAs with WEB’s defence adviser Goldman Sachs and getting their ducks in a row.
- Australian Finance Group (AFG) +1.74% Q2 mortgages lodged 28,623 vs year-ago 25,526. Lodgement volume $15.42bn vs year-ago $12.97bn.
- Downer EDI (DOW) –18.06% Lowers FY20 NPATA guidance to $300m from $365m. Costs incurred during December and January materially exceeded estimates. A review of customer claims also reduced revenue.
- CIMIC Group (CIM) -19.87% to sell its 45% stake in BIC Contracting (BICC) and will recognise a one-off post-tax impact of around $1.8bn in 2019. The company anticipates NPAT of approximately $800m (ex BICC impact), in line with prior guidance. CIM will not pay a final dividend.
- Senex Energy (SYX) -UNCHANGED- Q2 production up 35% to 447 kboe. Sales volumes up 25% on pcp to 400 kboe and quarterly revenue up 23% to $29m.
- CBA +0.08% acknowledges class action proceedings brought against Colonial First State Investments (CFSIL), a subsidiary of CBA. The class action relates to allegations that CFSIL did not act in the best interests of members when taking out group insurance policies.
- National Storage REIT (NSR) – confirms receipt of non-binding indicative proposal from Gaw Capital Partners.
- Milton Corporation (MLT) -0.79% has warned on the outlook for the retail banking sector. The company reported a NPAT of $70.2m today. Down from $70.7m last year. Fully franked dividend of 9c, unchanged. Its portfolio returned 2.1% over the six months to December. Total return for the year,16.5%. Very front end loaded
- Australia’s trend unemployment rate decreased to 5.1% in December 2019. In December 2019, trend monthly employment increased by around 18,000 people. Both full-time and part-time employment increased by around 9,000 people. The trend monthly hours worked increased by 0.2% in December 2019 and by 1.7% over the past year. The seasonally adjusted unemployment rate decreased by 0.1% to 5.1% in December 2019, while the underemployment rate remained steady at 8.3%. This latest positive report probably takes a rate cut off the table for the RBA. Hard to see a cut when housing is flying, and jobs are doing well.
- Commonwealth Bank (CBA) changes its mind on further rate cuts for now. April now rather than February. In other words, not going to happen. Citi pushes out to May. The odds of a cut have slumped to 24% from 56% this morning.
- Asian market weak ahead of a week-long break and the Coronavirus outbreak. Wuhan is being quarantined. A week is a long time in a viral breakout.
- Chinese markets reopen 1st February. Long time.
- Chinese officials halted travel from Wuhan, essentially locking down the city of 11 million people. Any vaccine will take months if not years to produce but virus is not that infectious, deaths have been confined to the elderly and low immune system.
EUROPEAN AND US NEWS
- ECB unveils its strategic review under NKOTB Christine Lagarde.
- Trump takes aim at the Fed. Dow would be 10,000 higher without rate rises.
- Trump is now targeting the WTO for a serious shake up.
- January 31st looms for UK Brexit. Then the real work begins.
- Davos continues.
- Bruno Le Maire (Minister of the Economy and Finance) struck a defiant tone on the sidelines of the World Economic Forum, saying France would continue with its plans for a digital tax if there was no agreement at the OECD on an international taxation.
- Tesla hits US$100bn valuation for the first time. Boeing still believes in the Max. But does anyone else?
- Amazon Music now has 55m subscribers close to Apple in a crowded market.
- In shock news, a third of Japanese dads on paternity leave do absolutely nothing to help according to one report. Not sure that is even news.
- Vale Terry Jones. One of a kind.
Bill has worked in a pickle factory for several years.
One day he confesses to his wife that he has a terrible urge to stick his penis into the pickle slicer. His wife suggests that he see a therapist to talk about it, but Bill vows to overcome this rash desire on his own.
A few weeks later, Bill returns home absolutely ashen. His wife asks, “What’s wrong, Bill?” “Do you remember how I told you about my tremendous urge to put my penis into the pickle slicer?”
His wife gasps, “My God, Bill, what happened?” “I got fired.” “No, Bill I mean, what happened with the pickle slicer?” “Oh, um, she got fired, too.”
At St. Peter’s Catholic Church in Sydney , they have weekly husband’s marriage seminars.
At the session last week, the priest asked Giuseppe, who said he was approaching his 50th wedding anniversary, to take a few minutes and share some insight into how he had managed to stay married to the same woman all these years.
Giuseppe replied to the assembled husbands, “Wella, I’va tried to treat her nicea, spenda da money on her, but besta of all is, I tooka her to Italy for the 25th anniversary!”
The priest responded, “Giuseppe, you are an amazing inspiration to all the husbands here! Please tell us what you are planning for your wife for your 50th anniversary?”
Giuseppe proudly replied, ” I gonna go pick her up.”