ASX 200 closes up 13.5 points (+0.24%) to 5573, with the bulls fighting back strongly from early weakness. Dow Futures are up 80 points. Tech stocks led the way, with CPU leading the charge up 4.4% after maintaining their FY20 guidance in a conference call. APT also had a good day, up 2.1%, with XRO up 1.0%. Industrials were the other top sector, led by BXB up 2.6%, and TCL and ALX up around 2% each. Consumer discretionary was solid, with ALL up 2.0% ahead of their results tomorrow and CWN up 1.6%. It was slim pickings elsewhere. The big four were all up modestly, with CBA the best up 0.6%. Recently strong miners took a breather; BHP down 0.9%, RIO down 0.4%, although FMG bucked the trend up 0.2%. It was a strange day for gold plays after sector upgrades from some of the brokers; NST jumped more than 1.7% but NCM was down 0.2% and SAR fell 0.9%. The energy sector was equally mixed; ORG tanked 2.8%, but STO added 0.4% and OSH rallied 2.2%. AAC rose 3.3% after it swung to an operational profit of $15m. EML was the big winner on the day, jumping 12.8% on a strong trading update. In economic news, we had retail sales out which showed the extent of the downturn. The 10-year yield dropped to 0.94% and the AUD steady at 65.40c. Asian markets were mixed with Japan firmed by 0.58% and China down 0.43%.
- ASX 200 up 13.5 to 5573. Good rally off early lows.
- High 5587 Low 5507 Average volume.
- Tech names lift. EML the standout.
- Utilities and energy names lag.
- Retail turnover down 18% in April.
- Big Bank Basket up to $106.50
- All Tech up 2.15%
- Dow Futures up 80.
- 10-year bond yields eased to 0.94%
- AUD rallies to 65.40c.
- Aussie gold steady at $2670.
- Bitcoin US$9730
- In Asian markets, Japan firmed by 0.58% and China down 0.43%.
- Z1P +8.41% rallies on EML update.
- URW -4.16% gives back some gains.
- TPM +3.98% merger update, to pay a special dividend.
- ADI +5.00% plans share buyback.
- WOR -2.20% enters global framework with BP.
- SCG +0.89% prices USD debt instrument.
- GMA +4.95% loses NAB contract.
- ALQ +6.06% broker upgrade.
- SYR +16.98% short squeeze on AGM.
- AAC +3.26% swings to operating profit.
- NCM -0.25% resolves Cadia water shortage threats.
- SYD +1.07% April traffic down 97%.
- FBU -2.84% cuts staff, positions for a downturn.
- EML +12.77% well-received trading update.
- CPU +4.36% positive investor day.
- ABP +2.06% broker upgrade.
- ALK +8.55% progress on demerger.
- BAP +4.40% SSP completed.
- WGN -5.88% litigation update.
- M7T +10.16% five year contract win.
- ALL +2.01% rallies ahead of results tomorrow.
- NAB +0.71% announces 3Q trading result, 14th August.
- CLV +12.95% good update on hoarding sales of formula.
- Speculative Stock of the Day: Rarex(REE) +70.83% after it encountered multiple mineralised zones including shallow 28m interval from 55m. More results to come from Trundle Lachlan fold belt.
- Biggest Rises: EML, PLS, CGC, NEA, PNV, PAR and RED.
- Biggest Falls: AST, URW, MMS, ALD, BGA, MCY and SM1.
- APN Industria REIT (ADI) +5.00% collected 95% of billings for April, and a similar outcome is expected for May. Notes around 10-15% of tenants are eligible for relief under the Code of Conduct. The board intends on paying a distribution for the quarter and has announced a buyback of up to 5% of its issued capital.
- EML Payments (EML) +12.77% in the nine months to March 31, Gross Debit Volume (GDV) up 55% to $9.83bn vs pcp. Gross Profit margin 75.9% vs 73.7% in the PCP. Revenue up 20% to $87.1m. EBITDA up 24% to $27.0m. Unaudited Group EBITDA in March of $1.9m was down 37% on the PCP. Expects to see a gradual opening of malls in various countries during May and June onwards which should represent an improvement to the trading conditions experienced in April.
- Fletcher Building (FBU) -2.84% to cut ~10% of its workforce. Reported an operating EBIT loss for April (unaudited and prior to significant items) of NZ$55m. The group’s NZ businesses are trading at around 80% of forecasted revenues in May. Australia continues to trade at around 90% of pre-COVID-19 expectations. The group’s core manufacturing and distribution businesses are expected to record positive EBIT before significant items across May and June. Expects a sharp downturn in FY21 and potentially beyond. Total expenditure for FY20 is now anticipated to be NZ$240m vs prior NZ$300m.
