ASX 200 surges late to close up 19 to 5945 (0.3%). A good comeback from early losses as banks rallied and the Big Bank Basket rose to $120.49. CBA was up 1.0% and NAB rallied 1.5%. Miners too enjoyed a day in the sun as iron ore rallied with BHP up 2.4% and FMG up 2.05%. CSL 1.1% better on vaccine production news but the rest of the sector slightly easier. Oil stocks remain under pressure with WPL down 0.5% and STO down 0.75%. Industrials were also flat as SYD fell 2.2% and TCL down 2.8% on Melbourne lock down extensions and a stronger bond market. TLS had a rare green day today rising 1.4% whilst tech stocks were left on the top shelf with APT closing down 2.4% as new kid on the block LBY rose 45.4% on its first day of listing. The All Tech Index dropped 0.4%. In corporate news, MFG flat on its FUM update, funds above $100bn in August. VEA down 0.3% after mulling the shutdown of its Geelong refinery to curb operating losses. SHL lost 2.2%, trading ex-dividend as well. On the economic front, the Ai Group Australian services index fell to 43.5 in August from 44 in July. The ninth consecutive contraction, renewed Victorian restrictions in Melbourne weighing. Job advertisements lifted 1.6% in August to 1049,103, following an upwardly revised 19.1% jump in July. The 10-year yield up to 0.96%. AUD rises to 72.76c. In Asia, China and Japan were slightly easier with China slips 0.5% and Japan down 0.4%. Dow futures down 26 points.

Today’s Highlights

• ASX 200 up 19 to 5945.
• High 5959 Low 5870.
• Slow start to the week.
• Big Bank Basket rises to $120.49
• All Tech Index drops 0.4%.
• 38 trading days until the US election.
• Dow Futures down 26.
• Gold flat at AUD$2655
• 10-year bond yield down to 0.90%
• AUD rises to 72.76c
• Bitcoin down to $10183
• In Asia, China slips 0.5% and Japan down 0.4%

STOCKS

• NVX +16.57% punters are back. Battery day approaches?
• DEG +6.98% bulls back in charge.
• RED +3.08% going well.
• WEB +5.01% becoming a substantial shareholder.
• CRN +3.17% signs of life in coal stocks.
• PRN -3.45% taps bond market.
• MSB -5.45% change in substantial shareholder.
• TYR -2.62% business update.
• AMP -2.45% herd moves on.
• TCL -2.83% Melbourne lockdown continues.
• 5GN -7.04% capital raising weighs.
• SWF -7.38% Kryptonite takes its toll.
• SVY -4.81% second tranche placement complete.
• CLQ +27.08% capital structure update.
• Speculative Stock of the Day: Layby (LBY) +45.39% A Star is Born. Another BNPL IPO in this NZ and UK focused BNPL provider which raised money at 141c.
• Biggest Winners: NVX, BRN, MEZ, RBL, DEG, 360, TPW and VUK.
• Biggest Losers: MSB, IFL, NIC, PRN, ORA, ORG and IPH.

TODAY

• Mirvac (MGR) -0.95% CFO Shane Gannon to step down. MGR expects to appoint a new CFO by the end of 2020. Head of retail, Susan MacDonald will also leave the group at the end of the year.
• Polynovo (PNV) -2.27% Receives ~$250k grant from the Victorian government. Funds to support the purchase of equipment and the development of the hernia cleanroom which is in progress at the Port Melbourne facility.
• CSL (CSL) +1.10% Signs agreement with the Australian government to supply 51m doses of COVID-19 vaccine candidate V451. First doses scheduled from mid-2021. The University of Queensland is currently undertaking a Phase 1 clinical study on UQCSL V451 to assess safety and immunogenicity in healthy volunteers. Should the Phase 1 study prove to be successful towards the end of this year, CSL will take full responsibility for the subsequent Phase 2B/3 clinical trial, which is expected to commence in late 2020. An agreement has also been signed between CSL and AstraZeneca for the expected manufacture of approximately 30m doses of the Oxford University vaccine candidate AZD1222. The Australian Government will provide funding to support CSL’s readiness to manufacture AZD1222.
• St. Barbara (SBM) +0.30% Completes previously announced acquisition of Moose River Resources (MRRI). SBM subsidiary Atlantic Mining NS acquired the remaining ~93% of the issued capital in MRRI that it did not already own. The net consideration of $61m was funded from St Barbara’s existing cash reserves.
• Magellan Financial (MFG) -0.05%Total FUM at the end of August $100.87bn vs $98.53bn at the end of July.In August, experienced net inflows of $566m, which included net retail inflows of $208m and net institutional inflows of $358m.
• Viva Energy Group (VEA) -0.31% Is looking at options to address operating losses, including a full shutdown of its Geelong refining facility. Despite on-going restrictions in Victoria, the Retail business continues to show resilience, observes sales recovery in the other states and territories. Sales volumes in the Alliance network are holding at over 50m litres per week and the retail margin environment remains supportive. Commercial businesses (excluding Aviation) in Victoria remain relatively unaffected by the current restrictions. The Refining business continues to be hit by the global and local response to COVID-19. Key processing units are currently under maintenance and the refinery is operating at reduced production levels. The longer term outlook for the refining business remains very challenging given the considerable fall in global demand for oil products.
• 5G Networks (5GN) -7.04% Completes placement, raising $27.5m at 180c/share. The placement was downsized from $30m at 185c/share. As previously mentioned, founder Joe Demase sold 2.78m shares, representing 14.5% of his shareholding at 180c per share. Demase will remain 5GN’s largest shareholder with ~16.2m shares, equivalent to 15.3% of the ordinary shares on issue.

