ASX 200 down 421 points to 5305 as stimulus fails to avert selling and Trump hits Europe with a travel ban. US futures pointing to another horrible session down 750 points, after POTUS addressed the nation and banned all travel to and from Europe for 30 days. Tom Hanks and his wife have also been diagnosed with CV19, sending more shock waves through markets. Huge broad-based selling escalated after the governments’ stimulus package failed to calm nerves as Trump gave his best shot. Locally tech stocks fell in a heap with the All -Tech Index falling 7.5% led by losses in APT down 11.6% and XRO down 1.4%. Banks were another obvious target with CBA falling 7.9% and WBC down 8.8%. The Big Bank Basket down to $117.24. Miners too were not spared the sword with BHP down 7.7% and FMG down 6.5% after succumbing to gravity. Energy stocks fell as expected as NYMEX oil futures tumbled 5%. WPL down 9.1% and STO down 7.9%. CTX issued a business update and slipped 9.4%. Doubts now about the Canadian bid seem to be overwhelming. Industrials were under extreme pressure with WOW down 3.7%, COL down 3.3%, AMC down 9.1% and ALL down 11.6%. In corporate news, SOL issued a downgrade together with BKW with falls of 4.5% and 4.5% respectively. In other news, Bell Potter closed down its Sydney office on CV19 fears, 3 team members of the Haas F1 team have tested positive to the virus. On the economic front, Scott Morrison unveiled the stimulus strategy pumping in $11bn by the end of financial year with a combination of cash splash and business handouts. In the US, Trump announced interest free loans to small business, a travel ban, and urged people to wash their hands and stick together. 10-year yields here rally to 0.75% and the AUD understandably under pressure at 64.57c. Asian markets threw in the towel with Japan down 4% and China down 1.7%.
- ASX 200 drops 421 points to 5305 as stimulus fails to halt selling.
- High 5706 Low 5290. Huge range. Huge volume. More on close computer selling.
- Dow futures down 750.
- Broad based losses again. Trumps address accelerated selloff.
- Big Bank Basket down to $117.24. It peaked around $172 recently. 32% down from highs.
- Miners hit again. Energy stocks off too.
- 10-year bond yields rise to 0.75%.
- AUD rises to 64.57c.
- Aussie gold slips to $2534
- Bitcoin falls to US$7652
- Asian markets hit with Japan down 4% and China down 1.7%.
- FLT -18.22% travel bans kill business.
- CTD -9.57% similarly afflicted.
- BKW -4.54% SOL -4.47% cross shareholdings no help in CV19.
- CPU -8.81% Macquarie downgrades
- VRL -14.98% large gatherings a issue.
- SBM -13.04% NCM -8.71% NST -7.08% gold miners buried.
- APT –11.65% ‘SNBL’ (sell now buy later) hit hard.
- PBH -22.22% NBA season suspended.
- Z1P – 18.82% will these guys have the same credit lines?
- BRG -6.51% Bell Potter says sell off overdone.
- WZR -12.38% easy money fintechs under pressure.
- WAM -4.81% NTA still trading at a premium. Crazy.
- AU8 -8.16% shuts 11 out of 15 stores in Daigou fall out.
- Speculative stock of the day: Nothing exciting. No volume again.
- Biggest Rises: Yes, there were some. CIM, SM1, PME, OFT and ZIM.
- Biggest Falls: WEB, Z1P, FLT, VAH, IFL, SGR and TYR.
- Washington Soul Pats (SOL) -4.47% half year net profit after tax for the period ending 31 January 2020 is likely to be in the range of $45m-$55m. The regular net profit after tax attributable (excluding the impact of non-regular items) is likely to be in the range of $120m-$130m. Regular profit has been impacted this year by reduced earnings from all of the major investments including NHC where results were down 51% as a result of coal prices falling 40% throughout the 2019 year, and ABC where results have not been released yet but it will be impacted by the cross-shareholding in SOL.
