ASX 200 down 272 to 4546 as some buyers step back in. US futures rallied off limit down lows as Congress knocks back package. Dow futures still off 800 though. Some patches of green appeared amongst the red this afternoon, as some bargain hunters emerged. CSL rallied off lows to close up 4.2% and other healthcare stocks followed, FPH up 1.9% and SHL up 6.3%. Miners were surprisingly mixed with some gains in BHP by 0.1% and NCM up 4.5% as gold miners were a bright spot. BSL fell 14% and RIO dropped 4% though. Energy stocks remain under pressure led lower by WPL down 4.6% and STO down 4.3%. Banks were sold down heavily as credit markets and bad debts are a flash point. The Big Bank Basket dropped to $96.34 with CBA off 9.4% and NAB down 11.4%. Industrials were hit hard across the board but some escaped, SYD rose 2.7% after issuing a business update. In corporate news, we saw company after company hit the market with guidance updates and withdrawals. CTX had a trading update and dropped 7.3%, FMG fell 7.7% after an update, SGP withdrew guidance and down 16.1% and ALX down 17.7% as traffic dries up in Europe. The stimulus package was all the go over the weekend to salvage the economy but big lines at Centrelink not helping sentiment. Bars, restaurants and clubs now closed. Eerie out there. Nothing on the economic data front. Stimulus is continuing. Feels like an AED when the patient is already dead. In the bond markets, 10-year yields fell back to new lows of 0.87%. AUD relatively steady at 57.59c. Asian markets mixed with Japan up 2.7% and China down around 3%. Japan benefitting from lower yen as USD find safe haven buyers again.
- ASX 200 down 271 to 4546. Another big volume day.
- High 4761 Low 4402. Rallies from lows but not convincing.
- Dow futures down 800.
- Waiting for US package to pass.
- Banks fall hard but off lows.
- BHP bucks trend. Healthcare in demand.
- 10-year bond yields tumble to 0.87%
- AUD bounces hard to 57.59c.
- Aussie gold rises to $2593
- Bitcoin drifts to US$5938
- Asian markets mixed with Japan up 2.7% and China down around 3%.
- OML – rights issue on the cards.
- SXL -32.65% waiting for news.
- EXP -21.57% suspended and working with all governments to contain fallout.
- FDM – calls in receivers.
- FLT – cancels dividend payment. Saves $40m.
- BIN -4.96% withdraws guidance as cafes and restaurants close.
- VVA – gyms close, withdraws guidance.
- VAH unchanged suspends Alliance Aviation leases.
- CUV +4.9% launch of SCENESSE in USA.
- CIM +6.9% Hola. Spanish buying?
- SYD +2.67% CV19 update.
- CCP -36.42% change of director’s interest.
- APT -28.46% change in substantial holding form MS.
- ABP -25.95% withdraws guidance and distribution update.
- MXT -25.15% daily fund update.
- EHL -34.62% debt kills.
- SHL +6.32% healthcare in focus.
- Speculative stock of the day: Marley Spoon (MMM) +51.19% CV19 sales update. Unprecedented surge in demand of home delivery products. Q1 2020 revenue is expected to be above EUR 42.0m, showing accelerating growth of more than +40% year-on-year compared to Q1 2019, with only the last two weeks of March showing the benefits of the recent surge in demand. Customer acquisition costs are falling dramatically. No need to advertise.
- Biggest Rises: NIC, CIM, SHL, CUV, RNS and NCM
- Biggest Falls: CCP, APT, CHC, ABP, MXT, PMV and CGF.
- Select Harvests (SHV) -1.51% Confirms all facilities and almond harvest will continue to operate. They are exempt from the lockdowns and border restrictions recently announced by the State and Federal Governments.
- Charter Hall Long WALE REIT (CLW) -9.49% reaffirms FY20 Operating EPS guidance of 28c per share.
- Tabcorp (TAH) -13.15% unable to provide guidance. Is looking to mitigate the impact of social distancing measures by reducing operating and capital expenditure where it reasonably can, encouraging retail customers to use digital alternatives.
- Flight Centre (FLT) – cancels fiscal year interim dividend of 40c per share; trading in the company’s shares will remain suspended. FLT’s senior leaders have agreed to a 50% pay-cut.
- Fortescue Metals (FMG) -7.73% notes shipments continue from Port Hedland and mining and processing activity remains in line with FY20 guidance.
- Helloworld (HLO) –19.08% to stand down approximately 1,300 or 65% its workforce. All remaining personnel will be offered reduced hours. The CEO and Executive Director will take no salary. All discretionary expenditure has ceased. Marketing and Advertising activity has ceased until further notice.
