ASX fell 21 points today to 5467 (-0.4%) after the IMF forecasts and consumer sentiment took some of the wind out of the sails. Bit of a closing rally save some blushes. Dow futures down 129. Banks once again under some pressure with the Big Bank Basket dropping to $111.85. CBA down 1.1% and WBC up 0.1%. Other financials sold off too as QBE put away its US$750m capital raise and fell 3.5%. MFG down 3.8% and MQG down 0.8%. Insurers slightly weaker led by SUN down 1.5%. CSL led a mixed healthcare sector falling 0.6% whilst SHL rallied 3.9% together with FPH up 1.9%. Energy stocks under pressure as expected due to the overnight falls in the oil price, STO down 3.7% and WPL down 3.5% although oil futures are showing some signs of bouncing off $20 again. Industrials were very mixed. Some losses in REITs with GMG down 2.0% and MGR down 1.75% although SCG up 2.9%. Other bond proxy stocks were mixed too SYD up 1.4% and TCL down 0.2%. Miners failed to fire with BHP down 0.7% and RIO down 1.2%. Gold miners consolidated yesterday’s huge runs with NCM up 1.7% and NST down 0.8%. Tech stocks mixed too, XRO up 0.6% and CPU up 2.2%. The All Tech Index rose 0.4%. In Corporate News, EOS is raising money, APX reaffirmed its earnings falling 1.1%, whilst in economic news, the government sold a record amount of 2024 bonds and the consumer sentiment number tumbled together with the IMF downgrade to global growth. The 10-year yield was steady around 0.90% and the AUD is clinging to 64c. Just. Asian markets were modestly weaker with Japan down % and China down %.
- ASX 200 down 21 to 5467
- High 5533 Low 5416 Narrow range. Volatility and volumes easing.
- Big Bank Basket $111.85
- Miners sag a little. Energy under pressure. Golds consolidate.
- Industrials mixed.
- 10-year bond yields steady at 0.91%
- Oil futures up 2.1%
- AUD clings to 64.04c
- Aussie gold knocking on heaven’s door $2694
- Bitcoin drifts to US$6907
- Asian markets slightly weaker with China down 0.3%, Japan down 0.1%.
- EML +7.20% change of directors interest.
- LYC +5.19% quarterly report.
- VGI +13.79% FUM makes good reading.
- TYR +8.02% change of director’s interest.
- WEB +4.53% finally a bounce.
- AIZ +15.15% good bounce on opening hopes?
- LOV +9.11% rally resumes.
- CTD -8.67% switching into WEB perhaps.
- JIN -8.46% no lotto win.
- CGF -6.89% ceasing to be a substantial shareholder.
- WOR -5.35% oil price woes.
- APX -1.08% restates earnings guidance.
- MFG -3.79% MS cuts price target.
- URW -9.21% retail malaise and consumer confidence.
- ZNO -8.90% threat is fading slightly.
- PPE -6.04% selling continues. Structural issues.
- CHN +83.19% returns to boards after significant Ni Palladium discovery.
- SWM +30.95% talking to lenders.
- APT -1.83% broker research. Some good, some bad.
- PDN +23.66% uranium production cuts.
- MX1 – raising $15m
- ALG +29.17% bargain hunting on opening hopes.
- Speculative stock of the day: Predictive Discovery (PDI) +733.33% Outstanding drill results in Guinea. 46m at 6.58g/t. 10m at 26.5g/t. Gold intercepts at least 450m long and open in all directions. Only drilled to 50m in a 24-hole RC program.
- Biggest Rises: AIZ, VGI, CEN, LOV, INA, CRN and TYR.
- Biggest Falls: URW, CTD, JIN, BSL, CGF, FLT and BPT.
- Bank of Queensland (BOQ) –1.93% Says its intent to pay dividends remains unchanged, subject to completing stress testing with APRA. If an interim dividend is paid, BOQ anticipates a lower payout ratio than the target 70-80% range previously disclosed.
- Bubs Australia (BUB) +5.17% Q3 revenue up 67% year on year to $19.7m. Notes a significant increase in demand through all channels, with direct sales to China more than doubling. Australian sales up 34% year on year, representing 64% of gross sales for the quarter. China sales up 104% year on year, representing 24% of gross sales for the quarter. Points a solid supply chain with minimal disruption to manufacturing operations.
- Woolworths (WOW) +0.19% Sells two shopping centres for $60m as part of the company’s property rationalisation program. Two more shopping centres are up for sale in the offering which is worth $130m in total.
