ASX 200 rallies 80 points to 5393 (+1.5%) as banks rebound ahead of ANZ result tomorrow. Credit ratings agencies helping sentiment along with the ease of the NAB capital raise. Dow Futures up 188 points. The big winners today were the banks as the Big Bank Basket rallied to $109.71 with NAB leading the charge up 6.3%. WBC joined in the fun up 5.2% after its big write off and hopes that no more money will be raised. Other financials tried hard to find the same enthusiasm with MQG up 2.4% and MFG up 2.2%. Insurers becalmed with IAG down 1.68%. The other big winning sector is the oil and energy sectors. WTI is rallying hard in Asian trade from a very low base, WPL up 6.0% and STO up 6.3%. OSH also showing a clean pair of heels with a 7.0% gain. In consumer stocks things were less buoyant as sector rotation from defensives to bombed out sectors is kicking in, COL fell 4.4% after easing toilet roll restrictions, WES eased too after CPI numbers showed the inflationary effects of hoarding which is now coming to an end. Healthcare stocks were mixed with CSL down 1.4% and ventilator makers FPH and RMD both easied as demand may have been overestimated. RHC looking better up 1.1% on a deal with the Victorian government. Miners were mixed as BHP bounced 2.1% along with FMG up 2.4% as Twiggy is funding test kits. Gold miners though falling as bullion slips and the AUD strengthens, NCM down 1.1% and NST eased by 2.3%. In corporate news, LLC returned to trade 8.8% better after tapping institutions for fresh funds. WAF had a great day on an African acquisition up 15.6% and DDR announced a great set of numbers, rising 6.4% In tech stocks, a somewhat muted day as they followed their US cousins, XRO down 1.55% but the All Tech Index up a mere 1.25%. In economic news, the CPI came in better than expected and over 2% for the first time in forever. Blame it on the bushfires, blame it on the sunshine, blame it on the virus or blame it on the boogie. The 10-year yield was stable at 0.92%. Tokyo closed today but China up modestly by 0.34%.

Today’s Highlights

• ASX 200 up 80 to 5393. Solid close on highs.
• High 5393 Low 5313. Decent volume. Month end approaches.
• Banks and oil lifting the market.
• Big Bank Basket rises to $109.71.
• WTI futures rally hard in Asian trade.
• Dow Futures up 188
• 10-year bond yields steady at 0.92%
• AUD higher at 65.35c
• Aussie gold slips to $2618
• Bitcoin firms to US$7848
• Asian markets better with Hong Kong up 0.11% and China up 0.34%. Tokyo closed for a holiday.

STOCKS                                               

• CWN +10.93% PE takes a 9.9% stake as Ho leaves.
• NAB +6.33% placement well supported.
• WAF +15.62% African gold acquisition.
• WOR +9.26% oil price rise.
• VUK +10.21% UK economic hopes improve.
• LLC +8.80% capital raise well supported.
• JHX 8.92 US reopening helps.
• COL -4.44% toilet roll restrictions ease.
• AVH -5.43% quarterly.
• ILU -1.51% quarterly.
• FPH -4.45% sector rotation.
• RMD -3.27% not as many ventilators needed perhaps.
• MMM -14.56% with an end to lockdown insight.
• WGN +26.71% bargain hunters as QLD reopens.
• HLO +17.87% travel bounce back.
• WZR +15.38% broker recommendations.
• MNY +13.64% broker report.
• ALG +10.17% internal flights to resume?
• REX +4.24% government support.
• PGL +10.98% bargain hunters.
• PSQ +12.18% lockdown to ease. Check-up time.
• Speculative stock of the day: The Go2People (GO2) +170.89%. Quarterly report, cashflow positive and first online training course developed. Solid volume.
• Biggest Rises: WAF, CWN, CTD, VUK, SGR, WOR and JHX.
• Biggest Falls: PRU, AVH, FPH, COL, SSM, BRG, RMD and ORE.