- Australian Agricultural Co. (AAC) +3.26% FY NPAT $31.3m vs year-ago ($148.4m). Revenue $334.1m vs year-ago $364.1m. Underlying operating profit $15.2m vs year-ago $23.7m. Notes the impact from COVID-19 cannot be estimated at this stage. Four Australian beef plants were recently suspended by China as a result of the trade dispute. Sales to China represented around 15% of total meat sales in FY 2020.
- Sydney Airport (SYD) +1.07% April traffic down 97.5% vs year ago. Domestic down 97.9% to 49K passengers. International down 96.9% to 43K passengers. Year to date, total passenger traffic is down 38% to 9.1m.
- Worley (WOR) -2.20% BP International and Worley have entered into two global framework agreements; one for conceptual engineering and the other for early engineering and front-end engineering design services. Both agreements are for a term of two years to provide services to BP’s global offshore developments.
- Newcrest Mining (NCM) -0.25% now believes that Cadia has secured adequate levels of water to ensure that production is not constrained by water for at least the next two years and possibly beyond.
- Genworth Mortgage (GMA) +4.95% has confirmed that National Bank will not renew its Lenders Mortgage Insurance (LMI) supply agreement once the current contract expires in Nov 2020. The contract represented approximately 12% of GWP in FY19.
- Computershare (CPU) +4.36% investor briefing takeaways; key businesses are operating resiliently and there are positive signs in CPU’s cyclical businesses. Momentum is also building in its countercyclical businesses such as bankruptcy and capital raisings. Margin income is woeful, albeit unchanged, and is depressing earnings. Not new information. Balance sheet is well placed to fund growth strategies.
- Australian retail turnover fell 17.9% in April 2020, seasonally adjusted, according to preliminary retail trade figures released today by the Australian Bureau of Statistics (ABS).
- The food retailing industry, which saw a strong rise in March due to unprecedented demand, fell 17.1% from March 2020. Additional analysis indicates that the majority of products which rose substantially in March recorded falls in April 2020, however, they remained at higher levels than April 2019.
- Analysis of supermarket and grocery store scanner data shows that monthly retail turnover fell in original terms for Non-Perishable Goods, Perishable Goods and All Other Products by 23.7%, 15.3% and 24.5% respectively in April 2020 compared to March 2020. These falls follow significant unprecedented demand in March 2020 where Non-Perishable Goods rose 39.0%, Perishable Goods rose 21.6% and All Other Products rose 30.5%.
- The April month saw further strong falls in Cafes, restaurants and takeaway food services and clothing, footwear and personal accessories retailing. Businesses reported that regulations regarding social distancing measures limited their ability to trade as normal for the entire month. Turnover in Clothing, footwear and personal accessories, and Cafes, restaurants and takeaways in April 2020 is around half the level of April 2019.
- Brazil reported another daily record for Covid-19 cases and deaths. Infections in India rose at the fastest pace in Asia to top 100,000.
- Singapore Trade & Industry Minister Chan Chun Sing said a faster economic recovery from the pandemic would depend on the availability of affordable, rapid test kits and the rollout of a vaccine.
- Saudi Arabia is preparing to use electronic wristbands to monitor people quarantined inside their homes.
- Germany’s new virus cases rose above 1,000 for the first time in 11 days, while the infection rate dropped further below the key threshold of 1.0.
- The People’s Bank of China (PBoC) held its benchmark interest rates steady on May 20th as widely expected. Yuan weakens slightly.
- Chinese unemployment is always an opaque number but BNP has done some sums. Accounting for migrant workers who couldn’t travel to cities, job losses may have exceeded 50m and the real unemployment rate could have hit 12% in March, according to BNP Paribas. As many as 130m people were either out of work or furloughed in the first quarter.
- European markets set to open flat.
- Mnuchin says US is ready to take losses on $500m bailouts.
- No sports betting. Bet on stocks instead. Three of the top online US brokers have seen 800,000 new accounts in March and April.
- Facebook is set to take on Amazon with a new online shopping venture.
A priest and a shepherd from Australia participate in a TV game.
After answering all the questions, there is a tie. So both are given one final assignment. It is to write a poem in three minutes, using the word “Timbuktu”. It is city in Africa. The priest returns with the fruit of his inspiration: “I was a father all my life, I had no children, had no wife, I read the bible through and through on my way to Timbuktu … ”
The poem makes a great impression, and the priest smells a sweet victory. But then comes the shepherd, with his winning masterpiece: “When Tim and I to Brisbane went We met three women cheap to rent. They were three and we were two, So I booked one and Tim Booked Two … ”