The ASX 200 falls 58 to 5403 (-1.1%) after an afternoon rally off lows. Dow Futures down 100 points. Banks were again a drag as the Big Bank Basket fell to $105.96. CBA down 0.7% and MQG slipping 4.1%. Insurers too in the doghouse SUN down 4.8% and QBE down 2.0%. Miners under pressure with BHP down 2.6% and RIO down 1.65%, energy stocks too under pressure with WPL down 1.3%, and STO down 3.2%. Healthcare doing well with CSL up 1.8% and FPH up 1.9%. Tech stocks saw some profit-taking led by APT down 1.2% and WTC down 2.3%. The All Tech Index fell 1%. Consumer stocks were mixed with defensives to the fore, COL up 1%, and WES down 0.3%. In corporate news, KGN aced it again up 5.9% after a business update, IPL returned to the boards and fell 6.4% as did ELO down 11.5% after it faced the music. NWH fell 6.7% after a director interest update and CSR rose 10.1% on a dividend interrupted and a slight decrease in profits. In economic news, we saw a sixth straight weekly gain in consumer confidence, a NAB business survey showing that maybe we have bottomed, and the Treasurer was out and about warning us of the costs of a second wave. The 10-year bond yield dropped to 0.94% and the AUD came under pressure as the row with China took a nasty turn with a ban on our beef. In Asia, we saw Japan down 12% and China slips slightly down 0.23% after CPI and PPI numbers.
- ASX 200 down 58 to 5403.
- High 5461 Low 5374. He giveth and he taketh away.
- Banks suffer yet again. Healthcare doing well.
- Miners sell off. Energy losses some.
- Tech stocks under some pressure.
- All Tech down 1%.
- Dow futures down 109
- 10-year bond yields fades to 0.94%
- AUD slips to 64.81c on beef wars.
- Aussie gold rallies to $2625
- Bitcoin finds support, rallies to US$8729.
- Asian markets mixed with Japan up 1.5% and China down 0.1%. HK firms 1.6%
- AAC -3.70% beef ban from China
- ELD -2.32% repercussions from CV19 inquiry call.
- SCG -3.51% MS remains overweight.
- MQG -4.06% pulls out of Virgin deal.
- AX1 -5.60% Brett Blundy resigns.
- AQG -4.62% merger with SSR
- ELO -11.50% returns to trade and rolls over (Beethoven)
- VUK -9.35% UK woes.
- IPL -6.39% explodes lower after placement.
- WEB -7.43% stock comes out of escrow.
- EOS -5.97% close of SPP.
- FLT -5.97% profit-taking.
- CSR +10.06% results cheer.
- KGN +5.86% another good update.
- SPL +7.49% broker research.
- ALG +6.76% Shanghai Disney sells out. Same in QLD?
- PET +7.48% good to see.
- MYR -17.46% reality bites.
- WZR -8.11% profit-taking.
- SDV -9.09% Investor presentation.
- Speculative stock of the day: Harris Technology (HT8) +33.33% sales numbers for Pro-Hygiene product range. Revenue from the Pro-Hygiene range for the June 2020 quarter was estimated to be $400,000. Sales of Pro-Hygiene products for April 2020 was $1.05 million (unaudited) at a gross margin of 20%.
- Biggest Rises: CSR, KGN, RMD, JLG, GUD, MEZ and RMS.
- Biggest Falls: ELO, VUK, WEB, CTD, BUB, JIN and LOV.
- Kogan.com (KGN) +5.86% April update; gross profit up more than 150%. Gross sales up more than 100%. Adjusted EBITDA up more than 200%. Kogan.com active customers reached 1.9m, with 139,000 customers added.
- Premier Investments (PMV) -0.06% Store closures have significantly hit retail’s global sales, with total sales down 74% for the 6 weeks to 6 May vs pcp. Global retail store network sales down 99%, however, online sales have surged 99%. The company will reopen the majority of its stores in Australia from Friday, May 15. NZ stores to open on Thursday. Stores in the UK and Ireland will remain closed until June 1 and June 29 respectively. Unable to provide FY20 guidance.
- New Hope Corp. (NHC) -3.78% CEO and Managing Director Shane Stephan to retire August 31.
- Amcor (AMC) +1.24% adjusted net sales -1.8% to US$9.33bn (constant currency), adjusted EBITDA +4% to US$1.34bn (constant currency), adjusted net income +12.7% to US$719m (constant currency). Bemis integration processing well, continues to expect synergy benefits of ~$US80m (pre-tax) in FY20, and remains on track to achieve $US180m (pre-tax) in further synergies by the end of FY22. Outlook for adjusted EPS growth in constant currency terms increased to 11-12% vs previous guidance of between 7–10%. A quarterly dividend of 17.7c declared. CEO Ron Delia said, “Amcor remains relatively well-positioned and defensive, given our sales are almost entirely weighted to essential consumer staples end markets and we have broad geographic diversification and global scale.”