- Brickworks (BKW) -4.54% expects to report 1H2020 Statutory NPAT approximately 49% below the prior corresponding period; and 1H2020 Underlying NPAT from continuing operations approximately 37% below the prior corresponding period. It notes that this updated guidance from SOL will have a flow-on impact on its earnings for the first half, through the equity accounted profit of its 39.4% shareholding in SOL. Brickworks Building Products Australia earnings are expected to be at a low point in 1H2020 (and significantly below the prior corresponding period) due to high energy costs, low building activity, particularly difficult conditions in WA and extensive plant shutdowns to complete maintenance and upgrade works.
- Caltex (CTX) –9.37% Trading update – Australian jet fuel demand has been impacted by flight cancellations domestically and internationally. As advised at the 2019 full-year results on 25 February 2020, we have been seeing demand reduction of jet fuel of 5-10% for the Australian industry. The February 2020 Caltex Refiner Margin (CRM) was US$4.14/bbl, below the January 2020 CRM of US$5.78/bbl and the prior year comparative (February 2019: US$7.34/bbl). Regional refiner margins are at risk of continuing to be impacted by lower global demand for hydrocarbons. Recent reports by airlines, including announcements from QAN about reduced capacity and services, indicate that demand for jet fuel may drop further in coming weeks. This deterioration will be interesting to ACT and may cause them to reassess their bid proposal. The other suitor EG Group from the UK made a small acquisition here yesterday bidding for OLI.
- Reliance Worldwide (RWC) –12.19% Following a review of the group’s financial and strategic objectives, CFO Gerry Bollman will leave the company. Andrew Johnson has been appointed Interim Group CFO while the company commence a search for a new Group CFO.
- A2Milk (A2M) -4.39% has entered into an exclusive licensing agreement with Agrifoods Cooperative for the production, distribution, sale and marketing of a2 Milk™ branded liquid milk for the Canadian market as was announced by Agrifoods overnight. A2M will provide Agrifoods with access to its IP and marketing assets as well as its proprietary systems and know-how relating to the sourcing and processing of a2 Milk™ and will work with Agrifoods and local Canadian dairy farmers to source milk locally. No business update needed with the announcement so that is a positive.
- Santos (STO) –7.94% Late announcement that it has agreed to sell 25% of the Darwin LNG and Bayu-Undan to SK E&S for US$390m.
- NAB slashed its global growth forecasts. Now expecting a large fall in China GDP in Q1, recessions in the Euro-zone and Japan and much lower growth elsewhere in H1, with risks skewed to the downside.
- Nearly a fifth of Australians aged 65 and over and working in 2006 were working ten years later, according to new analysis released today by the Australian Bureau of Statistics (ABS).
- This reflects a doubling of the proportion of employed people who were older (65 years and over), between 2006 and 2016, from 2% to 4% of all employed people.
- India will stop border crossings to contain the CV19 outbreak.
- Still training for Tokyo Olympics? maybe pause a little.
EUROPEAN AND US NEWS
- European markets looking at very weak openings as expected.
- Trump blames Europe for ‘foreign’ disease and stops entry in US. Trade spared thankfully.
- Global equities are now on course for the second-worst week since the global financial crisis in 2008, only eclipsed by the rout in the last week of February.
- Tom Hanks and his wife have tested positive for CV19.
- NBA Season suspended.
- PepsiCo is buying Rockstar Energy Beverages for $3.85bn.
- Italy goes all in and closes all shops and restaurants as health system cannot cope.
- Boeing now becoming a real issue with the company now having to draw down a US$13.8bn loan and preserve cash.
- UK Budget is the ‘kitchen sink’ moment. Everything thrown at the economy.
- Over to you ECB. Mind how you go. So far stimulus has fallen on deaf ears.
Not much to laugh about…even Tom Hanks has caught CV19 while filming an Elvis movie on the Gold Coast.
He’s caught in a trap. Can’t get out…