The ASX 200 rose 3 points to 6148 shrugging off early weakness as Dow Futures rallied 150 ahead of the Fed. Banks were hit though after a stellar run and money rotated into CSL and WES which rose 2.6% and 4.9% respectively. CSL alone added around 10 points to the index with WES around 7 points. Banks though fell led by CBA down 0.8% and NAB down 1.5% with the Big Bank Basket down to $132.22 slipping from recent highs. REITs too under pressure with GMG down 1.2% and SCG falling 4.4%. Tech though back in favour led by APT up 7.5% hitting all-time highs and XRO up 3.9%. The All Tech Index rose 2.8%, APT is now the largest stock in the index. Z1P also rose 3.4% in sympathy. Gold stocks had a resurrection today NST up 1.6% and EVN up 1.1% with GOR bouncing off crucial 140c to close up 6.0%. Miners were quiet with BHP down 0.4% and FMG adding another 0.8%. In corporate news, HVN updated the market and rewarded loyal Gerry fans with a 6c special dividend, the stock rose 7.3%. IDX rose 14.6% after announcing an acquisition and OPT fell 9.2% after positive Phase 2 trial results. Plenty of solid(ish) economic news to keep analysts’ busy amidst signs of the recovery taking hold. The 10-year yield was flat at 1.02% and the AUD quiet as a mouse. Asian markets too went nowhere as everyone waits on the Fed.

Today’s Highlights

• ASX 200 up 3 to 6148. Good rally off lows. Closing fade.
• High 6182 Low 6090.
• Big Bank Basket $132.22 sees profit-taking.
• Plenty of economic data.
• Dow Futures up 150. European futures point to flat opening.
• 10-year bond yields slip to 1.02%
• AUD steady around 69.88c.
• Aussie gold rallies to $2457
• Bitcoin steady at US$9764
• Asian markets firm, Japan up 0.2%, and China down 0.3%. Hong Kong up 0.2%.

STOCKS

• BGL +9.38% strong drill results.
• PBH +7.35% momentum building again.
• APT +7.53% hits an all-time high. The largest company on XTX.
• HVN +7.32% special dividend cheers.
• SDF +5.56% slow and steady grind higher.
• GOR +6.05% good bounce.
• OPT -9.23% trial results.
• FLT -3.82% Bell Potter says too much optimism built in.
• GEM -5.80% AGM update
• WES +4.91% upgrades.
• KMD -4.33% change in substantial holding.
• PPK -9.65% market update
• NAB -1.51% send staff back to banking school.
• MGV +33.87% good results continue WGX substantial holder.
• BET +13.95% US fixed odds deal.
• PNR +7.69% drill results cheering.
• NVX +7.44% the ride continues as trading starts in North America. Webinar Friday.
• Speculative Stock of the Day: Immuron (IMC) +261.45% The US Defense department requests a meeting FDA for guidance on Phase 2 Trials to prevent infectious diarrhea. Big volume too. Phase 2 in 2021.
• Biggest Rises: IDX, BGL, SAR, WAF, MP1, APT, PBH and HVN
• Biggest Falls: OPT, AIZ, NIC, GEM, COE, EQT, VUK and VCX.

TODAY

• Harvey Norman (HVN) +7.32% Total sales at its Australian stores were up 17.5% in 2H20 to May 31. Year to date sales growth of 7.4%. International sales were mixed, Ireland up 18.8%, Malaysia down 4.2% and Slovenia & Croatia down 10.9% over the same period. To pay 6c/share fully franked special dividend. Record date June 32, payable June 29.
• Kogan.com (KGN) – Announce $100m placement and $15m SPP at 1145c/share. Funds will be used to provide financial flexibility to act quickly on future value accretive opportunities that broaden the Company’s offering, expand its customer base or enhance its operating model.
• Worley (WOR) -5.07% ECR acquisition on target for financial returns, well on track to deliver $175m synergy target. Operational savings of $275m expected in addition to ECR cost synergies. Backlog remains relatively stable, down 2% to $18.3bn from the end of December to April 30.
• Senex Energy (SXY) -3.64% Completes $400m Surat Basin natural gas development project.
• Prospa (PGL) +3.97% March quarter revenue of $37.4m and total loan originations of $122.8m were in line with management expectations. Performance for the months of April and May were materially impacted by COVID-19, although demand is starting to improve in both Australia and NZ. Provided 5,501 customers with relief packages, including short-term payment deferrals and reduced repayments. 18.6% of customers on full deferrals have returned to full repayments since May 15. Operating expenses are expected to be down ~32% q/q. Unrestricted cash has increased to $61.9m at May 31.
• Johns Lyng Group (JLG) – 3.04% Upgrades FY20 revenue and EBITDA guidance. Expects FY20 EBITDA to be $39m vs prior $35.6m and consensus $38.4m. FY20 Revenue now forecast to be $470m vs prior $420m and consensus $460.9m.
• Healius (HLS) –0.76% BGH Capital is thought to be interested in HLS’s medical centre division. The private equity firm is also believed to be looking at NAB’s MLC wealth business and Village Roadshow (VRL).
• Smartgroup (SIQ) –5.00% Anticipates 1H20 NPATA of $32m. Last year, the company reported NPATA of $40.5m for the first half. SIQ said it was encouraged by an improvement in recent trading conditions. However, overall volumes remain below historical levels.

