The ASX 200 fell 89 points to 5815 as Friday’s US market fall weighed. Slight uptick at the close helped. as year end looms. The Dow Futures down slightly by63points. Despite a vain attempt at a rally around lunch time the index slipped back in the afternoon as the banks weighed on sentiment. The Big Bank Basket fell to $123.04 with CBA down 1.0% and NAB down 1.6%. Elsewhere in other financials, MQG dropped 2.3% and MFG 4.6% with the insurers also taking losses led by SUN down 3.3% ahead of a rumoured restructure and job losses. Big miners eased back as BHP fell 1.9% and FMG had a bad day for a change down 3.0%, Gold miners fared better as the AUD fell slightly and bullion rose, NCM up 0.8% and EVN up 4.1%. Energy stocks wobbled as WPL fell 2.8% and ORG down 4.4%. Healthcare in the wars, CSL down 1.1% and RHC off 0.75% though FPH put on 6.9% after its results. Industrials soft across the board with TCL down 5.1% and ex-dividend, ALL down 3.1% and APA down 3.1% in defensives. TWE continued their race to the bottom of the glass falling 3.25% today. REITs fell over today as some went ex- distribution including NSR down 2.1%. Tech stocks did slightly better than the market with the All Tech Index fell 1.3%. In corporate news, IFN rallied another 3.4% after a bidding war broke out as UAC upped its offer to 86c. Iberdrola remains in the box seat with a 89c cash offer on the table. FPH breathed easy after its results up 6.9% and JIN slumped 13.23% after getting three lemons in its negotiations with TAH, up 0.9%, on a new 10-year deal. Nothing on the economic front today. The 10-year yield stable at 0.87%, AUD firms slightly to 68.82c. Asian markets fell with Japan down 1.98% and China down 0.95% as CV19 sours bull case.

Today’s Highlights

• ASX 200 drops 89 points to 5815.
• High 5881 Low 5773. Lower volume.
• Big Bank Basket recovers from early lows to $123.04
• All Tech Index down 1.3%
• 88 trading days until the US election.
• Dow Futures down 63
• 10-year bond yields steady at 0.87%
• AUD firms to 68.82c
• Aussie gold rises to $2576.
• Bitcoin falls to US$9109.
• Asian markets fell with Japan down 1.98% and China down 0.95% as CV19 sours bull case.

INSIGHTS FROM THE MARCUS TODAY TEAM

MARCUS STRATEGY: The market down over 100 first thing this morning. Volatility is elevated. The headlines are deteriorating. No reasons to step off the shore and set sail yet. Today we highlight a defensive portfolio – a list of stocks that will outperform in a falling market, although we have no interest in losing money more slowly. We also look at the ASX 200 chart and note that we would need another 150-point fall to break resistance. The S&P 500 chart shows the start a new downtrend. All this could deteriorate or recover in a blink with a vaccine or with re-lockdowns – it’s a bipolar market. Not safe yet. Happy to be sitting it out.

HENRY’S TAKE: A update on the Corona Packs and what is the Big Bank Basket I bang on about? Simples. Plus, the US updates on the Fear and Greed Index and GDP now. Sold out of HM1 on Friday as the discount closes up. The ASX sponsors a broker research service looking at small stocks. Worth subscribing to. And a look at the deal that JIN has done with TAH this morning. The market is not impressed as TAH flexes its muscles.

STOCKS

• FPH +6.88% good results.
• AVHDA +4.61% rall
• y wanes but at least it’s still up as US scheme is enacted.
• IFN +3.39% bidding war breaks out.
• PNC – suspended – asks for leeway on funding.
• FCL +5.87% welcomes F&G as new customer.
• REX +17.02% new routes.
• PET +5.08% bargain hunters step in.
• SLK +1.83% Brisbane ferry contract.
• JIN -13.23% TAH agreement.
• PBH -11.83% US restrictions back.
• NWH -10.08% ceasing to be a substantial shareholder.
• SXL -5.26% funding fails to flow into share price.
• ECX -10.37% business update.
• WZR -8.89% fintech pressure.
• Z1P -6.61% fintechs under the knife.
• ALG -7.89% Texas scrambles.
• RIO -1.74% gets a result in Mongolia on coal fired power
• Speculative Stock of the Day: Auteco Minerals (AUT) +100.00% high graded gold JORC inferred resource 830,000 oz@11.6g/t. Good volume too.
• Biggest Rises: FPH, FCL, HRA, AGG, AVHDA, EVN and IFN.
• Biggest Falls: JIN, PBH, NWH, LOV, WTC, PAR and HM1.

