The ASX 200 dropped 2 points to 6013 in a volatile day. Dow futures down 195. After an impressive start, the ASX 200 gave up all gains and then found its nerve before falling into the close as Victoria went back into lockdown. The RBA decision did little to move the dial. Miners rallied hard after iron ore posted gains in Asia with BHP up 1.3% and RIO up 0.9%. Gold miners too in demand as bullion rose slightly, a good report from SBM up 10.3% helped set the tone for the sector. The big news of the day was the $800m capital raising for market darling APT and the sell down of $250m worth from the founders. The All Tech Index rose 0.9% which given the biggest component was in a trading halt was a sign of strength in the sector. Healthcare mixed as CSL fell 0.2% and FPH continued to rally hard up 2.5%. Industrials were firm but unspectacular across the board. WES up 0.9%, BXB up 2.3% and TPG up 6.7%. The banks once again weighed with a late fall on the close. CBA down 0.2% the best of the bunch. The Big Bank Basket steady at $126.55. In other corporate news, SZL rose 24.6% after a record report, AEF up 8.2% on its performance fee and MFG revealed its FUM and rose 2.7%. In economic news, the RBA kept rates unchanged as expected and continued it would do whatever it takes to support the economy. The AUD rose slightly more to 69.73c on USD weakness and the 10-year yield drops to 0.89%. In Asia, a little more muted today with Japan down 0.4% and China still doing well up 1.7%.

Today’s Highlights

• ASX 200 down 2 points in late Victorian inspired collapse.
• High 6078 Low 6004. Average volume. Volatile day.
• RBA unmoved. Victorian lockdown.
• Big Bank Basket falls to $126.55
• All Tech Index up 0.91% though APT in trading halt.
• 83 trading days until the US election.
• Dow Futures down 195.
• 10-year bond yield slips to 0.89%
• AUD firms to 69.73c
• Aussie gold slips to $2559.
• Bitcoin rallies to US$9289
• In Asia, more muted today, Japan down 0.6% but China building on yesterday’s gains up 1.8% and HK eking out a 0.1% gain.

STOCKS

• SBM +10.33% production update.
• AEF +8.19% performance fee kicker.
• KGN +7.59% tech stocks shine.
• CIA +5.84% Appendix 2A.
• FMG +6.32% iron ore bounces in China.
• GOR +7.08% on the move.
• LOV -9.49% rolling off the rally.
• SZL +24.57% feels the sizzle on record 2Q20.
• EOS -8.99% profit taking.
• TPW -7.22% Appendix 2A.
• FWD +6.02% business update. Thin trade.
• Speculative Stock of the Day:AD1 Holdings (AD1) +185.71% extends managed services agreement with Victorian government for a further three years.
• Biggest Rises: PNI, SBM, AEF, KGN, GOR, TPG and FMG.
• Biggest Falls: LOV, EOS, TPW, NCK, PBH, OML, MOE and JLG.

