The ASX 200 bounced 37 points to 7031.5 as authorities in China and around the world move to contain the Coronavirus (CV). A good sentiment bounce as US stocks led to some confidence. US Futures up 74 points as Apple delighted fans on results. The CPI numbers took any thoughts of a rate cut next week off the table. Banks did well with CBA up 0.7% and WBC rallying 0.8%. Miners too back in demand as the outlook clears, BHP up 0.6% though FMG down 0.35% as major shareholder, Hunan, clarified its position. CSL continued to push higher up 1.1% with other healthcare stocks better on defensive qualities. Tourist and travel stocks had a good day out as optimism rose. SYD up 3.1%, QAN up 2.4% and WEB up 4.3% after clarifying its CV exposure. Energy stocks gained with WPL up 0.8% and STO up 0.2%. OSH though unchanged after disappointment on PNG expansion plans. Tech stocks followed US tech higher led by XRO up 2.6% and APT up 3.5% on a draft code of conduct for the BNPL sector. In corporate news TWE had a serious hangover as earnings and broker downgrades hit the stock finishing down 26%. VUK rallied 9.4% on an earnings upgrade. In economic news, the CPI came in at 0.7% easing any hopes of a rate cut. 10-year yields 1.02% off yesterday’s lows. Asian markets were mixed as HK came back on stream and fell 2.4% whilst Japan up 0.6%.
- ASX 200 up 37 to 7031.5. Good bounce. Not convinced though.
- High 7047 Low 7005.
- Banks lead charge higher. Miners find support.
- Tech stocks in demand. CSL keeps on keeping on.
- Consumer stocks rally from lows.
- TWE shocker. US Hangover.
- 10-year bond yields ease to 1.16%
- AUD steady at lower levels of 67.70c
- Dow futures up points.
- Aussie gold off record highs of $2312 as bullion drops.
- Bitcoin rallies to US$9332
- Asian markets in holiday mode as Lunar New Year continues. Japan open and up 0.6%. Hong Kong first day back down 2.4%.
- VUK +9.38% earnings update.
- CCP +4.66% broker upgrades
- MVP +5.03% Appendix 3B.
- SLK +4.09% tourist stocks bounce.
- OZL +2.86% quarterly report.
- FMG -0.35% update on shareholding from Hunan Valin.
- WEB +4.28% clarifies media reports of its demise.
- TWE -25.96% cheap wine and lack of US growth. Cue Jimmy Barnes
- OML -6.67% CEO retires.
- IAG +0.14% David Harrington to leave.
- NST -3.92% December quarterly.
- CGC -3.15% reverses gains.
- ZNO -16.46% virus ‘contained’.
- CTD -0.16% says too early to know what effect CV will have.
- WZR +9.80% change in substantial holding.
- 360 +9.63% quarterly report.
- BPT -1.92% production dips.
- KCN +10.58% court looms.
- EHL -unchanged – acquisition and trading halt
- TNY – Trading halt- cap raise and acquisition.
- VOC +0.93% broker upgrade.
- MFF +4.40% special dividend
- ATL -1.32% joins the downgrade club. It’s getting bigger and not that exclusive.
- SRG +2.70% multi-disciplined asset services with Alcoa.
- ILU +6.38% quarterly report.
- CVW -4.26% another downgrade club member.
- Speculative stock of the day: Nothing on any volume.
- Biggest Risers: VUK, ILU, Z1P, MVP, CCP, AVH and MFF
- Biggest Falls: TWE, PPK, OML, RMS, NST and PRU
- Sandfire Resources (SFR) +1.25% Q2 copper production 18,258t vs quarter-ago 16,730t. Gold production 10,723oz vs quarter-ago 8,647oz. C1 cash costs 83c/lb vs quarter-ago 87c/lb. Guidance for FY20 maintained; SFR expects copper production between 70-72kt, gold production between 38-40koz and C1 costs in the range of 90c-95c/lb.
