The ASX 200 failed to kick on after good solid early gains with the index closing up a still respectable 28.5 points to 6139 (0.5%). Dow futures up points. Banks were a big driver today with the Big Bank Basket up to $128.85 with CBA numbers due this week, some short covering perhaps as some economic data is not a bad as it could have been. Elsewhere in financials, CGF numbers were once again on the nose, down 7.6% and AMP continues to be pressured down 1.1%. Big miners were better on upgrades to iron ore forecasts as BHP rose 0.9% and RIO up 0.85% though FMG fell 0.6% on some profit taking 0.6%. Gold miners continue to find sellers after a stellar run and the bullion price in AUD falling again. NCM down 2.8% and NST down 5.0%. Energy stocks flat lined, WPL up 0.5% and STO up 0.9%. In the industrial space, WES hit an all-time high though closed down 0.1% with DMP also hitting highs up 1.3%. Tech stocks were weighed down by APT losing 3.25% on some media talk and XRO slipping too by 1.2%. The All Tech Index down 1.29%. CSL had a good day again up 0.5% and looks to have locked in the low of $270 for the time being but in the healthcare space, MSB was crushed after some bad news from the FDA but failed to halt trade this morning leaving the stock vulnerable and it dropped 31.0%. In corporate news, JHX rallied by 6.8% after a good set of numbers, CIM up 5.0% on a new contract and SYD went into a trading halt with a company saving $2bn entitlement issue. On the economic front we saw business confidence rise slightly whilst payroll jobs remained steady and Victorian CV cases fell again showing some signs of stability at least. The 10-year bond yield rose to 0.87% and the AUD up to 71.82c. Asian markets better with HK up 2.5% and China up 0.8%. Tokyo reopened after a day off and is up 1.8%

Today’s Highlights

• ASX 200 up 28.5 to 6139.
• High 6186 Low 6112. Average volume.
• Big Bank Basket rallies to $128.85
• All Tech Index down 1.29%
• 59 trading days until the US election.
• Dow Futures up 111.
• Gold falls to AUD$2,806.
• 10-year bond yields rise to 0.87%.
• AUD slightly better at 71.82c.
• Bitcoin flops back to $11841
• Asian markets better with HK up 2.5% and China up 0.8%. Tokyo reopened after a day off and is up 1.8%.

STOCKS

• MSB -31.01% bad news on the doorstep from FDA. More on 13^th August.
• JHX +6.83% good numbers.
• DMP +1.29% hits a record high.
• WES -0.06% COL +0.64% hits record high.
• FLT +5.98% CTD +4.41% WEB +5.56% travel stocks up on some optimism.
• QAN +3.79% SPP buyers have done well.
• GPT +4.68% broker updates.
• CGF -% more issues with annuities.
• TLS +0.29% new director adds youth and entrepreneurship.
• IGL -21.88% Coles pulls catalogues.
• TNT -12.07% profit taking.
• WHC -2.14% faces 16 charges on mining law breaches.
• DEG -9.52% GOR -4.89% WAF -6.02% gold loses its shine.
• SVL -12.96% silver gets tarnished with gold.
• GGG +10.00% going great guns.
• MME +20.47% launches new payment solution.
• APT -3.25% Appendix 2A.
• Speculative Stock of the Day: Regeneus (RGS) +36.36% a blast from the past, the company has signed a Progenza OA licence deal with Kyocera for the treatment of knee osteoarthritis. RGS get US$19m upfront. Market cap only $41m.
• Biggest Rises: PGH, JHX, NWH, GMA, FLT, WEB, CIM and SCG.
• Biggest Falls: MSB, DEG, RED, CGF, RMS, PRU, SLR and JMS.

