ASX powered 101 points higher to 5488 after early jitters. A slow grind higher as FOMO seems to be kicking in. Dow futures up points helping sentiment. The banking sector was hit early after WBC cleared the decks with a fat write down but found its legs and rose % at the close. Others followed with CBA up 1.6% and NAB up 2.9%. The Big Bank Basket now $112.64 Other financials fared less well, MQG only up 2.3% and MFG down 1.5%. In the insurance sector, QBE is raising fresh capital and the sector missed out on the market’s bulls. Miners were the big winner today as gold hit 7-year high although in AUD terms not as spectacular, did not worry the buyers though who chased GOR up 14.6% NCM up 12.4% and NST up 14.1%. Elsewhere, BHP rose 0.5% and RIO up 1.6% with FMG up 2.0% the standout. In the techs, APT pleased the bulls with a business update and powered ahead by 29.1% followed by others in the BNPL sector. Z1P up 16.1% and EML up 4.8%. Meanwhile, IVF stocks soared after an update from VRT up 32.0% and MVF up 23.2%. In disruptive finance stocks WZR rallied 28.6% and PGL up 33.1% after being allowed access to the SME govt scheme. The All Tech Index rallied another 4.9%. REITS were all out of love as were energy stocks that seemed unimpressed with the OPEC plus production cuts. Not enough it seems. In corporate news, CAJ is raising money, VAH is trying hard to restructure its debt and QBE raising capital too. NAB released its business confidence survey showing a worse reading ever. Lower even than the GFC read. The 10-year yield rose to 0.92% and the AUD at 64.18c. Asia markets firm with Japan up 3.1% and China up 1.4%.
- ASX 200 up 101 to 5488.
- High 5491 Low 5360
- Dow futures up .
- Record fall in business confidence.
- Big Bank Basket up to $112.34
- Gold miners doing well. Bullion hits 7-year high.
- Oil futures up
- 10-year bond yields steady at 0.92%
- AUD rallies hard to 64.18c.
- Aussie gold rises to $2670
- Bitcoin drifts to US$6896
- Asian markets mixed with China down 0.3%, Japan up 2.1%.
INSIGHTS FROM MARCUSTODAY TEAM
MARCUS: The virus vibe is improving still with talk of the US relaxing restrictions on May 1. We see no technical or news-related reason to change our “All in” stance.
HENRY’S TAKE: A look today at GWA, plumbing and bathroom supplies. We hold the stock in the MT Model Income Portfolio. Recent updates have been hopeful although serious headwinds remain. Plus a look at how the Corona Six Packs are going. Exited MSB at 242c this morning.
TRADER TALK: Lessons from the great Brett Steenbarger on why you need to trade with a clear mind and check your preconceived notions at the door.
- WEB -9.86% pressure continues as capital raise weighs.
- APT +29.09% trading update.
- CTD +21.70% broker upgrade.
- Z1P +16.14% follows APT script.
- FLT +15.57% brokers turning positive.
- GOR +14.58% bullion rise.
- VAH – trading halt to restructure debt.
- HLS +14.15% trading update and dividend deferral.
- PET +3.51% appendix 3B.
- RSG +14.94% WGX +13.35% NST +14.07% bullion gains.
- MSB -6.00% profit-taking.
- SGP -3.64% liquidity boost.
- LOV -4.66% profit-taking after a huge run last week.
- INA -8.11% change of director’s interest.
- VRT +32.02% CV19 update.
- CSL -0.92% JP Morgan cuts PT.
- PGL +33.11% accessing government scheme.
- WZR +28.57% gets dragged up by PGL.
- MVF +23.21% higher on VRT news.
- PDN +27.40% uranium higher as production affected by CV19.
- DCN -47.06% capital raising. Ex entitlement.
- PPE -6.88% capital raising weakness.
- WAF +17.89% drill results.
- LVT +17.07% ARR up
- Speculative stock of the day: Mandrake Resources (MAN) +76.92% after a farm-in to target Ni-Cu-PGE mineralisation.
- Biggest Rises: APT, CTD, PRN, AGG, Z1P, FLT, JIN and RSG.
- Biggest Falls: WEB, INA, GOZ, MSB, CHC and MXT.
- Westpac (WBC) +1.94% Announces new increased provisions and asset write-downs. Expects a $1.43bn hit to H1 cash earnings. Provisions and costs associated with the AUSTRAC proceedings make up $1.03bn. Provisions for customer refunds, repayments and litigation make up $260m. Items are expected to impact CET1 ratio by ~(30bps).
