ASX 200 rallied hard from the open after a historic 3000-point drop in Dow. The index rose 291 to 5293. Dow futures showing strong gains up 800 points. Banks led the charge as President Trump appeared to stand behind Boeing and other airlines, which steadied the wings. CBA up 13.3% and WBC up 8%. The Big Bank Basket back to $120.50. Other financials eventually joined the bank party with MFG up 3.1% and ASX up 12.6% as it enjoys huge volume surges. Miners too in demand as iron ore holding up against all odds. BHP up 11.9% and RIO up 6.9% together with FMG up 10.8%. Gold miners were also in demand after bullion seemed to find a base. NCM up 10.5% and GOR up 21.1%. Energy stocks were mixed as STO dropped another 5.3% and WPL up 5.2%. In the industrials, CSL better by 5.5% and TLS continue to find defensive buyers up 2.7%. Meanwhile panic buying in supermarkets is continuing to drive MTS up 27%, COL up 8.4% and WOW up 9.7%. REITs hit a wall with SCG down 7.7% and GMG down 0.6%. Tech stocks rallied too with the All Tech Index up 4.5%. Bond proxies suffered as TCL slipped 0.8% and SYD down 1% as the travel bans continue to bite. In corporate news a number of blue chips suspended guidance CCL down 0.1%, SHV rose after a crop update from Clarence Beeks rising 15.54%. Plenty of economic data out today with the ANZ Consumer confidence number remarkably stable only down 0.4% although still at its lowest level since 2009. AUD is trading around 61c and the 10-year bond yield is higher at 1.01% as the RBA releases minutes and supports credit markets again. Asian markets remain mixed with Japan up 1% and China up 0.4%.
- ASX 200 up 291 points as whiplash sets in.
- High 5304 Low 4997. Dow futures trade 800 points higher. Limit up.
- Banks lead the charge back. Big Bank Basket $120.50.
- Miners snap back. Whiplash to the max.
- Supermarkets in demand.
- Gold miners finally in favour.
- 10-year bond yields rise to 1.01%.
- Nymex crude up 4.4% in Asian trade.
- AUD rises to falls to 61.31c.
- Aussie gold slips to $2446.
- Bitcoin steady at US$5286.
- Asian markets better with Japan up 1% and China up 0.4 %.
- WAF +17.86% gold miners back in demand.
- MTS +26.97% supermarket panic buying.
- COL +8.44% WOW +9.72% upgraded by UBS.
- GOR +21.12% gold glitters.
- BHP +11.94% iron ore pricing.
- SHV +15.54% good harvest.
- URW -22.82% business update.
- DMP -9.47% delivery issues.
- CCP -7.84% funding issues perhaps?
- CBR – reprices capital raising to 150c from 210c.
- UNV -6.67% rejects offer.
- QAN -5.30% takes axe to international flights.
- VGL -16.22% suspends dividend.
- FNP +17.68% UHT milk demand high.
- ZNO +13.24% substantial sales growth.
- CVW +4.00% huge bounce off lows
- JIN +15.71% lotto jackpots and oversold.
- EHL +14.56% change in substantial shareholding.
- DEG +14.71% Hemi to grow.
- Speculative stock of the day: Wisr (WZR) +51.52% Business update. Positive, things continue to go well with good funding in place.
- Biggest Rises: MTS, GOR, SLR, NST, Z1P, RRL and RSG.
- Biggest Falls: URW, ARF, TYR, CHC, DMP, CGF, VAH and WOR.
- Fisher & Paykel Healthcare (FPH) +3.63% Guides FY NPAT NZ$274-280m vs prior NZ$260-270m. The company’s respiratory humidifiers and consumables are directly involved in treating patients with coronavirus. FPH has seen an increase in demand globally and manufacturing output has been ramped up.