TODAY

• James Hardie Industries (JHX) +6.83% Q1 adjusted profit US$89.3m vs consensus US$84.1m, in line with the previous corresponding period. Revenue down 6% to US$626.3m vs consensus US$635.1m. EBIT US$124.9m vs consensus US$119m. Expects continued suspension of the dividend through to the end of FY21. Expects full-year adjusted profit between US$330-390m vs consensus US$343.5m. North American segment delivered another outstanding result. Expects exteriors volume growth between 7% and 11% and an Adjusted EBIT margin between 27% and 29% for the North America segment. JHX remains on track with its business transformation, from a big, small company to a small, big company.
• The a2 Milk Co. (A2M) -1.20% Appoints David Bortolussi to the role of Managing Director and CEO.
• Challenger (CGF) –7.60% Normalised profit down 8% to $507m vs consensus $510.2m vs guidance $500-550m. Normalised ROE 14.8% vs target 14.6%. Assets under management up 4% to $85.2bn vs year-ago $81.8m. No final dividend. In FY21, expects normalised profit between $390-440m vs consensus $442.8m.
• Coronado Global Resources (CRN) – H1 NPAT -US$123.2m vs year-ago US$214.3m and consensus -US$50.1m. Revenue US$713.7m vs year-ago US$1.23bn. Adjusted EBITDA US$34.9m vs year-ago US$405.4m and consensus US$58.2m. HY20 dividend suspended. Appoints Gerhard Ziems as Group CFO. Expects total saleable production for FY20 of 16.5 to 17m tonnes. Expects sales volumes to be higher than production as customer demand is met through existing inventory levels.
• Sydney Airport (SYD) -1.20% H1 NPAT -$51.8m vs consensus -$64m. Revenue $511m vs consensus $415.1m. EBITDA $300.4m vs year-ago $465.1m and consensus $290.4m. No distribution expected to be declared for 2020. Continued focus on controlling operating and capital expenditure. Preparing for domestic-led recovery. Launches $2bn entitlement offer at 456c. The offer price is the same for both institutional and retail security holders.
• Ampol (ALD) -0.61% To restart Lytton refinery; anticipates full production by October.
• Charter Hall Social Infrastructure REIT (CQE) +4.66% Full-year operating EPS 16.5c vs consensus 17c. Statutory NPAT $85.9m vs consensus $50.4m. Revenue $86.2m vs consensus $71.2m. There have been 347 properties valued in H2 of 2020 which has resulted in a 6% increase on June 2019 carrying values. There has been no material impact on valuations from COVID-19. Expects FY21 distribution of 15.0c.

ECONOMIC NEWS

• The number of payroll jobs nationwide remained steady through July (-0.1% while Victoria saw a fall, according to figures released by the ABS today.
• Around 40% of jobs lost in Victoria by mid-April had been regained by 25 June, but by the end of July this had reduced to 24%,” Mr Jarvis said.
• The Accommodation and food services and Arts and recreation services industries were the two most impacted by payroll job losses during the COVID-19 period. These industries saw the largest increases in payroll jobs since mid-April (26.6% and 18.2%), but remained 17.9% and 15.1% lower than mid-March.
• Payroll jobs worked by people aged under 20 increased 4.2% nationally through July.

• Between the week ending 14 March 2020 (the week Australia recorded its 100^th confirmed COVID-19 case) and the week ending 25 July 2020:
• Payroll jobs decreased by 4.5%
• Total wages decreased by 4.8%

NAB monthly business survey (conducted prior to stage 4 restrictions in Victoria).

• Confidence fell sharply in the month to -14 index points.
• Conditions rose 8pts to 0 index points – continuing the rebound seen in recent months.
• Business conditions saw improvement in July, which was broad-based across states. Outcomes across industries were more mixed, with services continuing to improve, albeit from a low base, while transport & utilities and construction weakened. Confidence saw a significant deterioration across all industries and in each state, except SA and WA.

COVID-19 NEWS

• Casino stocks rallied after China said it will resume issuing tourist visas for visitors to Macau.
• Philippine President Duterte has accepted Russia’s offer of its coronavirus vaccine, volunteering to take the first shot as a gesture of trust and gratitude.
• PM Johnson said it allocated GBP300m of funding to shore up hospital emergency services in England ahead of a potential winter resurgence in the pandemic.
• Finland will quarantine travellers from most of the world to halt the spread of Covid-19.
• Germany recorded 1,220 new infections in the 24 hours through Tuesday.
• It took six months to reach 10m cases and only 6 weeks to hit 20m cases. Doubled in six weeks. Let’s hope that does not continue.

BONDS

ASIAN NEWS

• Hong Kong media stock is up 1000% after the CEO and founding publisher was arrested by the Chinese authorities. Social media followers urged to buy the stock in a show of solidarity. Shame MSB CEO wasn’t arrested then. May have helped.

• China is back buying US beans rather than Brazilian ones.
• Singapore’s GDP fell a record 42.9% on an annualized basis in the second quarter from the previous three months, according to final estimates from the Ministry of Trade and Industry. The economy, which is already in a technical recession, is set to shrink 5% to 7% in 2020, compared with a previous official forecast of a 4% to 7% contraction, the ministry said.
• One of Tencent backed startups Waterdrop has raised US$200m to fund its expansion in healthcare crowdfunding. It values the business at US$2bn.

EUROPEAN NEWS

• European futures looking to open positively.
• Record low rates for a 10-year junk bond of below 3% for Ball Corporation junk.
• Kodak moment comes and goes as the stock drops like a rock after US government loan hits a problem on allegations of wrong doings.

And finally…

We were so poor when I was growing up we could only afford normal K for breakfast.

We were that poor we couldn’t even afford to pay attention.

When I was young, we were so poor the rainbows were black and white!

We were so poor we could not afford heating, so we would all huddle around a candle. When it got really cold my father would light it.

We were so poor we couldn’t afford tinsel for the Christmas tree we would sit grandad In front of it and throw pepper at him to make him sneeze.

We were so poor, my parents struggled to put food on the table, they were dwarfs.

 

Thanks you …try the burgers…

Clarence

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