The ASX 200 rose 112 points to 6053 finishing close to highs as investors piled into resource stocks and healthcare. Big miners enjoyed a day out with BHP up 2.5% and FMG up 3.3% on higher commodity prices. Gold miners too found favour despite no change in the AUD gold price, NCM up 2.3% and NST up 3.0%. Healthcare cheered up as CSL rose 3.0% on vaccine talk, SHL rose 1.7% and RHC up 2.9%. Other industrials also better led by WOW up 1.3% and COL up 1.3% with APA up 2.8% as defensives with some dividend potential drew buyers. Banks finally joined in late in the day triggering a kick higher with the Big Bank Basket up to $127.55 after a slow start. CBA the star with a 1.4% rise. Tech though was somewhat more muted with the BNPL sector under some pressure as Z1P fell 6.7%, SZL dropped 7.7% and OPY closed down 11.8%. APT bucked the trend having announced a deal to join ApplePay and Google in making payments in the US. The All Tech Index rose 2.7% mainly as APT rose 2.4% and XRO rose 3.3%. In corporate news, WPL fell 2.1% after its impairment, ORG didn’t want to be left out and made its own impairment though up 1.6%. Plenty of quarterly update around in the BNPL stocks hurting sentiment and PAR gained 6.0% on its business update. CDV sprinted 17.0% ahead after a takeover bid at 66c. FZO up 33.9% on an investor briefing and PNR did well on a quarterly update rising 7.0%. In economic news, we had consumer sentiment falling 6.1 points as CV19 restrictions sap confidence. The ten-year bond yield fell slightly to 0.88% whilst the AUD is knocking on the door of 70c. Ironic that the AUD is so strong, and we cannot go overseas. In Asia, markets mixed with Japan up 1.5% and China down 1.8%, HK falls 0.3%.

Today’s Highlights

• ASX 200 up 112 to 6053. Better volume, bullish close.
• High 6053 Low 5957. Closes on high.
• Miners star as Iron ore rises again. JP Morgan lifts PTs.
• Big Bank Basket firms to $127.55
• All Tech Index up 2.7%
• QLD to become the home of the AFL.
• OPEC plus meeting today.
• 77 trading days until the US election.
• Dow Futures up 300.
• 10-year bond yield slip to 0.88%
• AUD drifts to 69.98c
• Aussie gold steady at $2582.
• Bitcoin rises to US$9239
• In Asia, markets mixed with Japan up 1.5% and China down 1.8%, HK falls 0.3%.

STOCKS

• CIA +10.29% iron ore rally continues.
• KGN +6.88% just keeps going higher and higher.
• PAR +6.01% positive update.
• SZL -7.75% Z1P -6.68% OPY -11.82% quarterly update and profit taking take toll.
• DEG -3.47% change in substantial holing.
• PNR +6.98% quarterly.
• BET +6.17% quarterly results.
• DTC +11.24% broker upgrades on acquisition.
• CDV +16.95% takeover at 66c.
• FZO +33.87% Investor update conference call.
• 3DP +34.41% written up in the newsletter this morning.
• Speculative Stock of the Day: 1^st Group (1^ST) +38.71% company announced a strategic partnership with Openpay.
• Biggest Rises: CIA, PNI, KGN, CUV, NWH, PAR and NWS.
• Biggest Falls: SZL, Z1P, DEG, VGI, IFL, VGI and IFL.

TODAY

• Brickworks (BKW) +4.91% Understood to have approached Knauf about buying its Australian assets which are thought to be valued around $300-400m.
• Saracen Minerals (SAR) -0.98% Resumes operations at Carosue Dam. FY21 production guidance remains unchanged.
• Senex Energy (SXY) +4.0% Reports FY20 gas production of 2.1mmboe, close to the top end of guidance. EBITDA expected at the top end of its $45-55m guidance range. Q4 sales volumes (kboe) 661 vs year-ago 301. Revenue $33.7m vs year-ago $23.5m. Capital expenditure (net to Senex) $34.8m vs year-ago $37.3m.
• New Hope Corp. (NHC) +4.74% CFO Matthew Busch resigns.
• Australian Ethical Investment (AEF) -0.16% Reports funds under management FUM $4.05bn vs quarter-ago $3.59bn. Quarterly net flows $0.12bn.
• Woodside Petroleum (WPL) -2.15% To recognise post-tax impairments of $6.3bn in H1. ~80% of the oil and gas impairment losses are due to the immediate reduction in oil and natural gas prices assumed up to 2025. CEO comments, “Woodside’s focus remains on cash preservation, capital discipline and maintaining the strength of our balance sheet.” Reports Q2 production 25.9mmboe vs year-ago 17.3mmboe. Revenue US$805m vs year-ago US$836m. Capex US$340m vs year-ago US$299m.
• Medibank Private (MPL) +0.68% Understood to have acquired a 49% stake in East Sydney Private Hospital for $40m. There is speculation MPL is on the lookout for more acquisitions with small privately owned hospitals under pressure due to the conditions linked to COVID-19.
• oOh!media (OML) +2.41% There are reports OML could hire former Chairman Michael Anderson as CEO.
• Afterpay (APT) +2.42% Announce deals with Apple Pay and Google Pay. US retail stores, Forever21, Fresh, Skechers and Solstice Sunglasses are among some of the first stores to offer Afterpay this year.
• Zip reports (Z1P) -6.68% Q4 revenue up 64% to $44.2m vs year ago. Merchants up 51% to 24.5K, customers up 60% to 2.1m, transaction volume up 62% to $570.7m over the same period.
• Qube Holdings (QUB) +3.68% To sell Minto Properties to Charter Hall for $207m.
• Openpay Group (OPY) -11.82% Reports Q4 revenue up 45% to $4.5m vs year ago. Hardship requests returned to normalised levels. Active plans up 229%, active customers up 141% and active merchants 52% over the same period. UK active Customers up 95% from the end of March. Agreement with JD Sports is trading well above expectations. Net Bad Debts as a percentage of total transaction value TTV is less than 2.9% vs 4.7% in 3Q20.
• Origin Energy (ORG) +1.57% Expects non-cash charges between $1.16-1.24bn in FY20 (post-tax) driven by revised commodity price assumptions. Energy market’s underlying EBITDA remains unchanged at $1.4-$1.5bn. Expects additional non-cash provision between $25-35m (post-tax) for bad and doubtful debts relating to customers’ ability to pay their energy bills.

