The ASX 200 closed up 41 to 6042 (0.7%) after early strong rally evaporated as AUD hits 72c. Dow futures up 57 points. Banks were mixed with CBA steady though NAB up 0.8%. The Big Bank Basket rose to $123.15. Miners were doing well at least in iron ore with BHP up 4.9% and RIO up 1.5% despite being XD today. FMG continue to march ever onwards up 1.5% whilst gold stocks were muted given the AUD bullion price is steady(ish). NCM rose 0.5%, NST fell 0.9% and EVN up just 1.1%. Seems the big gold miners are stalling as the mid-caps pick up some slack. Healthcare back on the nose on the stronger AUD, CSL down 0.1% and RMD in ICU as it is suffering on slow machine sales, falling 7.4%. Industrials were mixed, WES fell 0.5%, COL down 1.1% and WOW down 0.2% with TCL under some pressure on Victorian tolls or lack of them. Energy stocks were firm, WPL up 1.6% and STO up 3.8%. In tech stocks, the All Tech Index once again flatlined as some sector rotation is creeping in. APT up 0.4% and XRO off 1.1%. Travel stocks were better on vaccine hopes, CTD up 6.9% and WEB up 6.0%. QAN only managed a 2.1% rally after VAH plans. In corporate news, SCG is down 2.3%, expects a 10% decline in the carrying value of its portfolio. NCK is up 14.6%, expects first-half profit to be up at least 50%-60% vs 1HFY20, notes July trading has been extremely buoyant. HVN lifted 7.5% with its results just around the corner. ELO down 7.9% despite results meeting guidance. ALD up 2.2% on speculation that Couche-Tard is considering re-launching its bid. In economic news, ScoMo poured some cold water on the outlook with unemployment now tipped to hit 10%. The AUD went through 72c and the 10-year yield back up to 0.85%. Asian markets weaker with Japan down 0.5% and China down 1.4%.

Today’s Highlights

  • ASX 200 up 41 to 6042.
  • High 6049 Low 6009.
  • Big Bank Basket bounces back to $123.15
  • All Tech Index flatlines. Again. Cyber security stocks in vogue.
  • 61 trading days until the US election.
  • Dow Futures up 57.
  • Gold steady rallies to $2,843 but AUD hurts.
  • 10-year bond yields rise to 0.85%.
  • AUD rises to 72.02c
  • Bitcoin soars to $11,609
  • Asian markets weaker with Japan down 0.5% and China down 1.4%.

STOCKS

  • RMD -7.41% earnings helped by ventilator and mask sales.
  • ELO -7.86% no Mr. Blue Sky here. disappointing result.
  • JIN -3.42% comes up lemons today.
  • SCG -2.29% broker downgrades following write-downs.
  • NCK +14.58% sofa so good with furniture sales to watch Netflix on.
  • HVN +7.47% catches the Scali uptick.
  • CTD +6.89% VAH resurrection maybe?
  • MND +7.68% good bounce on higher iron ore.
  • DUB -3.56% general availability on Telstra.
  • FMG +1.48% Bell Potter says sell. PT 1250c.
  • VRL -1.41% new loan facility.
  • DDB +125.00% new IPO. Good start. Former Emeco CEO major shareholder.
  • QAN +2.16% JP Morgan puts a buy on it.
  • Speculative Stock of the Day: intelliHR (IHR) +160.27% Bevan Slattery buys big swag. Raises $5.5m at 7.5c. More magic from Slattery after 3DP.
  • Biggest Rises: NCK, PLS, CEN, MND, HVN, IRI, CTD and WEB.
  • Biggest Falls: ELO, RMD, GMA, DJW, JIN, SM1, VCX and NEA.

