The ASX 200 cracked today after a quiet start the index finished down 93 points to 5920 (1.5%) Dow futures dropped 17 points. After a tentative start the market gave way as the Victorian confidence sapping lockdown weighed on investors minds. Banks were in the doghouse after announcing they would be open to extending mortgage holidays for some borrowers in need. The Big Bank Basket dropped to $124.79. CBA down 0.9% and WBC down 1.8%. In other financials, MQG dropped 0.9% and MFG down 4.1%. Miners came under pressure as BHP fell 1.0% and FMG down 0.9%. Gold miners though were enjoying healthy gains on bullion rises and a falling AUD. NCM up 0.1% with NST the best of the best up 6.5%. BGL also had a good gain today up 12.0%. In the industrial space TLS pushed ahead as a defensive 5G Cloud play up 0.6% whilst the rest of the sector was under pressure, defensives tried hard to buck the down draft with COL up 2.4% and WOW up 1.0% but healthcare fell led by CSL down 3.3% and tech came under profit taking with the APT falling 2.9% after its well supported placement at 6600c. The All Tech Index dropped 2.1%. In corporate news, NAB is preparing to launch a hybrid offer, WAM up 5.5% after an investment update. The 10-year bond yield slipped slightly to 0.87%. In Asia, another mixed session with Japan down 0.5% and China up 0.5%. HK up 0.4%.

Today’s Highlights

• ASX 200 down 93 points as lockdowns sap confidence.
• High 6018 Low 5920 Average volume. Closes on lows.
• Big Bank Basket falls to $124.79
• All Tech Index down 2.08%
• 82 trading days until the US election.
• Dow Futures down 17.
• 10-year bond yield slips to 0.87%
• AUD slips to 69.40c
• Aussie gold rallies to $2585.
• Bitcoin steady at US$9272
• In Asia, another mixed session with Japan down 0.5% and China up 0.5%. HK up 0.4%.

STOCKS

• BGL +12.00% ceasing to be a substantial holder
• NST +6.46% June quarter trading update.
• WAF +6.08% Production update.
• WAM +5.49% Investment update.
• Z1P +5.20% BNPL still in vogue.
• AWC -7.02% tax assessments.
• AEF -6.84% under pressure again.
• BAP -5.00% Victoria shut down.
• CBR -29.50% business update. Not good for wheels.
• QFE -15.85% quarterly business update
• SWF -9.85% profit taking.
• SPT +8.42% record growth in Q2 FY20.
• 5GN +6.20% small acquisition.
• AEI +11.48% CV19 winner still.
• RHC -2.05% JP Morgan says go overweight.
• RIO -0.78% GS downgrades.
• WAM +5.49% declares final dividend.
• SYD -1.46% Melbourne lockdown hurts.
• Speculative Stock of the Day: Arrow Minerals (AMD) +50.00% drilling has commenced at Dassa discovery in Burkina Faso. Low volume day in fantasy land.
• Biggest Rises: BGL, NST, WAF, PRU, WAM, Z1P, VGI and COE
• Biggest Falls: DHG, ELO, AWC, AEF, PNV, BIN, DDR and BAP.

