The ASX closed up 56 points to 5460 in quiet trade. Dow Futures up 215 points. The week started well with commodity stocks to the fore. After an initial surge, the market went sideways on thinish volume as we await further developments. Gold miners quick out of the blocks this morning led by NST up 4.0% and NCM up 6.7%. Iron ore miners were in demand with FMG hitting all-time highs up 5.8% and BHP up 4.5% with RIO doing well too up 5.8%. Energy stocks rounded out the commodity focus as WPL rallied 2.0% and STO rose 5.9%. Banks though were once again a serious drag on sentiment and the index with the Big Bank Basket down to $104.11. CBA dropped 1.2% and NAB down 1.9% with no end in sight. Consumer stocks fining support as shops and cafes take tentative steps to reopening. WES up 0.7%, ALL up 2.6% ahead of numbers Thursday, and TCL up 0.4% on traffic reappearing on roads. REITs were back in favour with GMG up 0.6% and MGR up 1.9%. Tech stocks better with WTC up 5.7% and XRO bouncing back 2.4% on a broker note. The All Tech Index up 1.9%. In corporate news, ELD had a great day post its results up 9.9%, SLC too updated the market and put on 17.9%. VRL got an approach by BGH Private Equity (busy boys) and rose 20.7%, ATU rallied 31.0% on Canadian legislative changes. In economic news, the ABS updated us on the changes from Cv19, all of which all obvious, the 10-year yield steady at 0.91%, and the AUD steady around 64.39c. In Asian markets, Japan rose 0.53% and China up 0.65%.
- ASX 200 up 56 to 5460. Lower volume. No volatility.
- High 5486 Low 5424.
- All Tech up 1.9%.
- Dow futures up 215
- 10-year bond yields steady at 0.91%
- AUD higher at 64.39c.
- Aussie gold rallies to $2732
- Bitcoin rallies to US$9872
- In Asian markets, Japan rose 0.53% and China up 0.65%
- ATU +30.95% changes to Canadian legislation.
- SLC +17.95% trading update.
- EOS +11.54% bulls are back.
- MSB +14.25% running ahead of Conference presentation.
- ASB -3.96% becoming a substantial shareholder.
- NEA -1.89% missing out.
- AIA -2.63% traffic numbers.
- FLC +5.66% strategic sale of Aspiral.
- AEI +16.67% good volume too.
- RMS +13.92% AQG +12.17% SAR +11.29% on gold price.
- ZEL -2.53% change in substantial holding.
- PNI +5.47% quits action against Carlyle.
- Speculative stock of the day: Wide Open Agriculture (WOA) +117.86% signs licence to create a novel plant-based protein from lupin for human consumption with Curtin University in WA. WA grows around 60% of the global lupins which the new protein will be derived from.
- Biggest Rises: RED, MSB, RMS, CIA, AQG, EOS and SAR.
- Biggest Falls: GMA, ERA, ASB, ARF, URW, FCL and TNE.
- Village Roadshow (VRL) +20.68% Theme parks and cinemas remain closed. VRL’s other businesses, Roadshow Distribution and Marketing Solutions, continue to operate at a reduced capacity. Revenues from these businesses are not material to the group under normal operating conditions. Expects capex in FY21 to be predominately maintenance based in both the Village circuit and Event managed sites. While its key businesses remain closed, VRL expects its underlying operating cash costs net of JobKeeper subsidy to be between $10-15m per month. Received revised takeover proposal from BGH Capital of up to 240c per share.
- Elders (ELD) +9.88% H1 NPAT $52.9m vs consensus $46.1m. Revenue $925.2m vs consensus $921.9m. Adjusted EBITDA $52.5m vs consensus $53.4m. Interim dividend 9c/share. Following rainfall events, there is now a positive outlook for the winter crop. Notes livestock supply chains continue to operate without major disruption from COVID-19, with digital solutions in place to facilitate transactions if in-person methods become disputed. Elders Fine Foods performance is anticipated to recover as China begins to re-open post-COVID-19 lockdown.
- Superloop (SLC) +17.95% Reports Q3 connectivity sales of $5.6m. Notes it is on track to achieve the midpoint of its FY20 EBITDA guidance range. The business, not surprisingly, has experienced a significant demand increase in its Internet / IP network over the last few months. Largely driven by the changing traffic profile and volume due to work from home patterns and an increase in video conferencing/streaming services.
- AusNet Services (AST) –0.26% There is speculation AST could be looking to raise between $300-700m. JP Morgan was reportedly working on ‘at least one’ equity raising over the weekend with AST a potential candidate.
- Charter Hall Long WALE REIT (CLW) +0.25% Notes media speculation around an imminent equity raise is incorrect.
- Nearly half (46%) of working Australians said they were working from home, with women more likely to do so than men (56% compared with 38%);
- The majority of Australians were continuing to keep their distance from people outside the household (94%) and avoid public spaces (85%) to protect their health;
- The most commonly experienced personal stressor due to COVID-19 was loneliness (22%), with women more likely to report feeling lonely than men (28% compared with 16%); and
- One in six Australians (17%) used a Telehealth service in the previous four weeks, with persons with a mental health condition more likely to do so than those without a mental health condition (33%* compared with 15%).
- Thailand’s economy contracted in the first quarter for the first time since 2014.
- China reported seven new coronavirus infections, with three of them locally transmitted cases in Jilin province and Shanghai.
- Apple Inc. said it’s reopening more than 25 stores across the U.S. and 12 stores in Canada this week, adding to nearly 100 global locations that have reopened.
- Goldman Sachs expects India will experience its deepest recession ever as GDP will contract by an annualized 45% in the second quarter from the prior three months, compared with Goldman’s previous forecast of a 20% slump.
- Japan’s economy contracted at an annualised rate of 3.4% in January-March, government data showed.
- China’s house-price growth accelerated in April. New-home prices in 70 major cities, excluding state-subsidized housing, gained 0.42% in April. Prices in the secondary market, which is free from government intervention, rose 0.22% last month.
EUROPEAN AND US NEWS
- European futures markets pointing to a firm start.
- US and China continue to fight over chips. China accuses US of guarding tech hegemony. Targets US over Huawei rules that could affect the supply chain.
- Janus Henderson predicts that under its worst-case scenario, US$500bn in dividends could be cut globally.
Two farmers are watching the sunset on their tractor have a chat.
Farmer 1: I keep hearing on the radio, TV, read in the papers about the stock market but I still have no idea it is. Do you know?
Farmer 2 : How should I explain this to you… Let’s say you buy some eggs for your farm, these eggs hatch and now you have chicks, these chicks grow up to be hens which lay more eggs out of which you get more chicks that grow up to be hens and so on and so forth and your farm is full of them. One day a big black flood ravages your land and takes all of them downstream.
Then you sit and think to yourself: ducks… I should have gotten ducks. That’s what the stock market is like