ASX 200 selling accelerates with the index closing down 180 points to 6216. Closing at lows. Dow futures down 346 points. A nasty lead from Wall Street turned nastier as retail sales numbers disappointed and the CV19 spreads. One Sydney school closed down not helping. Banks were once again the targets as any economic fall out and job losses will pressure banks on bad debts and cuts in rates hurt NIM. CBA dropped 3.7% and WBC down 4%. Seems only a few weeks ago CBA was riding high at around $91. The Big Bank Basket is now $ 139.42. Miners tried hard for a time on iron ore prices but succumbed with BHP down 3.7% and FMG dropping 4.5%. Energy under pressure as China calls force majeure on some LNG contracts. WPL down 3.4% and STO down 2.6%. Elsewhere the market was once again trashed across the board. A few pockets of resistance in SHL up 3.4% and the gold miners enjoying the bullion price rise but otherwise it was all downhill. WOW managed to hold its ground up 0.7% as its stockpile of toilet rolls should save it. ELD up 2.6% as one of the few stocks to be positive at multi-year highs. Yes highs. Tech stocks copped a hiding with the All Tech Index down 4.1%. XRO fell 5.5%, CPU down yet another 5.3% and REA down 3.8% as home buyers get gun shy over CV19. On the corporate front, NUF reaffirmed guidance and rose 0.8%.  In economic news, retail sales fell 0.3%, hardly a surprise given the bushfires you would have thought. December was a 0.5% drop too. 10-year bond yields tumble again now 0.68%. The AUD around 66c steady and Asian markets under pressure with Japan down 2.9% and China down 0.9%.

• ASX 200 down 180 to 6216. Down 3.5% for the week.
• High 6370 Low 6216. Closes at its lowest point since April 19.
• 100k cases now globally.
• Banks under siege. Miners flop. Energy under the pump.
• Few gainers, SHL and ELD.
• 10-year bond yields ease to 0.72%.
• AUD drifts to 66.00c.
• Dow futures down 346 points
• Aussie gold races to $2540
• Bitcoin stronger at US$9035
• Asian markets hit with Japan down 2.9% and China down 0.9%.

INSIGHTS FROM MARCUSTODAY TEAM

IDEA OF THE DAY: The coronavirus is continuing to dominate and play into our primal fears stoked by the media. Is this another GFC style event? Too soon to say but no hurry to buy that’s for sure. Unless its toilet paper.

HENRY’S TAKE:One defensive stock in the box seat. Mandated price rises and although there are virus risks, it remains a quality monopoly asset. Plus the All Tech ETF kicks off soon, a look at the details.

STOCKS                                               

• ELD +2.56% still raining.
• SHL +3.39% broker upgrade.
• QAN +8.09% cuts more flights
• VAH -17.14% airlines under pressure.
• MFG -7.52% CS flags earnings risk for funds during volatility.
• CSL -0.73%% UBS still a bull. PT $365.
• SAR +5.93% GOR +5.09% golds shine.
• CUV +5.08% bounces back.
• ZNO -15.28% profit takers jump in.
• WZR -12.50% fintechs in trouble.
• FDV -7.61% irrational selling.
• Speculative stock of the day: Tesoro Resources (TSO) +117.65%. Gold grades increasing with depth, with last assay received is mineralised (1.21g/t Au), awaiting assays from 206.22m to 287.65m (EOH), contains visual alteration and sheeted veining associated with gold mineralisation. 23.0m @ 7.20 g/t from 183.22m. Goodish volume.
• Biggest Rises: CEN, SAR, WGX, RMS, GOR, CUV, EBO and RRL
• Biggest Falls: VAH, MOE, Z1P, OML, AVH, VUK and SXL

TODAY

• Not much on the corporate calendar.

ECONOMIC DATA

• The gap between the yield on Australian and US 10-year bonds has slumped to its lowest since July 2018. The yield spread has fallen to a mere 20bps, one-quarter off the 86bps gap traded at in July last year.
• The Australian Industry Group Australian Performance of Services Index lifted to 47 in February from 46.6 in January, the move marking another month of contraction. Drought, bushfires and the coronavirus outbreak weighing on the reading.
• Retail sales for January fell -0.3% from the previous month, missing market consensus of a flat reading.

• Credit rating agency S&P has suggested that Australia, Hong Kong, Japan, Korea, Singapore and Thailand will “enter or flirt with recession”

BOND MARKET

ASIAN NEWS

• The number of countries and territories to report one or more cases rose to 85, up from 76.

• No love lost here with S.Korea blasting Japan as irrational to quarantine its citizens.
• Singapore introduces new cleanliness rules to fight the CV19 outbreak.

EUROPEAN AND US NEWS

• OPEC agreed to cut oil output by an extra 1.5m barrels per day (bpd) in the second quarter of 2020.
• Global equity fund outflows increase now $23bn.
• Robinhood, the stock trading app, faces its first lawsuit. If you use a cut price service, you get a cut price service. Think the name should be a clue.
• One estimate is that CV19 could cost airlines US$100bn. Boeing will be seriously in trouble at this rate.
• Jamie Dimon has undergone emergency heart surgery. Not sure what they were looking for. Wonder if they found it?
• A poll finds that fear over healthcare costs in the US are rising dramatically. If you cannot afford to be treated, why get tested? 1 healthcare related bankruptcy every 30 secs in USA.

And finally…………

 

Clarence

XXX