- Altium (ALU) -3.94% anticipates some headwinds on the back of restrictions extending in the US and Western Europe. Notes cash preservation priorities of small to medium-size businesses are likely to affect the timing of sales in May and June, typically ALU’s strongest months of the year.
- Life360 (360) -0.75% appoints Russell Burke as CFO. Former CFO Wendell Laidley announced plans to leave the business in February.
- AusNet Services (AST) +2.04% FY NPAT $290.7m vs consensus $267.7m. Revenue $1.98bn vs consensus $1.93bn. Dividend of 5.1c declared. FY21 dividends are expected to be in the range of 9.0 to 9.5 cps, franked at 40%. Net debt to regulated and contracted asset base is expected to remain below 70% to FY24. Continued growth is expected in its regulated asset base of around +2.5% per annum to FY24.
- CSR (CSR) +10.06% FY NPAT down 26% to $134.8m ex-items vs consensus $115.7m. Revenue down 5% to $2.21bn vs consensus $2.18bn. EBIT from continuing ops $216.8m vs consensus $182.5m. Given the uncertain economic environment, no final dividend will be paid. Share buyback paused. Since March 2019, CSR has purchased $69m of the $100m on-market share buy-back. Secured an additional $200m debt facility to strengthen liquidity position further. No earnings guidance to be provided due to uncertainty from COVID-19.
- Incitec Pivot (IPL) -6.39% completes $600m fully underwritten institutional placement at 200c.
- Josh Frydenberg gives budgetary update saying a second wave could cost the economy $4bn a week.
ANZ-Roy Morgan Consumer Confidence gained 0.9% last week, its sixth straight weekly gain. The index is up 38.2% since hitting record lows.
NAB Business Conditions:
- The NAB Business Survey showed confidence rose 19 points in April, the improvement left the confidence index at -46 index points in the month – two times below the 1990s recession level.
- Business conditions declined in April by 12 points to -34. The trading conditions index declined 14 points to -33, while profitability declined 7 points to -35. The employment index fell 15 points to -35.
- The Federal Reserve said a facility designed to purchase eligible corporate debt from investors will launch Tuesday, bringing a key part of the U.S. central bank’s emergency coronavirus lending program online.
- Japan is speeding up the approvals of vital drugs for the treatment of CV19. It usually takes a year, but Gilead and Fujifilm look to be cleared by the end of May.
- A malaria drug, hydroxychloroquine, touted by President Trump as a coronavirus treatment failed to help patients in New York City successfully fight off the pathogen, both when used alone or with an antibiotic, researchers and public health officials said.
- April CPI -0.9% M/M Forecast 0.5% – April food CPI up 14.8% Non- Food CPI up 0.4% – April CPI up 3.3% Forecast 3.7%.
- Pork prices, a key element in the country’s CPI basket and a source of inflation due to a previous swine fever outbreak, rose 96.9% on the year, moderating from March’s 116.4% gain.
- China has suspended meat imports from four Australian abattoirs. The suspension will start on May 12, according to a statement on a customs website. The four plants make up about 35% of Australian beef exports to China. ABARE said in its March quarter update that China became Australia’s most valuable beef market in the first quarter of 2019-2020, accounting for 25% of the total value. ABARE had forecast exports to reach $9.8bn (1.2m tonnes shipped weight) in 2019-2020, before falling to $7.6bn in 2020-2021 (on 0.9m tonnes). Export volumes were forecast to recover gradually to 1.1m tonnes in 2024-2025.
- Toyota looking at an 80% yearly profit fall.
EUROPEAN AND US NEWS
- European futures pointing to a slightly weaker start on US futures weakness.
- Boris is trying hard to clarify what the plan is for the UK. Sunday’s plan was a disaster. No one had a clue what was going on. Now Boris is trying to put some meat on the bones. Stay Alert. Britain needs more ‘lerts’.
- Elon Musk is defying authorities and reopening his plant in California and happy to go to jail.
- Saudi cuts another 1mbpd of production. Aramco results to come.
- Fed launching the first wave of corporate buybacks. Wave 1 of three this week.
- Trump refuses to renegotiate his trade deal. The deal is the deal that they signed.
Two men from Texas were sitting at a bar when a young lady nearby began to choke on a hamburger. She gasped and gagged.
One Texan turned to the other and said “That little gal is havin’ a bad time. I’m gonna go over there and help.”
He ran over to the young lady, held both sides of her head in his big Texan hands and asked “Kin ya swaller?”
Gasping, she shook her head “No.”
He asked “Can ya breathe?”
Still gasping she again shook her head “No.”
With that he yanked up her skirt, pulled down her underwear and licked her bottom The young woman was so shocked that she coughed up the bit of hamburger that was stuck and began to breathe on her own.
The Texan sat back down with his friend and said “Ya know, it’s amazin’ — that hind-lick maneuver always works!”