- Oz Minerals (OZL) +2.46% reports Q1 copper production of 20,231t. Gold production came in at 55,606oz. Prominent Hill delivered strong gold production with negative C1 costs; copper production in line with plan. Carrapateena plant ramp-up was ahead of schedule. No material production impacts experienced following the global COVID-19 outbreak. Deferred US$150m of 2020 capital and operating costs following its COVID-19 response review. All operations remain on track for 2020 production guidance based on current operating conditions.
- Australian Finance Group (AFG) +4.71% Q3 mortgages lodged 28,344 vs year-ago 23,036. Lodgement volume $15.40bn vs year-ago $11.61bn.
- QBE -3.51% completes its US$750m institutional placement of around 145.5m new fully paid ordinary shares at 825c per share.
- Appen (APX) -1.08% restates FY20 guidance of underlying EBITDA between $125-130m.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 17.7% to 75.6 in April from 91.9 in March. The single biggest monthly decline in the forty-seven-year history of the survey. Details of the survey all reflect large shocks to jobs and spending. WBC economist Bill Evans had this to say “while the drop in confidence this month is severe, it could well have been worse. A clear slowing in new cases indicates policy measures are working to contain the spread. Giving support to WBC’s view that the Australian economy will lift in the December quarter following three consecutive quarters of economic contraction.
ANZ-Roy Morgan weekly consumer confidence lifted for a second consecutive week, up 9%, buoyed by fiscal stimulus and flattening of the pandemic curve. ANZ economist David Plank had this to say ” confidence is now up close to 20% from the historic low reached over the last weekend in March. Despite this, it is still some way below the levels seen during the GFC.”
- Global airline industry passenger revenue will plummet 55% this year, according to the latest IATA forecast. Worldwide losses among passenger airlines could rise by another 25% to $493bn.
- China Reports 46 New Cases, 1 Death. Most are citizens returning from Russia.
- The government sold its biggest amount of bonds ever today, with a record of $13bn of November 2024 debt sold at a yield to maturity of 0.47%. No shortage of demand either with $25.8bn bid for.
- The previous record was for $11bn in 2017.
- The PBoC offered 100 billion yuan (US$14 billion) via the one-year medium-term lending facility, cutting the rate to 2.95% from 3.15%.
EUROPEAN AND US NEWS
- The UK Office of Budgetary Responsibility (OBR) has forecast the UK economy could shrink by 35% in the 2nd Quarter resulting in a further 2m unemployed. OBR says UK facing the worst recession in 300 years.
- Government deficit could be GBP273bn in 2021. 14% of GDP.
- UK could be underestimating CV19 casualties as official numbers are just from the hospital and confirmed cases.
- French retail sales dropped 24% in March.
- Things continue to get more bizarre from the White House. After cutting WHO funding because it did not get serious enough quicker, Trump has now asked the Treasury to sign all the emergency payment cheques with his name. The first time ever this has happened and it will delay the printing of the cheques by a couple of days.
- The forward P/E of the S&P 500 rose to 18.1 yesterday up from the March 23 low of 12.9 and down only slightly from the February 19 high of the year according to Yardeni Research. It is now forecasting S&P 500 earings of $150 for 2021. 2020 forecasts have fallen from $163 to $120 recently.
- Saudi apparently offering customers big discounts again. Not helpful.
- Obama has endorsed ‘sleepy’ Joe Biden.
- Airbus has raised another US$1bn. Did the same a week ago to help it survive.
- GSK and Sanofi team up to create a vaccine. Moderna CEO says a vaccine will not be ready until 2021 at the earliest.
- Amazon hits all-time high. Market cap US$1.1 trillion.
- US banks getting ahead of the curve with provisioning. European banks fudging the loan provisions and a long way behind. Zombie banks in Europe to continue.
A man walks into a police station and announces, “My wife’s gone missing.”
The police officer says, “OK sir, we’ll help you. Since when has your wife been missing?”
The man replies, “Since about a month ago.”
The police officer is shocked, “What? A month?! Why on Earth are you coming only now?!”
“Well… I’ve no clothes to put on anymore.”
A man goes to his doctor and says, “Please help me, doctor. I think my eyesight is really worsening.”
The doctor asks the man to come and look out of the window. “Tell me what you see there,” says the doctor and points.
“I see the Sun,” answer the man.
The doctor turns to him and asks, “Sweet Jesus, how much further do you want to see?!”
Two elderly ladies, Mabel and Evie, meet at a café for a nice cup of coffee and a cake.
After a while, Mabel peers closely at Evie and says, “Evie, it looks like you have a suppository in your ear!”
“It looks like you have a suppository in your ear, Evie!” says Mabel a bit louder.
“Oh,” checks Evie, “you’re right! Drat, well, at least I know where my hearing aid is now.”