TODAY

  • Scentre Group (SCG) -2.29% Expects to report a decline in the carrying value of the portfolio of 10% due to the impact from COVID-19. Also expects to report net Operating cash flow in excess of $250m.
  • Lovisa Holdings (LOV) +0.84% Stage 4 restrictions will see 30 Lovisa stores across Melbourne temporarily close. Government closure orders have resulted in 19 stores closures in California and 2 stores in New York have yet to be allowed to re-open from the original temporary closure in March.
  • Nick Scali (NCK) +14.58% FY underlying NPAT $42.1m vs consensus $38.5m and guidance $39-40m. Sales $262.5m vs year-ago $268m and consensus $275.1m. Gross margin 62.7% vs year-ago 62.9%. EBITDA $65.7m vs consensus $60.7m. Final DPS 22.5c. Expects order book for FY21 to be significantly higher than previous years. Expects first-half profit to be up at least 50-60% vs 1HFY20, notes July trading has been extremely buoyant.
  • Metcash (MTS) +0.71% Appoints Alistair Bell as CFO. Most recently, Bell was Group CFO of GrainCorp Limited, a position he held for almost 10 years.
  • ASX (ASX) -0.04% July activity. Volatility 0.9% vs year-ago 0.4%. Expected future volatility (as measured by the S&P/ASX 200 VIX) increased to an average of 19.1 vs year-ago 11.2. Total capital raised $4.41bn vs year-ago $4.78bn. Average daily number of trades down 12% vs year ago. Average daily value $5.4bn vs year-ago $4.46bn. Futures & options average daily volume down 22% vs year ago.
  • ResMed (RMD) -7.41% Q4 earnings per share (EPS) US133c ex-items. Revenue US$770.3m vs consensus US$752m. Non-GAAP gross margin expanded 60 bps to 59.9. “We finished FY20 with double-digit revenue growth to and operating profit up 24% on a non-GAAP basis,” said Mick Farrell, ResMed’s CEO. Looking ahead, we are confident in our ability to navigate through the ongoing challenging clinical and economic environment to deliver for all our stakeholders. Sleep labs and physician practices are reopening across many geographies, and we’re seeing accelerated adoption of digital health solutions which supports our long-term strategy.”
  • ELMO Software (ELO) –7.86% Full-year EBITDA -$4.2m vs guidance of -$2.5-4.5m. Revenue $50.1m vs guidance of $50-52m. Annualised recurring revenue (ARR) $55.1m vs guidance of $55-57m. ARR per customer $32.7K vs year-ago A34.2K. Remains well capitalised to continue investing in both organic growth and strategic acquisitions. In FY21 expects revenue $57-61m, EBITDA -$4-7m and ARR $65-70m.
  • Ampol (ALD) +2.23% Speculation that Couche-Tard is considering re-launching its bid for ALD. Newswires report that with Couche-Tard recent losing bid for Marathon Speedway’s service stations to 7-Eleven, the company might renew its interest in Ampol. ALD is currently in talks with Charter Hall as they complete due diligence on sale of 250 retail fuel sites.
  • Village Roadshow (VRL) -1.41% Queensland businesses operating at a reduced capacity to comply with COVID safety protocols. Cinemas in metropolitan Melbourne and some areas of Victoria are closed. Cinemas across the rest of Australia are operating under social distancing rules. VRL notes it is still operating on a negative cash basis which it expects will continue for several months. Has secured additional funding of $70m, to raise a minimum of $35m through new shareholder equity.

ECONOMIC NEWS

  • The amount of capital raised by ASX-listed companies dropped in July.
  • After surging to $26bn in June, 2.6 times higher than the same month last year, the ASX today reported total capital raised of $4.4bn in July, 8% down on the same month last year. July saw initial capital raised of $387m, which compared to $16.5bn in June. Secondary raisings were down from $9.4bn two months ago to $4bn last month.
  • ScoMO warned that Victorian lockdown could knock GDP by 2.5%. Unemployment also likely to peak at 10% rather than 9.25% Treasury had forecast. The effective unemployment rate that includes workers reduced to zero hours, is now expected to climb back to nearly 14% from around 11%.

COVID-19 NEWS

  • Malaysian glove maker Harps Holdings is considering an initial public offering in Kuala Lumpur to raise about US$500.
  • Philippine’s GDP shrank 16.5% from a year ago, according to the national statistics agency, the worst reading in a data series going back to 1981.
  • Japanese PM Abe said the current Covid-19 spread doesn’t call for an emergency declaration.

BONDS

ASIAN NEWS

  • China has signalled it does not want the current spat with the US to get any worse. The official news agency reported “Anyone who tries to start a new Cold War in the 21st century will be on the wrong side of history and will only be remembered as the one who has upended international cooperation.”

EUROPEAN NEWS

  • European markets set to open weaker.
  • Jeff Bezos has sold around US$3.1bn worth of stock in Amazon. Must need a new house or country.
  • BoE policy decision today. Forecasts expected to be wound back on CV19 impacts.
  • Goldman Sachs says a vaccine may need to market dislocation as investors switch from tech into cyclical stocks and back to bonds.

And finally…

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There was a Scottish painter named Smokey MacGregor who was very interested in making a penny where he could, so he often thinned down his paint to make it go a wee bit further.
As it happened, he got away with this for some time, but eventually the local church decided to do a big restoration job on the outside of one of their biggest buildings. Smokey put in a bid and, because his price was so low, he got the job.
So he set about erecting the scaffolding and setting up the planks, and buying the paint and, yes, I am sorry to say, thinning it down with turpentine…
Well, Smokey was up on the scaffolding, painting away, the job nearly completed, when suddenly there was a horrendous clap of thunder, the sky opened, and the rain poured down washing the thinned paint from all over the church and knocking Smokey clear off the scaffold to land on the lawn among the gravestones, surrounded by tell-tale puddles of the thinned and useless paint.
Smokey was no fool. He knew this was a judgment from the Almighty, so he got down on his knees and cried “Oh God, Oh God, forgive me! What should I do?”
And from the thunder, a mighty voice spoke…

“Repaint! Repaint! And thin no more!”

Clarence

XXX

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