ASX 200 rallies 64 to 5820 as the darkness on the edge of town continues in the US. Dow futures slightly negative down 15 points. After a shaky start the market regrouped and pushed back in a healthy rally, closing on its highs in a very posituve sign. Chinese PMI numbers helped, so too did talk of stimulus for tradies from ScoMo andf HK rallying hard as US measures fall short. Iron ore though the real stand out still as supply from Brazil is interrupted by CV19. BHP rose 3.1% and FMG up 6.4% at an all- time high. Minors also joined in with MGX up 8.1% and CIA up 5.00%. Gold miners were slightly better on the higher bullion price with NST up 2.5% and NCM up 2.7% despite the stronger dollar. Energy stocks were also in demand ahead of a virtual OPEC meeting perhaps as early as this Thursday. WPL up 1.1% and STO up 2.6% leading the charge. Elswhere, CSL rebounded from recent losses after a presentation rising 3.1%. Banks were better at the close despite some early nerves, NAB up 0.8% and WBC up 0.8% and the Big Bank Basket rose to $117.26. Industrials had a positive tone with small gains in bond proxies and REITs helping offset some weakness in TLS down 0.6% and WOW down 0.2%. Tech stocks lagged, the Index up a mere 0.6% with XRO up 1.6%. In corporate news, TYR had a good day up 7.9% after its weekly update, BLD too rallied up 6.7% on stimulus hopes and in economic news, House price falls continue together with manufacturing edging higher. Chinese PMI numbers helped sentiment. The 10-year yield unchanged at 0.87%, AUD firms on China news up to 67.26c. Asian markets higher as Japan up 0.6% and China up 2.7% on PMIs. Hong Kong the big winner as Trump moves seen as slight, up 3.6%.

Today’s Highlights

• ASX 200 up 64 to 5820. Good volumes.
• High 5820 Low 5705.
• Big Bank Basket $117.26 muddles through.
• Dow Futures down 15.
• 10-year bond yields unchanged at 0.87%
• AUD rallies to 67.26c on strong iron ore.
• Aussie gold steady at $2589 as AUD rises.
• Bitcoin rallies slightly to US$9548
• Asian markets higher as Japan up 0.6% and China up 2.7% on PMIs. Hong Kong the big winner as Trump moves seen as slight, up 3.6%.

 

STOCKS

• ABC +8.82% catch up on stimulus hopes.
• BGL +8.24% bullion price rise.
• BLD +6.75% tradie stimulus package?
• MGX +8.09% iron ore pricing.
• TYR +7.92% positive business update.
• ASB +9.28% broker upgrades.
• FMG +6.40% one-way train.
• FNP -5.91% broker downgrades.
• MSB -1.75% CV19 treatment helps outcomes.
• DXS +2.00% cuts FY guidance.
• PME +1.70% signs new healthcare contract.
• WSP +7.63% upgrades guidance.
• VCX – Capital raise as valuations fall 11%-13%.
• BPT +3.41% appoints new COO.
• CRN -1.27% profit taking so quickly.
• KLL -55.50% capital raise at deep discount.
• ALG -6.67% QLD still closed. US riots aren’t helpful.
• ZNO +21.57% buyers back.
• BRN +8.45% convertible note issue.
• Speculative Stock of the Day: RTG Mining (RTG) +54.17% mentioned here last week. The Mabilo project has been given the green light for gold mine in the Philippines.
• Biggest Rises: OPT, ASB, ABC, PAR, BGL, MGX, and TYR
• Biggest Falls: FNP, PTM, PSI, OBL, CCX, and NEA.

TODAY

• The Star Entertainment Group (SGR) +3.05% To re-open its private gaming rooms along with its hotel, retailing & dining venues as part of easing restrictions. Operating costs will lift from $10m in April to $20m in June. SGR and NSW Government have also reached a new 20-year agreement on gaming taxes. The new arrangements will commence in FY22 comprising flat rates of tax as a percentage of revenue. The International VIP Rebate business and the domestic rebate business gaming tax remains unchanged at 10% of revenue.
• Pro Medicus (PME) +1.70% Signs $22m 5-year contract with North-western Memorial HealthCare. The contract will see Visage 7 technology implemented at NMHC in Q1 FY21. Notes operations in Australia are now at near-normal volumes, with parts of the USA following closely behind. The impact has not been material. Pipeline remains strong.
• Zip Co. (Z1P) – Is reportedly close to acquiring full control of US-based QuadPay, and is thought to be considering a potential equity raising to help fund the controlling stake. Z1P already holds a 15% interest.
• Monadelphous Group (MND) +0.59% Secures a number of construction and maintenance contracts in the resources and energy sectors with a combined value of $150m.
• Vicinity Centres (VCX) – Has launched a $1.4bn capital raising through an institutional placement and $200m a share purchase plan. New shares will be issued at 148c, an 8.1% discount to the last closing price of 161c. Preliminary valuations suggest a hit to aggregate asset values at June 30 between 11-13%. Will not pay a 1H distribution.
• IRESS (IRE) – Announces $170m raising via placement and $20m SPP at 1042c. The equity raising will help fund the $107m takeover of OneView and help strengthen its balance sheet. The acquisition of OneVue is expected to be EPS dilutive in the near term. Strategic opportunities from the acquisition are expected to deliver significant value over time.

ECONOMIC NEWS

• The Ai Group Australian Performance of Manufacturing Index edged up to 41.6 in May from 35.8 in April. The manufacturing industry remained in deep contraction in May, as coronavirus restrictions weighed on demand.
• Capital city property values drop 0.5% in May, CoreLogic says. The biggest falls were Melbourne, where prices dropped 0.9%, and Perth, which was down 0.6%.

COVD-19 NEWS

• Wuhan authorities said they found no cases of asymptomatic infections among 60,000 people tested on Sunday.
• The UK’s Chancellor of the Exchequer, Rishi Sunak, is working on proposals to invest in training programs, infrastructure and help for technology firms.

BONDS

ASIAN NEWS

• Hong Kong markets surge as Trump fails to follow through. Macau gaming revenue falls 93% in May.
• Purchasing managers indices for South Korea, Japan, and Taiwan fell, according to data released by IHS Markit on Monday.
• The Caixin gauge of manufacturing activity, which is skewed towards small and medium-sized business, rose to 50.7 in May from 49.4 in April.

• Non-manufacturing rose to 53.6 from 53.2. New export orders in the manufacturing sector edged up to 35.3 from 33.5, remaining deep in contraction territory.
• Goldman Sachs sees the yuan falling to its lowest since 2008 over the next three months amid uncertainty over U.S. policy toward China that has put pressure on the currency. Goldman sees the yuan falling to 7.25 per dollar on a three-month horizon before recovering toward 7.15 per dollar over six months and 7 per dollar in one-year. That’s up from targets of 7.15 per dollar, 7.05 and 6.90 previously.

EUROPEAN NEWS

• European markets set for a positive opening despite riots in US. 1.3% higher expected for FTSE. Trade deal still on.
• The EU Budget chief is backing a call for a business levy to fund the regions recovery.

And finally…………

You can’t lose a homing pigeon. If your homing pigeon doesn’t come back, then what you’ve lost is a pigeon.

“If you arrive fashionably late in Crocs, you’re just late.”

“How to make a million dollars: First, get a million dollars.”

“People who like trance music are very persistent. They don’t techno for an answer.”

“Feminism is not a fad. It’s not like Angry Birds. Although it does involve a lot of Angry Birds. Bad example.

Clarence

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