- Bingo Industries (BIN) -4.96% withdraws FY20 earnings guidance due to uncertainty.
- Myer (MYR) +4.21% responds to questions about its financial stability. “our balance sheet is in a strong position, we have reduced debt, and have significant liquidity within our financing facilities, and banks are supportive of our plans. Any suggestion to the contrary is just not true.”
- SKYCITY Entertainment Group (SKC) -15.17% to close its Adelaide casino, withdraws guidance. Preparing for the potential closure of its New Zealand properties should the Government raise the COVID-19 Alert Level.
- Link Group (LNK) -13.46% withdraws FY20 guidance given the challenges in forecasting revenue streams. Notes its liquidity position is supported by cash reserves and committed undrawn credit facilities.
- The Reject Shop (TRS) –4.85% In the last four weeks, TRS has experienced a material increase in sales driven by customer concerns around coronavirus. Comparable sales over that period were up 36.1% on the back of strong demand for cleaning, toiletries and pet care products.
- Atlas Arteria (ALX) –17.68% Given the current uncertainty regarding the length and depth of the pandemic and its impact on traffic, ALX said it would defer its H2 distribution until further notice. ALX to also suspend guidance for the H1 until there is further clarity around the impact of the policy responses to contain the COVID-19 pandemic.
- Ardent Leisure Group (ALG) -35.90% to temporarily cease operating Dreamworld and Whitewater World following the Queensland State and Federal Government’s measures regarding social distancing. All non-essential capital expenditure has been suspended.
- Stimulus rules.
- This is where we were three weeks ago. Happier times.
- The Reserve Bank says it will buy up to $4bn of bonds in the following maturities: May 2021, December 2021, April 2027 and November 2028.
- The National Australia Bank (NAB) converted $750m in hybrid capital into equity at less than favourable prices. Whilst the move had been flagged the price it converted at was 2134c, a far cry from the recent price.
- The Bank of Japan will inject liquidity into the financial system of the world’s third largest economy through 800 bn yen (US$12.7 billion) worth of “repos”.
- Looking more and more like the Japanese Olympics will be ‘postponed’ for a year.
- Singapore Air has shut 96% of capacity.
- India halts trading as open looks to be limit down, 10%. South Korea was limit down but recovered.
EUROPEAN AND US NEWS
- In a crazy less than helpful development, the Democrats in Congress have blocked the US$1.8 trillion stimulus package. 47 v 47. It needs 60 to get up. Elizabeth Warren has called it a Republican proposal not a bipartisan proposal. Should get through tonight and may see a rally in sentiment if it does.
- The Chinese ambassador in US has said that to spread rumours that the US army is to blame for CV19 in Wuhan is ‘crazy’. This comes after a Foreign Ministry spokesman questioned whether the virus emanated in China or was introduced by US army athletes at the Military games back in Wuhan in October. Not useful to have US and China pointing fingers at each other.
- One Real Estate billionaire, Tom Barrack, has warned that the US commercial mortgage market is on the brink of collapse and has predicted a ‘domino effect’ if the banks do not take prompt action. Barrack, chairman and chief executive officer of Colony Capital Inc., warns in a white paper of a chain reaction of margin calls, mass foreclosures, evictions and, potentially, bank failures due to the coronavirus pandemic and consequent shutdown of much of the U.S. economy.
The man approached the very beautiful woman in the large supermarket and asked, “You know, I’ve lost my wife here in the supermarket. Can you talk to me for a couple of minutes?” “Why?” “Because every time I talk to a beautiful woman my wife appears out of nowhere.”
A newlywed couple moves into their new house. One day the husband comes home from work and his wife says, “Honey, you know, in the upstairs bathroom one of the pipes is leaking, could you fix it?”
The husband says, “What do I look like, Mr. Plumber?” A few days go by, and he comes home from work and his wife says, “Honey, the car won’t start. I think it needs a new battery. Could you change it for me?”
He says: “What do I look like, Mr. Goodwrench?” Another few days go by, and it’s raining pretty hard. The wife finds a leak in the roof. She says, “Honey, there’s a leak on the roof! Can you please fix it?”
He says, “What do I look like, Bob Vila?” The next day the husband comes home, and the roof is fixed. So is the plumbing. So is the car. He asks his wife what happened. “Oh, I had a handyman come in and fix them,” she says. “Great! How much is that going to cost me?” he snarls.
Wife says: “Nothing. He said he’d do it for free if I either baked him a cake or slept with him.”
“Uh, well, what kind of cake did you make?” asks the husband. “What do I look like,” she says, “Betty Crocker?”