TODAY

• Coles (COL) –4.44% Q3 sales up 12.4% to $9.23bn vs year-ago, buoyed by panic buying in March. On a comparable growth basis, Supermarkets sales were +13.1% to $8.23bn, Liquor sales +7.2% to $740m and Express sales +4.3% to $256m. In the first four weeks of Q4, Supermarkets comparable sales growth has trended back toward the levels seen in the early part of the third quarter (pre-COVID-19). In Q4, expects an elevated cost base on the back of investment related to COVID-19 measures. Gross operating capex in FY20 is now expected to be in the range of $750-850m.
• Lynas Corp (LYC) +0.32%The Malaysian government has extended its shutdown order to May 12. Lynas Malaysia notes it has already implemented health and hygiene protocols that meet and exceed the Ministry of Health’s requirements.
• Credit Corp (CCP) – Is looking to raise $120m via institutional placement and $30m via SPP at $12.50/share. Notes all segments performed strongly prior to the COVID-19 pandemic. The initial impacts have resulted in AUS/NZ debt collections falling (15%) below pre-COVID-19 expectations with the US (16%) below previous expectations. Consumer loan application volumes have halved and, together with tighter underwriting, have led to an (80%) decline in loan settlements over recent weeks. Arrears have increased by 2ppts but currently remain within Pro-forma expectations. Cost reductions of $2m per month have been implemented.
• A.P. Eagers (APE) +5.14% Lowers price of refrigerated logistics business to $75m, previously $100m.
• Regis Resources (RRL) +0.89% Q3 gold production 86,300oz vs quarter-ago 90,849oz. AISC for the quarter was $1,174/oz (Dec 19 $1,219/oz). The decrease was driven by lower strip ratios and ore stockpile build-up at Duketon South. On track to deliver production guidance for the year between 340-370koz. AISC expected to be at the upper end of the guidance range of $1,125 to $1,195 per ounce after excluding the impact of higher gold prices on royalty costs.
• Avita Medical (AVH) -5.43% Q3 revenue $8.1m vs consensus $7.8m. Commercial efforts in Q3 progressed well with quarterly growth exceeding 20% across both procedural volume and U.S. RECELL System revenue.
• Crown Resorts (CWN) +10.93% confirms that investment firm Blackstone purchased a 9.99% stake in the company at a price of $8.15 per share
• Iluka Resources (ILU) -1.51% Q1 Zircon/Rutile/Synthetic Rutile (Z/R/SR) production of 153 thousand tonnes was down 16% from December quarter 2019. Total Mineral Sands revenue was down 41.2% to $232.2m vs quarter ago. Retains a strong financial position, with no net debt and $548m of facilities available.

ECONOMIC NEWS

• A rise of 0.3% in the March 2020 quarter Consumer Price Index (CPI) reflected the impact of drought and bushfires on some food prices and the early effects of COVID-19. Annual inflation rose 2.2% in the March 2020 quarter. No surprises here either. Most notably, rises were seen in, other non-durable household products (+3.4%), which includes toilet paper; personal care products (+2.2 %), which includes soap and hand sanitiser; and other cereal products (+4.4 %), which includes rice and pasta.
• The most significant price rises in the March quarter were vegetables (+9.1%), tobacco (+2.0%), secondary education (+3.4%), and pharmaceutical products (+5.1%).
• The most significant price falls in the March quarter were automotive fuel (-6.0%), domestic holiday travel and accommodation (-3.1%) and international holiday travel and accommodation (-3.0%).

• Australian dividend forecasts have been cut the most since 2009. Dividend forecasts have been lowered 25% from a year earlier, the biggest cut since a 29% reduction in 2009, according to data compiled by Bloomberg.

CV19 NEWS

• More people have died in the US now than during the Vietnam war.
• President Donald Trump signed an executive order requiring meat-processing plants to stay open. He said in a Twitter post that “the only reason the U.S. has reported one million cases of CoronaVirus is that our Testing is sooo much better than any other country in the World.”
• Germany’s government will extend a travel warning for tourist trips abroad “until further notice” and at least until June 14.
• Brazil saw the total number of deaths from the virus surpass 5,000 after reporting 474 deaths over 24 hours.
• The U.K. government is about three weeks from releasing the tool it says is essential to easing the current coronavirus lockdown.
• The U.S. Treasury Department is planning to instruct people whose deceased relatives received coronavirus stimulus payments to return the money to the federal government.

BONDS

ASIAN NEWS

• Samsung Electronics Co. warned earnings may decline this quarter after the coronavirus outbreak hurt demand for its smartphones and gadgets.
• Standard Chartered results and it believes credit market dislocation will continue ‘for some time’.

EUROPEAN AND US NEWS

• Modest rises ahead for European markets
• Deutsche ditches dividend. Fitch cuts Italian Credit Rating to one above Junk.
• Fed meeting continues. Suspect this may be talked about.

• VW quarterly today: Operating profit before special items in the quarter fell to EUR900m (US$975 million) from EUR3.9bn the previous year, the German carmaker said. Earnings before tax fell to EUR700m for the quarter, compared with EUR4.1bn a year earlier.
• 20% drop in deliveries. Still expects to be profitable on FY basis. Reopens Europe’s largest factory in Wolfsburg.
• Airbus swings to a net loss and abandons dividend and guidance.
• AstraZeneca reaffirms guidance. A positive.

And finally

“It’s been wonderful being at home with my missus these last 4 weeks…

… we’ve had a chance to catch up with all the things I’ve done wrong over the last 15 years….”

Clarence

XXX