- Jumbo Interactive (JIN) +15.13% non-executive chairman David Barwick to resign. Barwick will continue to serve as a Director and Non-executive Chairman until a suitable replacement is found by FY2020 AGM expected in October 2020.
- Afterpay (APT) +29.09% underlying global sales up 105% year on year to $7.3bn. Income margins for March and for FY20 YTD were higher than H1 FY20. Gross losses for March estimated to be approximately 1.0%, in line with H1 FY20. There was an increase in hardship claims in mid-March, but these are now trending down and overall levels remain within manageable parameters. Net Transaction Margin (NTM) on a FY20 YTD basis is approximately 2% (unaudited) and broadly in line with H1 FY20. Notes strong liquidity and balance sheet position, no need to raise capital. Estimated profitability on a YTD basis has increased relative to H1 FY20.
- QBE Insurance Group (QBE) – To launch $825m raising at 825c The offer forms part of a plan to bolster the group’s capital, reduce gearing and improve earnings resilience. Q1 trading conditions across the group strengthened. Premium rate increases averaged +8% vs +4% in 1Q19. Gross written premium increased by more than +9% to $4.533bn, reflecting premium rate increases coupled with solid volume growth assisted by improved retention in every division.
- InvoCare (IVC) – launches $150m underwritten placement at 1040c per share plus SPP to raise up to an extra $50m. To defer its FY19 final dividend. CFO Josée Lemoine will be departing the company before the end of this calendar year to pursue other opportunities
- G8 Education (GEM) +5.79% completes placement and institutional entitlement offer, raising $227m at 80c per share; take-up rate of 99.7%. The retail component of the entitlement offer will look to raise $74m and will open on April 20.
- Healius (HLS) +14.15% has experienced varying rates of volume decline in its businesses. COVID-19 tests and GP telehealth consultations partially offsetting drop in other presentations. To defer its interim dividend until October 15. Notes over $200m, in available liquidity and targeting bank gearing ratio below 3.0x for FY 2020. Essential healthcare services supported by Government funding initiatives.
- Pendal Group (PDL) +5.41% reports total group FUM $86.0bn at March 31 vs $101.4bn at December 31. Net outflows of $3.9bn. For the quarter, a more significant impact on the revenue of the business is the decline in FUM as a result of the sharp fall in global equity markets over the period.
- iSelect (ISU) +4.76% health business has maintained growth on last year, although the onset of COVID-19 and the late deferral of the annual premium rise has impacted the second half of March. Energy market continues to recover, Trail Asset remains stable. Q4 outlook difficult to predict, FY20 outlook remains uncertain.
- NAB Business Confidence Survey – Business confidence has fallen 64 points to -66. This is the lowest level ever and lower than the GFC. AUS seems unmoved on the survey number.
- Companies also reported a sharp decline in operating conditions, with the index falling to -20 points, consistent with the depth of the GFC, but still shy of the last recession, when the gauge dropped to -40 points.
- The one-year forward multiple is now at 16.1 times. Above December 18 low and the 10-year average.
- There are 70 CV19 Vaccines currently in development. 3 are already being tested in humans. Vaccines generally take around 10-15 years to come to the market.
- India has extended the lockdown until May 3rd.
- Hong Kong offers a HK$138bn Rescue/stimulus package to save jobs.
- Chinese trade data: The U.S Dollar trade balance recovered from a US$7.09bn deficit to a US$19.9bn surplus in March. Exports fell by 6.6%, year-on-year, following a 17.2% tumble in February. Economists had forecast a 14.0% decline. Imports slipped by just 0.90%, following a 4.0% fall in February. Economists had forecast a 9.5% decline.
- SoftBank has forecast record losses as its big start up bets misfire. The Vision Fund is set to report a Y1.8 trillion loss.Y800bn from WeWork and OneWeb. Softbank has forecast a record Y1.35 trillion (US$12.5 billion) operating loss for the fiscal year ended in March.
- North Korea has fired off a couple of missiles just to make us remember they are there., CV19 has been getting all the press.
EUROPEAN AND US NEWS
- Early European calls. FTSE futures up 84 DAX up 195. Around 1% higher..
- US Results season gets underway. Goldman says advanced economies will shrink about 35% this quarter from the prior three months, four times as much as the previous record set in 2008.
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