ECONOMIC NEWS

• The Westpac-Melbourne Institute Index of Consumer Sentiment rebounded 16.4% to 88.1 in May from the extremely weak 75.6 read in April. Consumer confidence is now back around pre-COVID levels. Click here for the full release.

• ANZ-Roy Morgan weekly consumer confidence suffered its first weekly decline in nine weeks. Down 1.3% to 97 points. The weakness was mainly due to ‘Time to buy a major household item’ component, which declined by 5.7%. ANZ economist David Plank had this to say, “last week’s fall in confidence can be seen as more of a consolidating move than weakness.”

• New home loans contracted in April at their fastest rate in almost five years as both owner-occupiers and investor borrowers pulled back. New loans to owner-occupiers fell 5%.
• Lending to first home buyers slipped 1.9% from March. Lending commitments to investor borrowers declined 4.2%.
• The value of new loan commitments for fixed term personal finance fell sharply in April, down 24.8%.
• In April 2020, new loan commitments (seasonally adjusted): fell 4.8% for housing, 24.8% for personal fixed term loans and fell 39.2% for business construction (typically volatile series).
• National Australia Bank has raised its average price for 2020 to $US90 a tonne from $U84 a tonne, while its forecast for 2021 was lifted to $US83 a tonne from $US74 tonne.

• Credit and debit card data from the Commonwealth Bank shows spending is now 5% higher than same period last year.

COVD-19 NEWS

• Royal Dutch Shell expects buying and selling of the fastest-growing fuel to get back to levels seen before the pandemic. hell said it expects annual LNG demand to double to 700 million tons by 2040.
• The Thai government may consider lifting the nationwide night time curfew for 15 days in a trial period to gauge public response.
• Singapore grants Gilead’s drug known as Remdesivir approval with conditions as a treatment for the Covid-19 infection.
• South Korea sees another 50 cases in last 24 hours.
• Brazil saw 1200 deaths in the last 24 hours. Brazil has recorded the second-highest number of cases in the world.

BONDS

ASIAN NEWS

• US Mike Pompeo gives HSBC and Standard a serve over ‘corporate kowtows’ to China over Hong Kong.

• China’s saw a decline in the producer price index widening to 3.7% in the month from April’s 3.1%.
• The consumer price index rose 2.4% in May from a year earlier, following a 3.3% gain in April, and missing the median forecast for a 2.7% increase. Gains in pork prices, which are a key element in the country’s CPI basket, decelerated to just under 82% in May. Core inflation, which excludes more volatile food and energy prices, however remained unchanged at 1.1%.

EUROPEAN NEWS

• Early European markets expected to open slightly lower.
• All eyes on the Fed. Fauci warns CV19 may have further to run. No way will it disappear until vaccine is found.
• First economic forecast from the Fed tonight in six months. Things may have changed a little.
• Meanwhile in Brexit land, Ireland and Belgium have urged the EU to prepare for the double blow of UK no-deal and CV19.

And finally…..

A guy on vacation finishes his round, goes into the clubhouse. The head pro says, “did you have a good time out there?” The man replied “fabulous, thank you.” “You’re welcome,” said the pro. “How did you find the greens?” Said the man: “Easy. I just walked to the end of the fairways and there they were!”

Golf balls are like eggs. They’re white, sold by the dozen, and a week later you have to buy some more.

After a particularly poor round, a golfer spotted a lake as he walked despondently up the 18th. He looked at his caddie and said, “I’ve played so badly all day, I think I’m going to drown myself in that lake.” The caddie, quick as a flash, replied, “I’m not sure you could keep your head down that long.”

Clarence

XXX