- oOh!media (OML) -6.67% CEO Brendon Cook to step down during 2020. Confirms guidance for FY19; underlying EBITDA to be towards the lower end of the $138-143m range.
- Evolution Mining (EVN) -2.07% reports Q2 production of 170,890oz gold, in line with 9-Jan operations update. AISC $1,069/oz, in line with update. Group free cash flow of $83.8m. EVN also repeated their FY20 guidance – gold production is expected to be around 725,000oz, with an AISC cost of $940-$990 per ounce.
- Treasury Wine Estates (TWE) -25.96% warned on earnings after hours. It has seen a 17% decline in earnings before tax, interest and SGARA accounting standards for the first half to $98.3m. Full-year earnings now expected to be up between 5% to 10% instead of 15% to 20%.
- Northern Star (NST) -3.92% reports Q2 gold production of 212.6koz vs expectations of 203.1koz. NST notes strong progress at Pogo, with key performance indicators continuing to significantly improve month-on-month through quarter. Underlying free cash flow of $88m. Cash, bullion and investments at 31 December was $1.4bn, up from $372m at 30 September, predominantly reflecting the funding proceeds to complete the $800m acquisition of KCGM which occurred 3 January, 2020. NST also said that it is on track to meet FY20 guidance of 920,000-1,040,000oz at an AISC of $1,240-1,340 per ounce.
- Beach Energy (BPT) -1.92% reports Q2 revenue $462.0m vs year-ago $441.0m. Higher oil output was partly offsetting the impact of the Kupe statutory shutdown and seasonal gas demand.
- Atlas Arteria (ALX) +1.88% reports that Q4 weighted average toll revenue increased 6.6% year-on-year. This result reflects stronger quarterly traffic at APRR relative to the softer conditions in Q4 2018 that were impacted by protests in France. For the 12 months ended 31 December 2019, weighted average toll revenue and traffic increased by 2.6% and 0.7% respectively.
- Corporate Travel Management (CTD) –0.16% Says it’s too early to predict the full impact from the coronavirus, but immediate term influence is expected to be minor.
- ANZ Roy Morgan Consumer Sentiment Index fell 0.3% last week to 108pts.
- Australian CPI has come in at 0.7% for Q4. 1.8% YoY. Trimmed mean is 0.4%. All inline. Tobacco up 8.4% Holiday travel and accommodation up 7.3% and petrol up 4.4%. Fruit up 6.8%. Falls in international travel of 2.9% and women’s clothes 2.5% and wine thankfully down 1.6%. Not much here to get excited about RBA will not be cutting based on recent numbers. Economists pushing rate cut out to second quarter. Drought starting to have an impact on food prices.
- Hong Kong falls hard as catch up begins after lunar new year.
- Hong Kong airline company, Cathay Pacific has announced it will cut its flights to and from mainland China by at least 50%.
- Xi meets WHO.
EUROPEAN AND US NEWS
- Apple results will buoy the market on unexpected increased iPhone 11 sales.
- AMD, the chipmaker, has fallen on a lacklustre outlook statement.
- Russia will not use partners to build its new gas pipeline called Nord Stream 2 under the Baltic Sea.
- eBay warns that some US states sales tax being introduced will slow growth.
- UK allows Huawei to help build 5G capability. USA will not be happy.
Wishing you a joyful holiday season and I’m looking forward to kicking your ass next year!
The President’s response:
My Dearest Nancy,
I see you have started your holiday celebrations much too soon. You’re drunk. You misspelled kissing!
A blonde walked into an electronics store and said to the salesmen: “I want that tv.”
The salesperson shook his head and said, “No, we don’t sell to blondes.” So the blonde left and came back with her hair dyed brown and said: “I’ll take that tv.”
Again the salesman said: “No, we don’t sell to blondes.” So she left again and came back with her hair dyed black and said: “I want that tv.”
But the salesman still said: “No, we don’t sell to blondes.” Finally the blonde got fed up and said, “That’s it! How’d you know I was a blonde?!” she asked.
The salesman answered: “Cause that’s a microwave.”