TODAY

• Jumbo Interactive (JIN) -13.23% Reaffirms FY20 guidance. Despite the significant decline in large jackpots during FY20, Jumbo is expected to increase sales compared to the previous year driven by greater demand for online lotteries over the COVID-19 period. Signs new agreement with TAH for a 10-year term until on or about July 2030.

• Regional Express Holdings (REX) +17.02% Looking to raise $30m to commence domestic operations in Australia. The board has confirmed March 1st 2021 as the targeted start date for domestic operations, subject to fund availability and regulatory approval.
• Eclipx Group (ECX)-10.37% Total unit sales in April, May and June were better than what had been anticipated at the start of COVID-19. New business writings in corporate operating leasing are currently tracking at 70-80% of average pre-COVID-19 levels. Novated monthly volumes are tracking at 75-80% of average pre-COVID-19 levels. The sale process for Right2Drive continues and is progressing to plan.
• Ampol (ALD) +1.00% Appoints interim CEO Matthew Halliday to the role on a permanent basis effective today.
• McMillan Shakespeare (MMS) -0.90% Expects FY20 underlying NPAT between $69-72m vs prior guidance $83m-87m (withdrawn by the company). The salary packaging business continues to be largely unaffected by the COVID-19 containment measures. Plan Partners has not experienced any disruption. New asset financing in Australia and NZ has remained subdued. FY20 statutory profit after tax will be impacted by ~£8m-£10m due to the write-down of intangibles and restructuring costs in its UK business. The retail financial services business has experienced a reduction in finance originations and yields. Expects statutory profit after tax to be reduced by an intangible impairment of ~$30m-$35m. To acquire JV partner’s 25% interest in Plan Partners for $8m.
• Monash IVF Group (MVF) -4.46% Guides H2 Adjusted NPAT $4.6m, down 55% vs year ago. Adjusted FY20 NPAT expected to be $14m. During May and June, observed positive early signs of the new patient pipeline returning to above pcp and pre-COVID-19 levels. Net debt at June 30 is expected to be less than $10m and the company will pay the deferred 1H20 fully franked interim dividend on October 2.
• Infigen (IFN) +3.39% Iberdola Australia increases its offer to 89c per Infigen stapled security.
• Fisher & Paykel Healthcare (FPH) +6.88% Full-year NPAT up 37% to NZ$287.3m vs consensus NZ$278.4m. Revenue up 18% to NZ$1.26bn vs prior guidance NZ$1.25bn and consensus NZ$1.24bn. A final dividend of 15.5cps was declared, up 15% vs year ago. For the first three months of FY21, hospital product’s growth has continued to accelerate, with hardware growth of over 300%. Hospital consumables are tracking at over a one-third increase, compared to the first three months of FY20. In FY21, expects NPAT between NZ$325m-340m and revenue in the range of NZ$1.48bn.

ECONOMIC NEWS

• Nothing new today.

COVD-19 NEWS

• Texas’s Covid-19 positive results surged to 14.31%, the highest for the second-most populous U.S. state since the pandemic emerged.
• U.S. VP Mike Pence encouraged people to wear masks to prevent the spread of the virus, two days after declining to give that specific guidance.
• Brazil had 30,476 new cases in the past day, a 2.3% rise from the previous day, bringing the national total to 1.34 million.

BONDS

ASIAN NEWS

• Nissan has promised to return to positive cash flow and start paying dividends again. The new CEO said his goal is to reach positive cash flow towards the end of 2021. The company is seeking to cut US$2.8bn in annual costs and bring through new models.
• The Vietnamese economy is doing ok unexpectedly. Gross domestic product rose 0.36% from a year earlier, compared with a revised 3.68% in the first quarter

EUROPEAN NEWS

• US Shale companies are going bust, Chesapeake Energy being the latest to file for protection on Sunday. More than 200 North American oil and gas producers, owing over US$130bn in debt, have filed for bankruptcy since the beginning of 2015.

• Macron does badly in local French polls. Greens killing it.
• EY says it too was deceived by Wirecard.
• Amazon has acquired a self-driving start up, Zoox for US$1.2bn.

And finally..

 

The best cure for Sea Sickness, is to sit under a tree. Spike Milligan

Having more money doesn’t make you happier. I have 50 million dollars but I’m just as happy as when I had 48 million.  Arnie.

If God had intended us to fly he would have made it easier to get to the airport. Jonathan Winters

America is the only country where a significant proportion of the population believes that professional wrestling is real but the moon landing was faked. David Letterman

After the game, the King and the pawn go into the same box An old Italian Proverb.

Clarence

XXX