- Qantas (QAN) -5.30% to make additional and much larger cuts to domestic and international flying schedules. International capacity will be cut by around 90% until at least the end of May 2020. Domestic capacity will be cut by around 60% over the same period. Represents the grounding of around 150 aircraft, including almost all of the group’s wide-body fleet.
- Coca-Cola Amatil (CCL) -0.1% withdraws earnings guidance given outbreak uncertainty, was expecting mid-single-digit EPS growth in 2020 and in the medium term.
- Crown Resorts (CWN) -1.65% to implement social distancing measures at Crown Perth entertainment complex.
- Ardent Leisure Group (ALG) +28.57% in a trading halt pending announcement on the impact of the social distancing measures.
- Santos (STO) -5.31% currently reviewing all discretionary capex activities and will be freezing new external hiring. CEO Kevin Gallagher said there were no plans for mass job cuts with STO over the last few years working to remain resilient at low oil prices.
- Click here to see the RBA meeting minutes from the March 3 meeting. While slightly dated given Monday’s developments, the RBA said it expects the coronavirus outbreak will have a significant effect on the Australian economy. COVID-19 was mentioned 24 times in the release.
- Australian Bureau of Statistics House Price Index for the December quarter: +3.9% vs consensus +4.5%, to be up +2.5% on year, in line with market estimates.
- ANZ-Roy Morgan Weekly Consumer Confidence recorded a surprisingly stable move, down only 0.4%. Government stimulus likey adding to the resilience following a 4.2% fall the week prior. The index is still at its lowest level since 2009.
- Capital Economics says the coronavirus crisis will lead to a rise in corporate defaults, warning Australian banks “aren’t well prepared to weather” loan losses. The economists say that 9% of business loans in Australia have direct exposure to the hotels and restaurants, as well as retail. According to the cheery souls at Capital, 16% of all bank loans are to sectors that are exposed or will be severely hit by CV19.
- S&P Global Ratings says Australian banks can absorb the increase in credit losses and disruption to funding markets without posing any immediate or significant threats to their creditworthiness. They went on to say though that the situation remains fluid.
- The New Zealand government has unveiled a $NZ12.1bn stimulus packed for the economy. The finance minister said that the best defence was the All Black back line and would be using that to boost the economy. Hard to argue with that.
- The award for stating the blindingly obvious goes to the RBA today with this comment it ‘expects the coronavirus outbreak will have a significant effect on the Australian economy.’
- The BoJ has unleashed US$30bn in liquidity into the financial system, the most since 2008.
- Japanese PM goes all vague on Olympics question. Wouldn’t be booking any tickets.
- The Philippines is the first country to close its financial markets.
EUROPEAN AND US NEWS
- Idris Elba has Cv19. Tom and Rita released from hospital after we saved Private Ryan.
- One consultant has warned that most airlines will be bankrupt by the end of May. Cheery thought. Trump backs Boeing and the airlines. Words so far not money though.
- The CEO of Solstein Capital LLC has called the equity market ‘uninvestible’, this happens when the VIX rises above 30 according to the fund.
- JP Morgan suggests that markets have bottomed in past recessions at PE multiples around 11.3 on average. Currently the US market is trading even after the 30a% falls at 15 times.
- Interesting moves in the betting market.
A woman gets on a bus with her baby. The driver says: ‘Ugh, that’s the ugliest baby I’ve ever seen!” The woman walks to the rear of the bus and sits down, fuming. She says to the man next to her: “The driver just insulted me!” The man says: “You go up there and tell him off. Go on, I’ll hold your monkey for you.”
A classic Tommy Cooper gag: “I said to the gym teacher: ‘Can you teach me to do the splits?’ He said: ‘How flexible are you?’ I said: ‘I can’t make Tuesdays.'”
A man walks into a bar with a roll of Tarmac under his arm and says: “Pint please… and one for the road.”
I met a Dutch girl with inflatable shoes last week. I rang her up to arrange a date, but unfortunately she’d popped her clogs.