ECONOMIC NEWS

• Westpac-Melbourne Institute Index of Consumer Sentiment fell 6.1% to 87.9 in July from 93.7 in June. Sentiment was hit by the rise in cases over the last month and new restrictions in Melbourne. Confidence around the ability to contain the virus permanently has fallen. Job loss concerns have escalated sharply, the latest deterioration reflecting a reassessment of COVID disruptions and a slower reopening in July. Housing-related sentiment bucked the trend, improving slightly.
• Westpac revised its budget deficit estimate for 2020/21 to $240b from the $170b which was released in May.

COVID-19 NEWS

• South Korea reported 39 more Covid-19 cases in 24 hours
• The Trump administration has ordered hospitals to send data on coronavirus patients to a central database and skip the Centers for Disease Control and Prevention.
• Tokyo raised the Covid-19 warning to the highest level as infections spread.

BONDS

ASIAN NEWS

• President Trump has signed the Hong Kong act and China threatens to retaliate. HK no longer special at all.
• Asian companies accounted for almost half of the global stock offering haul in the first half of this year.

EUROPEAN NEWS

• European markets expected to open around 1.5% higher.
• Tesla has grown by 1.2 Toyotas this year in market cap.
• In Russia, mum and dad investors are rushing back into the market with rate cuts and a savings raid giving investors little alternative.
• Catalan government imposing new restrictions as cases rise.
• Delta Airlines has steered 17,000 staff into early retirement.
• China set to retaliate against UK on its Huawei decision.

And finally…

 

Navy admiral, Jim Lorenzo, and Army general, Mike Cunningham, were fishing together on a lake when a storm blew up and their boat capsized.

Both men were left floundering helplessly in the water momentarily.

Eventually the general managed to right the boat and clamber on to it.

General Cunningham then extended an oar out to Admiral Lorenzo getting him to hang on to it, pulling him in, and thereby saving him from almost certain drowning.

As the admiral was dragged into the boat, he puffed, “Please don’t say a word to anyone about this. If the Navy knew I couldn’t swim, I’d be disgraced.”

“Don’t worry,” said General Cunningham, “your secret’s safe with me buddy. I’d hate my men to find out that I couldn’t walk on water either.”

 

 

Sergeant Wilson was appalled to discover that ten of his men were late arriving back at camp following their leave.

As he waited impatiently at the camp gates, one of his men finally ran up to him, panting heavily.

“Sorry, sir, I can explain,” said the soldier.

“Soldier, this better be good,” responded his sergeant.

So the soldier told Sergeant Wilson his story, “Sir, you see I had a date and it ran a little late. I ran to catch the bus but I missed it. So I hailed a cab but it broke down. I managed to find a farm where I bought a horse but it dropped dead on me. In the end I had to run 10 miles but I am here now.”

Sergeant Wilson was skeptical about the soldier’s explanation but at least he’d made it back to camp. The sergeant thought about it momentarily and then decided he’d let the soldier off this time.

A couple minutes later, eight more of Sergeant Wilson’s men ran up to the camp gates, panting heavily. The sergeant demanded explanations for why they were all late and each of them told the same story.

“Sorry sir, you see I had a date and it ran a little late. I ran to catch the bus but I missed it. So I hailed a cab but it broke down. I managed to find a farm where I bought a horse but it dropped dead on me. In the end I had to run 10 miles but I am here now,” each soldier repeated in turn.

Sergeant Wilson eyed them all suspiciously but since he’d decided to be lenient with the first soldier, he decided that it would only be fair to excuse them too.

A few minutes later the tenth and final soldier came running up to the camp gates, panting heavily.

“And where have you been?” snapped Sergeant Wilson.

The soldier quickly responded, “Sorry sir, you see I had a date and it ran a little late. I ran to catch the bus but I missed it. So I hailed a cab but….”

Sergeant Wilson interrupted him immediately, “Let me guess soldier. It broke down?”

“No, sir,” said the soldier, “There were so many dead horses in the road it took forever for the cab driver to find a way around them all.”

Clarence

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