ASX 200 finishes down 50 to 6391 as China and Japan rally on stimulus hopes. Dow futures reverse early losses to be up points. After a near 200-point fall to 6250 the index found a footing as both China and Japan rallied on stimulus hopes. Word from the Fed is also positive on doing whatever it takes, and the RBA meets tomorrow. Both gold and oil better in Asian trade helping. Bank stocks remain under pressure as the Big Bank Basket is down from $172 to $152.47 but has bounced from support levels. Elsewhere buyers emerged in oil stocks with WPL up 1.5% and STO up 2.9% with some bargain hunting in other selective stocks although miners remained pressured. FMG was ex dividend and fell 9%, BHP down 0.7% and RIO down 1.1%. Gold miners had a slightly better day with NCM up 3% and SBM up 3%, though others continue to be troubled, GOR down 6.5% and NST down 2.2%. Healthcare stocks flatlined with CSL down modestly and tech stocks finding buyers after the NASDAQ held its nerve. The new All Tech index rose 0.36% with XRO up 1.3%. In corporate news, CTD came under fire again from VGI Partners following its results dropping 3.2%, CTX tried its best to keep all parties interested falling 2.1%. A profit downgrade from TGA was a worry given most of its income comes direct from welfare spending and BGA disappointed with its results falling 29.4%. On the economic front, house prices continue to rise, and corporate profits dropped 3.5%. The AUD stable around 65.34c whilst the 10-year yield hit new record lows of 0.78%. In Asia some modest rallies ensued with Japan up 1.1% and China up 3%.
- ASX 200 down 50 to 6391.
- High 6416 Low 6245. Great rally off lows. Big volume again.
- Oil and gold bounce in Asia.
- Banks remain under pressure ahead of RBA.
- Energy stocks recover. Healthcare soggy. Miners slip.
- Industrials mixed. Tech bounces.
- 10-year bond yields crater to 0.78%.
- AUD slips to 65.32c.
- Dow futures down 383 points
- Aussie gold down to $2439
- Bitcoin falls to US$8616
- Asian markets rally Japan up 1.1% and China up 3%.
INSIGHTS FROM MARCUSTODAY TEAM
MARCUS: Notes on the negative frenzy. The market is an animal and it has been badly spooked, and for today I think it is safe for investors (sensible people) to assume that the market will not forget its recent fears and start sprinting up again with a smile on its face, all on a sixpence. It is unlikely and inappropriate – even if coronavirus tailed off from here, we will have a hangover.
- WTC +12.72% shorts cover
- CTD -3.16% VGO Partners back on the attack.
- CGC +4.73% results cheer.
- MAQ -8.46% pathetic volume.
- FMG -9.03% ex dividend.
- GOR -6.55% mauled again.
- TTT -9.18% video update
- GSW -13.16% succumbing to the inevitable.
- ZNO +19.26% German test results bring more buyers.
- FLC +10.34% Investor presentation.
- EWC +16.92% half yearly report.
- PNV +7.42% director’s interest.
- APX +7.14% broker upgrades.
- RFF +0.52% results and dividend increase.
- STO +2.93% go ahead for Van Gogh.
- Speculative stock of the day: Liquefied Natural Gas (LNG) +34.78% after a agreed takeover offer from LNG9, a Singaporean private company around 19.8c depending on USD. US$13C. 72% premium to previous close.
- Biggest Rises: WTC, MFF, LIC. FNP, FXL, PNV and APX
- Biggest Falls: RMC, FMG, MAQ, RSG, AIZ and VAH.
- Bega Cheese (BGA) -0.99% reports H1 Normalised PAT $15.0m vs year-ago $18.9m. Revenue $741.2m vs year-ago $649.2m. Statutory PAT $8.5m vs year-ago $5.0m. Normalised EBITDA $48.5m vs consensus $49.0m. Interim dividend 5.0cps vs year-ago 5.5cps. Reaffirms adjusted EBITDA guidance for FY20 $95-105m. Adds, supply chain and customer shipments have not been materially impacted by the virus.
- Rural Funds Group (RFF) +0.52% reports H1 NPAT $29.7m vs consensus $33.5m. Revenue $37.6m vs consensus $38.0m. Adjusted funds from operations (AFFO) $23.7m vs year-ago $20.3m. AFFO per unit 7.1c vs year-ago 6.4c. Guides FY20 AFFO 13.5cpu vs prior guidance 13.4cpu.
- Caltex (CTX) -2.14% rejects EG Group’s conditional takeover proposal saying it “undervalues the Company & does not represent compelling value for Caltex’s shareholder.”
- Thorn Group (TGA) –29.41% Revises full-year guidance. The previously announced guidance of a “small net profit after tax at the trading level, i.e. before significant items” will not be met due to rising arrears in its Business Finance division prompting higher write-offs and bad debt impairment provisioning than previously expected.
- Corporate Travel Management (CTD) -3.16% responds to VGI Partners report published March 1 2020; rejects claims of irregularities. “The timing of the release of VGI’s latest report, appears to be an attempt to use the current uncertainty caused by Covid-19 to promote further market uncertainty with respect to CTM, despite this affecting the entire travel sector and the broader economy.”
- All about rate cuts as Goldman Sachs sees one in March and one in April. NAB sees similar. ANZ sees RBA on hold despite turmoil.
- ANZ Job Advertisements for February: +0.7% to 151,146 easily ahead of market expectations of a 6.6% fall.
- Corporate profits in fell by 3.5% quarter-on-quarter to $94.07bn in the fourth quarter of 2019, after a downwardly revised 0.6% fall in the previous period and matching market expectations.
- Business inventories grew by 0.3% quarter-on-quarter in December, easily beating market estimates of a 0.1% fall.
- Australia CoreLogic home prices for February
- Activity in China’s manufacturing sector contracted at its fastest rate since the Caixin survey began in April 2004.
The private PMI fell to 40.3 in February, well below expectations of a 46 print, down from 51.1 in January. Any reading below 50 indicates a contraction.
EUROPEAN AND US NEWS
- U.S. citizens in states including California and Texas will vote on “Super Tuesday” for a Democratic candidate to run against President Donald Trump in November’s election. Mayor Pete Buttigieg has dropped out of the race to take on Donald Trump. Leaves only Joe Biden, Bernie Sanders and Mike Bloomberg really in the running.
- The Bank of Canada has a rate decision on Wednesday.
- OPEC ministers gather in Vienna on March 5th-6th. 1m barrels a day cut could be on the agenda.
- BoJo is going to be a dad again. Negotiations begin today to see what kind of a post Brexit world BoJo junior will live in. Time as always is running out as the UK wants to have made substantial progress by June EU Leaders summit. This weeks talks will have 10 parallel strands in goods, trade in services, transport, citizen rights and others issues. Plenty to discuss.
- U.S. President Donald Trump will meet pharmaceutical executives Monday. Pence to brief press.
Job interviewer: “And where would you see yourself in five years’ time Mr. Jeffries?”
Mr. Jeffries: “Personally I believe my biggest weakness is in listening.
Boy complains to his father: You told me to put a potato in my swimming trunks! You said it would impress the girls at the pool! But you forgot to mention one thing!
Father: Really, what?
Boy: That the potato should go in the front.
My friend was planning to get a Labrador. Is he mad?! Hasn’t he seen how many of their owners go blind?!”