ASX 200 tumbles another 217 points to 6441 to enter official correction territory. Hard to believe that 20^th February the index closed at an all-time high of 7162. Dow futures down points. Looks like a replay of the Red Wedding that we have all been invited to this week. Broad losses across the markets with tech and perversely gold miners the hardest hit. Not part of the play book. Banks were weaker led by CBA down 3.1%. Other financials were not spared, MQG down 3.3% and MFG continued to fall, down 6.4%. Miners smacked again with BHP down 4.5% and RIO down 3.5%. Gold miners were dug up and spat out with PRU down 16.5%, RMS down 15.1% and EVN down 9.6%. Tech stocks were also hit hard, XRO down 5.6% and APT down 9% both walking wounded but WTC dropped yet again by 10.8% as the short sellers pop sparkling wine. Nowhere was safe. Bond proxies and defensives felt the pain with TCL down 2.8% and WOW down 3.5%. Results season has now limped to a close with numbers overtaken by fear itself. HVN dropped 14.1% on the outlook statement mainly as CV19 effects bite. NXT pleased the markets with a positive result and outlook and rose 6.3%. One of the winners was ZNO up 17% after its test on its products to help with the control of the virus proved positive. SHJ up 7.8% after delivering some positive numbers proving that lawyers always win. Nothing on the economic front today, AUD slightly weaker at 65.32c. 10-year yields now 0.84% record lows. Meanwhile in Asia, Hong Kong is set to hand out the cash. Ever child gets a prize, HK$10,000 each. Go forth and spend. Should have gone the full pink batt. Asian markets under pressure with S Korea down 3%, China down 3.4% and Japan down 4%.

• ASX 200 drops another 217 points to 6441. Huge volume boosted by option expiry
• Closes near bottom.
• High 6616 Low 6426.For the week we are down 9.8%. Official correction now.
• Broad based losses. All Tech Index has a birth to forget down 4.5% today alone.
• Big Bank Basket falls to $155.35 down from $172 at recent highs.Off 9.7%
• WBC directors under investigation by ASIC
• Gold miners get smashed. Go figure.
• Results wind up for Feb.
• 10-year bond yields slip to 0.85%.
• AUD slips to 65.32c.
• Dow futures down 383 points
• Aussie gold steady $2506
• Bitcoin bounces to US$8854
• Asian markets nasty, Japan down 4% Korea down 3% and China down 3.4%

STOCKS                                               

• PRU -16.53%, RMS -15.13%, GOR -13.95% and WAF -12.60% smashed.
• WTC -10.81% short sellers winning.
• APT -9.05% brokers cool to outlook.
• HVN -14.12% results ok but outlook the issue.
• Z1P -10.23% broker downgrades.
• ZNO +16.98% tests confirm it works in the fight against CV19.
• EHH +12.50% distribution deal with ZNO.
• WZR -10.53% fintechs under pressure.
• AMA -11.11% broker downgrades.
• TLS -0.29% phone use to increase. Nearly in the green.
• NXT +6.33% results cheer.
• JIN +2.60% change of directors’ interest.
• Speculative stock of the day: Zoono Group (ZNO) +16.98% huge volume and good rise. Volatile but latest CV19 results prove promising.
• Biggest Risers: NXT, PRN, MAQ, VGL, JIN, SDF and WPP
• Biggest Falls: PRU, RMS, HVN, GOR, ALK, WAF and WGX

TODAY

• Japara Healthcare (JHC) -1.64% reports H1 NPAT $5.4m vs consensus $4.9m. Revenue $212.6m vs consensus $207.8m. EBITDA $24.3m vs consensus $21.6m. Interim dividend 2.0c/share, (50% franked). Expects FY20 EBITDA to be (10%) lower than FY19 as the funding environment continues to present challenges and occupancy remains below historic levels.
• NextDC (NXT) +6.33% reports H1 statutory NPAT ($4.9m) vs consensus ($4.6m). Revenue $97.7m vs consensus $95.5m. Underlying EBITDA $50.9m vs consensus $48.8m. In FY20 expects revenue in the range of $200-206m vs consensus $200.7m. Underlying EBITDA between $100-105m vs consensus $102.2m and capital expenditure of $280-300m.
• Harvey Norman (HVN) –14.12% EBITDA $443.43m up 15.7% PBT $301.15m down 4.6%. Net assets $3.3bn. Dividend 12c fully franked. Highlights – 5 new stores in Malaysia. Offshore retail revenue $1.15bn. Offshore profit up 27% PBT. Outlook – the first three weeks of January saw bushfire conditions worsen across New South Wales, Victoria and into South Australia, with consumers very cautious and unwilling to spend on discretionary retail until the threat had moderated. Many industries worldwide will be adversely affected by the threat and potential widespread reach of the Coronavirus. Consumer and business confidence will take another toll until this threat is understood and mitigated. Aggregated franchisee sales for the period 1 January 2020 to 27 February 2020 decreased by 3.2% compared to the period 1 January 2019 to 27 February 2019 and decreased by 3.0% on a comparable sales basis. Not a positive outlook statement but hardly unexpected given the headwinds from bushfires floods and now CV19.
• Lynas (LYC) –7.52% MD calls it a solid result given the circumstances. NPAT $3.9m vs year-ago $19.0m EBITDA $44.2m. Revenue unchanged at $180.1m. Malaysian operating licence renewed for three years to March 2023, as announced on 27 February 2020. NdPr production was 2,512 tonnes and total REO was 7,518 for the half year ended 31 December 2019. Sales revenue for the period was consistent with HY19 at $180.1m, as a result of continued strong customer demand and product quality improvements which further increased the average selling price for our Lanthanum and Cerium products.

ECONOMIC NEWS

• The RBA released financial aggregates today:

• Quick round up of the State of the Nation

BOND MARKET

ASIAN NEWS

• Confirmed cases worldwide at 83,048; global deaths 2,858

• Korean infections hit 2000. India is reporting growth numbers today. Has it bottomed or taking a new leg down on CV19.
• China death toll at 2,788, up 44; cases climb to 78,824, up 327.
• South Korea confirms 256 more cases, bringing total to 2,022.
• Limited virus testing in Japan hides true scale of infection.
• Japan knows how to throw the money around. Has been doing it for years to stimulate a dying economy. Now one adviser has told media that PM Abe should hit the economy with another US$45bn yen worth of stimulus. Not sure where they get the money from.
• Baidu, China’s dominant search engine, tripled its profit in the fourth quarter but forecast weaker revenues for the first three months of this year.
• India to grow at 4.3% this year. GDP numbers tonight.
• China has issued a record number of force majeure notes to excuse local companies from breaking contracts.

EUROPEAN AND US NEWS

• UK playing hard ball with EU unless it gets a Canada style deal. Maybe it will get Harry back. Threatens to walk away.
• VIX index hits highest level since 20111 ‘Flash Crash’.
• Wall Street’s Dow Index has notched its quickest correction since the Great Depression (not sure it was that great).
• Netflix, Gilead and Clorox have been some of the few winners this week.
• Junk Bonds. In a week when Michael Milken was pardoned, investors have been dumping high yield Junk Bond ETFs over CV19 fears.
• Dow is down 12.8% Nasdaq down 12.7%.
• OPEC meeting looms. Saudi wants to cut. Big time.

And finally…

May need a good one today!!!! Been a tough week. Good news is at least corrections are over quickly! Maybe.

Apparently you cannot use Beefstew as a valid password…its not stroganoff.

 

I am so old that when I was a kid I actually had to win to get a trophy..

 

Mind how you go out there.

Clarence

XXX