TODAY

• Splitit Payments (SPT) +8.42% Q2 merchant sales volume up 260% to US$65.4m vs year ago. Gross revenue up 460% to US$2.4m, total merchants up 104% to 1K and total unique shoppers up 85% to 309K over the same period.
• WiseTech Global (WTC) -2.62% Completes earnout renegotiations for CMS Transport, Systema and znet, and partially close-out Taric and Prolink. The transactions involve immediate equity issuance of $10.4m and a cash payment of $1.7m, with $18.2m of future potential equity earnouts. Overall, the transactions remove $33.3m of future contingent cash liabilities. The transactions will result in a one-off $8.1m gain in its FY20 financial statements.
• Select Harvests (SVH) -2.31% Estimates 2020 crop volume to be 23,000MT vs year-ago 22,690 MT. Overall the crop quality is good, however, a portion has been hit by late harvest rains and wet storage conditions. Export customer shipments are back near normal levels. The domestic market has been stable with a shift from the Food Service segment into the Retail segment. 2020 crop is over 80% committed (including internal sales) at prices in the range of $7.25 – $7.75/kg.
• Charter Hall Retail REIT (CQR) -2.47% Acquires 52% interest in Coles leased distribution Centre for $111.8m.
• Afterpay (APT) -2.94% Completes institutional placement, raising $650m at 6600c/share. Tencent has reportedly submitted a “big” bid at the $66/share top of the placement price range. The Chinese conglomerate looking to increase its 5% stake in the company.
• Kogan.com (KGN) -1.61% Completes upsized SPP of $20m vs prior $15m.
• Newcrest (NCM) +0.09% Has hired an investment bank to see if it should decrease or increase its 13.6% stake in SolGold, an Ecuadorean gold and copper play. The decision follows SolGold’s agreement in May to a financing package (~US$150m) for its Alpala project with Franco-Nevada. Newcrest contested the decision, urging SolGold to raise funds via equity.
• Saracen Minerals (SAR) +1.83% FY gold production of 520,414oz vs guidance of 500,000koz. Gold sales for the quarter of 148,011oz at an average sale price of $2,280/oz for sales receipts of $337.5m. Net cash of $48m at 30 June.
• Northern Star Resources (NST) -6.46% FY20 interim dividend of 7.5cps to be paid on July 16. Generated underlying free cash flow of $217.9m in the June quarter from the sale of 262,717oz. Total sales for FY20 900Koz, gold produced totalled 905Koz, (1.6%) below the lower end of the FY20 guidance, which was withdrawn due to COVID-19. The balance sheet was net cash positive at June 30, with corporate bank debt of $700m.

ECONOMIC NEWS

• Westpac has revised down its economic activity by 20bps due to the Victorian lockdown. It has slightly lowered its annual forecast for 2020 from a contraction of 4.0% to 4.2%.
• Treasurer Frydenberg is considering new phases of income support.

COVID-19 NEWS

• Brazil’s President Bolsonaro has tested positive for CV19.
• New data show American consumers may not be prepared to return to pre-pandemic spending levels. More than 40% of people who spent money on movies, event tickets or at bars before the pandemic now plan to not spend as much on those activities as before.
• The Victorian outbreak has spread to the ACT. 3 news cases. The ACT has now closed its border to anyone traveling from Victoria other than returning residents, who must quarantine for 14 days.
• Trump is considering banning TikTok in the US over China’s handling of the virus.
• Beijing has no new cases for the second day.
• US infection rates now around 3m. And we think Victoria is a problem.

BONDS

ASIAN NEWS

• US has threatened HK to undermine the HK/USD peg.
• AirAsia’s future in doubt.
• China is scaling back its meat imports from other countries on virus concerns.

EUROPEAN NEWS

• Deutsche Bank slapped with a US$150m fine for links to Jeffrey Epstein.
• US has imposed visa restrictions on some Chinese officials over Tibet.
• US launches mass testing in virus hotspots.
• Novavax has signed a US$1.66bn deal to fund vaccine production.
• US says foreign students must leave the country if classes go online. Tough school. Foreigners constitute around 5.5% of the students enrolling in US colleges and contributed over US$ 41bn to the US in fiscal year 2019. US government figures show that last year, more than 373,000 of these visas were granted.
• Mary Trump’s book set to create a few waves. Suspect she won’t be going to the White House for Xmas dinner.

And finally….

I was really mad at my friend Mark for stealing my dictionary. I said: “Mark, my words.”

My friend in the country couldn’t afford his water bill… So I sent him a “Get Well Soon” card.

“I have a split personality,” said Tom, being frank.

A Tibetan monk sees the face of Jesus in a tub of margarine. He raises his eyes to the heavens and said: “I can’t believe it’s not Buddha!”

Please send new material!!!!

Clarence

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