TODAY

• FlexiGroup (FXL) -4.35% CFO Ross Aucutt steps down. He will stay with the company until early October.
• Dexus (DXS) -1,81% DXS’ Australian Logistics Trust acquires two industrial properties for $173.5m. The properties are 37-39 Wentworth Street, Greenacre NSW (Greenacre) and the Ford Facility at Merrifield Business Park, Mickleham VIC (Merrifield).
• Downer EDI (DOW) – unchanged –  Awarded road maintenance contracts by South Australian Government DPTI valued at an ~$420m over a maximum term of 13 years.
• Afterpay (APT) – Launches $650m placement and $150m SPP priced at 6175c/share. Co-founders, Anthony Eisen and Nicholas Molnar to sell 2.05m shares, representing 10% of their respective holdings. Funds will be used to accelerate APT’s investment in growing underlying sales, and prioritising global expansion in the short term. The updated global expansion roadmap will see the company launch in Canada in 1Q21, with the potential to launch into new markets in late 2020 or early 2021. Notes it is exploring several small M&A opportunities. Q4 underlying sales up 127% to $3.8b vs year ago. Merchant revenue margins expected to be similar or better than 1H FY20. Net transaction margin is expected to be ~2% for FY20. EBITDA expected to be between $20-25m in FY20. 9.9m active customers. Key active customer milestones were achieved in both the US and the UK in June. Active merchants reached 55.4k in FY20, up 72% vs year ago.
• St. Barbara (SBM) +10.33% FY20 gold production 382Koz vs guidance 370-400Koz. Q4 June gold production of 108,612oz. Total cash at bank and term deposits was $406m on June 30.
• Magellan Financial (MFG) +2.71% FUM at the end of June $97.18bn vs month-ago $98.45bn. Over the month, Magellan experienced net inflows of $249m. Entitled to performance fees of ~ $81m for the year ended 30 June.
• Australian Finance Group (AFG) -0.60% Q4 mortgages lodged 31,080 vs year-ago 25,243. Lodgement volume $16.91bn vs year-ago $12.97bn.
• Australian Ethical Investment (AEF) +8.19% Increases FY underlying profit guidance to $9.0-9.5m vs prior $6.8-7.5m. Its Emerging Companies Fund returned 13.9% after fees for the year to June 30 against its benchmark of negative 7.4%. A performance fee of $3.64m was earned.
• Sezzle (SZL) +24.57% Expects underlying merchant sales (UMS) to reach an annualized pace of US$1bn by the end of 2020. Second-quarter results, UMS up 349% to US$188m vs year ago. Active consumers up 243% to 1.48m, active merchants up 219% to 16,112 over the same period. Notes leading loss indicators continue to show improvement. Customer analysis showed increased repeat usage (87.5%) and purchase frequency of cohorts (~15x per year).

ECONOMIC NEWS

ANZ-Roy Morgan consumer confidence fell 1% to 92.1 points last week, hitting an eight-week low. ANZ economist, Catherine Birch had this to say, “although there was a marginal improvement in how people felt about their financial conditions, confidence in economic conditions continued to deteriorate. This was not surprising, with new COVID-19 case numbers continuing to escalate in Melbourne.”

RBA RATES DECISION

• The Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
• The outlook remains uncertain and the recovery is expected to be bumpy and will depend upon containment of the coronavirus.
• The Board is committed to do what it can to support jobs, incomes and businesses and to make sure that Australia is well placed for the recovery. Its actions are keeping funding costs low and supporting the supply of credit to households and businesses. This accommodative approach will be maintained as long as it is required. The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3% target band.

For the full statement click here.

COVID-19 NEWS

• Victoria is back in a six week lockdown.
• No new infections in China’s capital for the first time since an outbreak started in the city on June 11.
• Atlanta Mayor Keisha Lance Bottoms said she has tested positive for the virus.
• New Zealand’s government will limit the number of citizens flying home with the national airline to reduce pressure on its overflowing quarantine facilities.

BONDS

ASIAN NEWS

• Samsung Electronics reported better-than-expected quarterly.
• TikTok is pulling its viral video app from HK mobile stores in the coming week. The first tech company to react to draconian Chinese laws.

EUROPEAN NEWS

• Merkel under siege for her stance on taking a firm line on China.
• Atlanta Fed chief says he is worried that US recovery is levelling off.
• The US says foreign students must leave the country if classes go online.
• Palantir has filed plans for a long awaited US stock market listing.
• Worryingly in one large scale study Spain has found only 5% of people formed antibodies.

And finally…from people far funnier and smarter than Clarence…

“If there’s one thing that really pisses me off… I call that a good day.”
“An original idea. That can’t be too hard. The library must be full of them.”

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

“I like rice. Rice is great when you’re hungry and you want 2,000 of something.”

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

Clarence

XXX

 

Spare a thought for Victorians. back in a six week lock down..