The ASX rallied hard today up 146 points (2.4%) as it played catch up and closed at 6145. Dow futures were slightly positive up points. Banks were the standouts today as the sector played some catch-up and breathed a sigh of relief as things open up gradually. CBA rose 5.0% and WBC up 6.4% with the Big Bank Basket up to $133.74. Hard to believe it was $100 only a few weeks ago. Other financials doing well with MQG up 5.7% though AEF finally succumbed to Newton’s laws of gravity and fell 10.3%. Insurers doing well too, QBE up 5.5% and SUN up 2.8%. CSL was a big loser today as it announced an acquisition and fails to capture the upswing trading near pre-rally lows. Other healthcare stocks were mixed with RHC down 1.1% and FPH up 2.0%. Miners were better as iron ore soared with BHP up 3.6% and FMG up 2.3%, MGX rallied 9.9% too as the high-cost producers come into play. Gold miners under serious pressure GOR dropped 9.3% and EVN down 6.4%.  REITs were firm following GPT write-downs and the stock rose 7.5% with DXS up 3.6% and SCG up 8.8% on reopening hopes. Energy stocks better led by WPL and STO up 5.6% and 7.1% respectively. Industrials in the green with TCL up 1.2% to near pre virus levels and SYD up 8.8% despite clear blue skies. BNPL stocks doing well Z1P up 15.8% and EML up 4.3%. The All Tech Index fell 0.6% as XRO dropped 6.4%.  In corporate news, DEG rallied hard by 16.2% on more promising drill results, MGV reported Bonanza grades up 29.2% and WES updated the market with news that Bunnings and Officeworks had been doing well, up 0.1%. The 10 -year yield slipped to 1.04% with the AUD around 70c still. Asian markets mixed with Japan down 0.6% and China up 0.6% and HK up 1.7%.

Today’s Highlights

• ASX 200 up 146 to 6145. No real intraday volatility though.
• High 6199 Low 6038.
• Big Bank Basket $133.74 up again.
• Miners do well on iron ore rise.
• Dow Futures down 18 points.
• Cathay Pacific to raise US$5bn.
• 10-year bond yields slips to 1.04%
• AUD steady around 69.88c.
• Aussie gold slips to $2426.
• Bitcoin steady at US$9680
• Asian markets firm, Japan up 0.72%, and China up 0.48%. Hong Kong up 1.29%.

STOCKS

• NAB +5.08% raises $205m in 15-year notes issue. MLC going ahead.
• TGF -7.20% asset written down.
• GEM +8.21% clarifies road back after government support finishes.
• IFN – UAC increases stake.NVX +% investor webinar.
• BRN +36.36% JV agreement.
• GOR -9.35% smashed.
• AEF -10.28% finally sellers appear.
• NXT -4.54% technical selling.
• BVS +3.93% stake hits the market.
• Z1P +15.78% resumes the uptrend.
• CRN +16.28% change of director’s interest.
• KMD +12.39% retail demand as stores reopen. NZ open for business.
• MGV +29.17% Bonanza grades.
• OSH +4.19% PNGX issues solved.
• OPT – awaiting trial results.
• CKF -0.24%% new CEO.
• SWM +25.93% run continues.
• WES +0.14% trading update.
• WOR +14.62% Credit Suisse upgrades.
• Speculative Stock of the Day: Novonix (NVX) +76.64% the company has announced its ability to manufacture ‘single crystal’ NMC cathodes using its Dry Particle Technique. Investor webinar to come Friday. Rally may continue. Single crystal cathode materials have recently become an aspiration for the lithium-ion battery industry, with demonstrated outperformance over traditional polycrystalline cathode particles.
• Biggest Rises: AIZ, VUK, CRN, DEG, Z1P, CCP and WOR.
• Biggest Falls: AEF, GOR, DTL, GWA, SAR, EVN, XRO and NWL.

TODAY

• Wesfarmers (WES) +0.14% Total sales growth by division from H2 to date: Bunnings up 19.2%, Kmart up 4.1%, Target down 1.8%, Catch (GTV) up 68.7%, Officeworks up 27.8%. In the calendar year to date, the group’s retail businesses delivered total online sales growth of 89%. Financial year to date total online sales across the group increased by 60% to $1.9bn including Catch.
• NAB (NAB) +5.08% Following the sale of CBA’s Colonial to KKR back in May, there is increased speculation NAB will offload MLC. PE names like Apollo Global Management, Blackstone, TPG Capital, The Carlyle Group, and Hellman & Friedman are said to be interested in taking a closer look.
• GrainCorp (GNC) -2.92% CFO Alistar Bell to leave the company to pursue new opportunities, effective July. Ian Morrison to be appointed interim CFO.
• G8 Education (GEM) +8.21% Has responded to the Early Learning Sector funding update. Expects to be in no worse a position relative to the prior support measures. Confirms that total cost savings are in line with forecasts. The group’s booked occupancy is currently ~65%, however, physical attendance is ~52% as some parents choose to keep their children at home despite having a booking at a centre. The gap between booked occupancy and attendance levels is expected to continue to narrow.
• The GPT Group (GPT) +7.53% Revaluations have resulted in a reduction in the value of ($476.7m), or approximately 8.8% compared to the December book value. Under the amended payout policy, GPT will target to distribute 95-105% of free cash flow. The previous policy was to distribute 95 -105% of adjusted funds from operations (AFFO). The timing of the declaration of its distributions to coincide with the release of the Group’s financial results in February and August each year.

ECONOMIC NEWS

• The latest NAB Business survey showed that business conditions, while still negative, rose 10 points in May after having fallen to GFC lows the previous month. Confidence jumped 25 points, although it still sits in negative territory. Trading conditions were up 13 points, profitability up 16 points.

• Treasury has become more optimistic about its unemployment forecasts revising it down from 10% to 8%. Treasury Secretary Steven Kennedy said the economic impact and level of unemployment will not be anywhere near as bad as the department had previously forecast.

COVD-19 NEWS

• Abu Dhabi has extended its movement ban by a week.
• South Africa has now tested 12m people. 940K tests completed but many tests are still awaiting results for up to 14 days.
• Indonesia will allow airlines to carry more passengers in a rule that further eases restrictions in the aviation industry.
• South Korea reported 38 more coronavirus cases in 24 hours, bringing the total tally to 11,852.
• Coronavirus cases in the U.S. increased by 1.2% as compared to the same time Sunday, to 1.95m.

BONDS

ASIAN NEWS

• Cathay Pacific, Swire Pacific, and Air China have all been suspended in Hong Kong trade today pending an announcement. Cathay amid a US$5bn capital raising
• Honda has suspended cap shipments after a cyberattack.
• North Korea is cutting communications with South Korea.
• Hong Kong protests started one year ago today. Not much achieved.

EUROPEAN NEWS

• Euro markets expected to open flat to slightly down.
• BP cutting 2020 spending plans and pay rises go plus 15% of jobs as low oil prices bite.

And finally………….

Here is a podcast I did with my good buddy Adam Dawes talking FMG and Z1P…

https://www.buzzsprout.com/967801/4052753-on-the-couch-with-henry-jennings-and-stockbroker-adam-dawes

 

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