ASX 200 started positively but ambushed and at the close down 214 points to 5726. Another sell off at the close. Dow futures turn negative as details scant on Trump’s stimulus plan, down 600. No show from Donald upsets traders. As US futures turned south after last night’s huge rise, the ASX gave back all of yesterday’s gains and some at the close again. The local stimulus package has fallen on deaf ears but there is more to come tomorrow. Much more if Sky News is to be believed. Banks again the target with CBA down 6.6% and WBC down 5.3%. The Big Bank Basket is now $127.70. 26% off peak. Miners too turned lower despite oil and iron ore gains, BHP down 2.5% and RIO down 1.1%. FMG up 2.6% remains a small voice of calm in the red sea. Consumer stocks under pressure with COL down 1.8% and ALL down 3%. Bond proxies too saw selling with TCL down 3.2% and SYD down 4.7%. REITs were mixed with GMG up 0.4% though SCG down 3.3%. Industrials came under pressure AMC down 7% the subject of a short selling raid and BXB -4.4% feeling unloved. The All Tech Index fell another 3.4%. APT down 8.6%, XRO down 0.4% and WTC -5.7% unravelling by the day. In corporate news, HLO down 7% and WEB down 5.2% both threw out guidance today as the travel ban extended to Italy and the slow down continues. CPU fell 3.98% after warning too of an earnings downgrade due to the recent savage cuts in interest rates. Plenty out on the economic front as consumer confidence slipped to its second lowest level although housing remains a bright spot. The 10-year yields back to 0.68%. AUD at 65.13c with Asian markets mixed Japan down 1.4% and China unchanged.

• ASX 200 down 214 points to 5726. Another strong volume day.
• High 5972 Low 5725. Another market on close sell off.
• Dow futures down 600.
• Broad based losses again.
• Big Bank Basket down to $127.70. It peaked above $172 recently.
• Miners hit again. Energy stocks off too.
• 10-year bond yields falling to 0.68%.
• AUD rises to 65.13c.
• Oil futures up 1%
• Aussie gold higher to $2559
• Bitcoin steady at US$7927
• Asian markets hit with Japan up 0.16% and China up1%.

STOCKS                                               

• QAN -9.21% travel bans bite. Macquarie cuts target by 40%.
• CIM -3.51% further on market buybacks.
• FMG +2.62% broker upgrade
• MSB -17.35% serious rethink.
• NST -5.11% EVN -7.52% GOR -9.92% everyone hates gold.
• JIN -8.91% came up lemons.
• NCM -8.61% Lihir issues again.
• EHL -11.30% high debt levels perhaps.
• OLI +49.23% bid from EG Group.
• IEL +1.57% broker upgrade.
• HM1 unchanged NTA 294c post tax.
• ECX -15.70% BNPL under pressure.
• SWM +22.73% fear sells.
• RAP -52.35% craters on bad news.
• AMC -6.95% attacked by short seller report from Spruce Capital.
• Speculative stock of the day: No volume in speculative stocks today.
• Biggest Rises: DTL, ASB, YAL, SDF, SIG and FMG
• Biggest Falls: MSB, PLS, NWH, Z1P, FXL and GOR.

TODAY

• Webjet (WEB) -5.21% withdraws FY20 guidance due to the uncertainty surrounding Covid-19. While forward bookings beyond three months remain in line with previous expectations, cancellations are now occurring at short notice prior to travel and therefore reducing visibility on future earnings. Implementing $10m cost reduction program for the remained FY20.
• Computershare (CPU) -3.98% FY20 management EPS to be down around 15% y/y vs prior guided -5% y/y. Given current yield curves CPU expects margin income revenue for FY20 to be around $185m versus $245m in FY19. Term deposits are providing some insulation from the impact of lower interest rates. In FY21, as term deposits roll-off and with the annualised effect of lower interest rates, CPU anticipates margin income revenue to be around $115m.
• Helloworld (HLO) –7.05% has withdrawn its full-year earnings guidance and reports it’s not possible to currently quantify the impact of the Covid-19 epidemic on earnings. The CEO taking a 30% salary cut, and executive management team taking a 25% pay cut.
• Oliver’s Real Food +49.23% just a week or so after being rejected by CTX, EG Group is back for a much smaller morsel in OLI with a cash bid of 10c. Non-binding etc but still. OLI are engaging with the EG Group over the offer an looked to have rolled over after an hour or so.

ECONOMIC NEWS

• Capital Economics believe the coronavirus outbreak and related disruptions in China will push the New Zealand economy into recession this year.
• S&P Global Ratings says Australia’s ratings are not under immediate threat despite saying a recession was ‘likely’ by June 2020.
• Home loan value has risen 4.6% in January, continuing the strong growth seen in the end of 2019. Owner occupier housing rose 5.0% in January, the eighth consecutive month of uninterrupted growth. Investor housing also strengthened in January, rising 3.6%.
• RBA deputy governor Guy Debelle has defended the use of monetary policy in the face of a supply side economic slowdown. He said that Monetary policy still works and believes that the exchange rate fall is also a significant factor.
• The Westpac-Melbourne Institute Index of Consumer Sentiment fell 3.8% to 91.9 in March from 95.5 in February.

Some perspective from WBC economists: “The second lowest level of the Index since the Global Financial Crisis when the Index bottomed out at 79, (with an average read of 86.8 over the period).Therefore, while clearly very concerned, consumers are, for now, taking a more balanced approach to the situation than we saw during the GFC. Other evidence of this can be found by comparing the ‘family finances’ and ‘time to buy a major household item’ components of the Index which registered 63.7 and 88.2 respectively at the low point of the GFC compared to the current reads of 82.7 and 111.4 respectively”.

BOND MARKET

ASIAN NEWS

• Hong Kong’s small business sentiment plunged to a record low in February of 20.3. Sentiment amongst retailers fell to 16.6.

EUROPEAN AND US NEWS

• Jokin’ Joe has won Michigan. Almost certain now to be the Democrat nominee.
• Many countries are throwing up export bans on mask sales. Before the crisis, China made around half of the worlds output at 20m masks. The U.S only has about 1% of the 3.5bn masks it needs to combat a serious outbreak, Health and Human Services Secretary Alex Azar has said. The country plans to buy 500m surgical masks and respirators for the national stockpile.
• Germany stopped a Swiss truck carrying 240,000 face masks bound for Switzerland and now Austria is calling on Germany to stop the export bans. Every man for himself it seems. South Korea, Germany and Russia have announced export bans of masks and other protective gear.
• Energy companies are not in “immediate stress” and financial markets are “not broken”, Goldman Sachs finance chief Stephen Scherr said. Debt in US producers has collapsed in price, putting US$110bn worth of bonds on the brink.
• Coachella has been canned. So too Dark Mofo. Olympics? Maybe. Still too early to call.

And finally…..

 

Showbiz update.

Superstar John Travolta was hospitalised for suspected COVID-19, but doctors now confirm that it was only Saturday Night Fever (he had chills, they were multiplying) and they wish to assure everyone that he is Staying Alive.

 

Clarence

XXX