ECONOMIC NEWS

• The Ai Group Australian services index fell to 43.5 in August from 44 in July. The ninth consecutive contraction, renewed Victorian restrictions in Melbourne weighing.
• Job advertisements lifted 1.6% in August to 1049,103, following an upwardly revised 19.1% jump in July.

COVID – 19 NEWS

• India added the largest number of cases in a day with 90,802 recorded overnight Sunday.

BONDS

ASIAN NEWS

• China’s exports continued to expand in August. Exports rose 9.5% in dollar terms in August from a year earlier to $235.3 bn the third-highest month on record. Imports fell 2.1%.

• Chinese chip maker SMIC fell 20% plus after news US may potential blacklist the company.
• Samsung won a 7.9 trillion won (US$6.6 billion) order to provide fifth-generation wireless solutions to Verizon in the U.S. Huawei is still struggling a little.

• Softbank sinks 7% on reports it is the US tech whale in the options market.

EUROPEAN AND US HEADLINES

• European markets looking to open modestly higher as US markets closed.
• Novak Djokovic is out of the US Open after an incident with a US line judge.
• Aramco has cut October oil prices.
• Mnuchin says it is close to a deal with the Democrats to extend the funding of the US government. Stimulus anyone? Mike Pence says he won’t allow Democrats to use relief to bail out Democrat states.
• Sanofi vaccine could be priced as low as EUR10 a shot.

And finally…

A retired man purchased a home near a high school. He spent the first few weeks of his retirement in peace, then the new school year began.

One afternoon early into the first semester, three loud young boys came down his street, beating merrily on every bin they came across. They then did so the following day and the day after that, until finally the retiree decided it was time to take some action.

The next afternoon, he walked out to meet the boys as they banged their way down the street. Stopping them, he said: “You kids are a lot of fun. I used to do the same thing when I was your age. Will you do me a favour? I’ll give you each a dollar if you’ll promise to come around every day and do your thing”.

The boys were more than happy and continued to bang the bins. After a few days, the old man greeted the kids again, but this time he had a sad smile on his face.

“This recession’s really putting a big dent in my income,” he told them. “I’m going to have to cut it down to 50 cents a day to keep banging the bins.” The kids were obviously unimpressed but they accepted the reduction in payment and continued their afternoon activities.

A few days later, the man approached them again. “Look,” he said, “I haven’t received my payment yet, so I’m not going to be able to give you more than 25 cents. Will that be okay?”

“That’s it?” the ‘drum leader’ exclaimed. “If you think we’re going to waste our time beating these around for 25 cents each a day, you’re nuts! No way, mister. We quit!” And the man enjoyed peace and serenity for the rest of his days.

A man walks into a bar and orders a drink. The bartender gives the man his drink and the man asks “If I show you something crazy, would let me have free drinks for the rest of the night?”

The bartender thinks for a minute and then says “It would to be something spectacular to take that offer.” The man leans down and picks up a box and sets it on the bar. He opens the box and inside is a small piano man, who is only 1 foot tall, and a little piano. The piano man starts playing classical music like Beethoven and Chopin.

Once he finishes, the bartender is in utter disbelief. He tells the man “You can have free drinks for the rest of the night, but only if you tell where you got this.” The man says “In the alley way behind your bar, there is a Genie who is granting free wishes to everyone who wants them.” Elated, the bartender heads behind his bar to see if it was true.

A few minutes pass and out of the alleyway erupts a cacophony of quacking. The bartender rushes back into the bar and shuts his door against a wave of thousands of ducks. He manages to secure the door and says to the man “I think that the Genie is hard of hearing, because after I asked for a million bucks, these ducks appeared by the thousands.” The man chuckles and says “Did you really think I wished for a 12 inch pianist?”

Clarence

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