The ASX200 crashed 136 points to close the quarter at 5816 after a weak start and things only got worse after the great debate in the US. Dow futures turned turtle and flipped, to be down 300 after early gains. For the quarter, the ASX 200 was barely changed. Banks were once again in trouble and the sellers are back in charge after the squeeze last week, the Big Bank Basket dropped to $115.42 with CBA leading the falls down 2.2%. Other financials caught the disease with MFG down 2.4% and MQG down 2.3% with insurers also easier as QBE fell 2.0%. Big miners were not spared the sword today as BHP dropped 3.5% and RIO down 1.6% yet FMG managed a gain of 0.9%. Gold miners eased slightly, NCM down 1.7% and NST off 2.1%. Energy stocks were back in the doghouse, STO down 3.9% despite the greenish light for its Narrabri gas project, WPL dropped 4.9% and ORG slipped 4.9%. Losses in healthcare and industrials, TCL down 3.3% and CSL down 2.9%, WOW dropped 2.4% together with WES down 2.7%. In the tech sector, we saw selling take hold, APT down 2.2% and XRO off 0.6% leading to a 1.8% loss to the All Tech Index. On the positive front, CTD returned fresh from its entitlement issue to instos and soared 9.7% on a positive reception to its US takeover. WAF rose 5.4% on positive drilling results though A2M continued its declined as broker piled on with downgrades, down another 3.7%. SPL fared badly after returning from its placement, falling down 6.5%. In economic news, Private sector credit for August was flat vs consensus of a 0.1% fall. And Chinese PMI came in better than expected but not enough to arrest the slide. 10-year yield around 0.79% and the AUD at 71.19c. Asian markets mixed with Japan down 1.1% and China up 0.6%.

Today’s Highlights

  • ASX 200 smacked 136 points to 5816 as US futures flip on debate.
  • High 5938 Low 5816. Big volume.
  • For the September quarter the ASX 200 is down 82 points.
  • Big Bank Basket sees seller return down to $115.42
  • All Tech Index down by 1.79%
  • 22 trading days until the US election.
  • Dow Futures down 300 from early gains on debate.
  • Gold rises to AUD$2656
  • 10-year bond yield rise to 0.79%
  • AUD better at 71.19c
  • Bitcoin steady around $10747
  • Asian markets mixed with Japan down 1.1% and China up 0.6%

STOCKS

  • CTD +9.74% market loves deal.
  • PLS +3.17% lithium back in favour.
  • WAF +5.42% good drill results.
  • A2M -3.70% Wilsons slashes PT by 20%.
  • AYS -unchanged- completes sale of energy business.
  • PET suspended- directors resign.
  • BRN -13.51% more reality bites.
  • SPL -6.54% investor presentation.
  • CHN -3.33% profit taking.
  • PFT +12.50% FY accounts.
  • AMP -3.33% announces redundancies of around 20% in Capital and Wealth Management.
  • STO -3.94% green light for Narrabri. Now the capex comes.
  • ASX -3.57% pushes out date for CHESS upgrade.
  • MSB -2.12% sell off at close.
  • BNO -6.67% update on entitlement offer.
  • PLL -19.74% profit taking sets in.
  • 3DP -8.33% Slattery shine wears off a little.
  • 4DX +11.48% TGA approval comes early.
  • RCE +3.62% Murdoch Children’s Research Institute evaluates Recce 435.
  • Speculative Stock of the Day: Rarex (REE) +47.44% spectacular thick high-grade results from in-fill drilling at Cummins Range Rare earths project.
  • Biggest Winners: CTD, WAF, MAQ, SM1, PLS, ALK, UWL and TPW.
  • Biggest Losers: BRN, URW, SPL, PRN, BVS, S32, ECX, and SGM.

TODAY

  • Electro Optic Systems (EOS) -1.80% Completes contract negotiations with the Commonwealth of Australia for the acquisition of 251 Remote Weapon Systems (RWS). The contract is valued at over $94m. The 251 RWS systems will be integrated on to Bushmaster and Hawkei protected mobility vehicles. Forty RWS are scheduled for delivery in Q4 2020, with the remainder to be delivered in 2021.
  • Challenger (CGF) -2.05% CFO Andrew Tobin to leave the business in March 2021. Tobin has given six months’ notice and will continue in his role until a successor is appointed following a search process.
  • MMA Offshore (MRM) – Repeats FY guidance, expects operating EBITDA $30-35m (inclusive of the impacts of AASB 16). Notes 61% of forecast FY vessel revenue was under contract at the start of July. Targeting stronger and more diversified revenue growth in FY2022 and beyond.
  • CBA (CBA) -2.17% Has received ~$450m from AIA Group under the revised transaction path for the divestment of CBA’s Australian life insurance business. The additional proceeds result in a pro forma increase to the group’s Common Equity Tier 1 ratio of 8 basis points. As the earnings impact of the CommInsure Life divestment was largely recognised in FY20, the impact of the receipt of the additional proceeds on the group’s FY21 earnings is not material.
  • Jumbo Interactive (JIN) -1.42% Jumbo and Lotterywest to negotiate a platform and services agreement for up to 10 years. Jumbo will provide a “Powered by Jumbo” software platform to Lotterywest “White Labelled” with Lotterywest branding. Jumbo will receive a service fee for every customer transaction through the White Label platform. Three-year initial term with an option for a further three and four years (3+3+4) with extension options are at the absolute discretion of Lotterywest.
  • Sigma Healthcare (SIG) – Appoints Jackie Pearson as CFO effective immediately. Pearson was most recently executive general manager business transformation.
  • Corporate Travel Management (CTD) +9.74% Completes institutional entitlement offer, raising $262m at 1385c/share. Approximately 90% take-up by eligible shareholders.
  • ASX (ASX)-3.57% Reiterates outlook released at the end of August. The pressure on interest rates and margins continues to weigh on ASX’s ability to generate interest income from its own capital and from collateral balance. With the recent speculation of another rate cut, returns could fall further. The outlook for IPOs remains mixed as well as sector dependent. 1H20 looks more promising.

ECONOMIC NEWS

  • A whale is back. One single investor snapped up the entire $2bn AOFM 2030 bond that was sold today. $8bn worth of bids received.

COVID – 19 NEWS

  • Indian hospitals are struggling to get supplies of oxygen as infections rise dramatically.
  • Shares in Chongqing Zhifei Biologica rose after it won a government licence to produce a CV19 vaccine.
  • South Africa sees its jobless rise with worker numbers fall to the lowest level in more than 10 years. CV19 has resulted in 2.2m job losses.
  • The vast majority of the thousands of ventilators manufactured under an emergency U.K. program to treat Covid-19 patients have gone unused and are sitting in storage.

BONDS

ASIAN NEWS

  • In China, the manufacturing purchasing managers’ index in September rose to 51.5 from 51 a month earlier. The non-manufacturing gauge rose to 55.9 from August’s 55.2. That’s better than the median forecast and well above 50 which shows an improvement.
  • The construction PMI was above 60 for a third straight month, indicating that infrastructure spending is increasing. A separate indicator from Markit showed a slight slowdown for manufacturing companies, with the PMI dropping to 53 from 53.1.

EUROPEAN AND US HEADLINES

  • European markets showing small losses across the board.
  • UK  Q2 GDP falls 19.8% Q/Q versus forecasts of 20.4%
  • First US Presidential debate descends into a slanging match.
  • Disney to cut 28,000 jobs in US resorts. Blames California.
  • A whistleblower warned EY about Wirecard 4 years ago.
  • Palantir goes public in direct listing.
  • BlackRock launches a synthetic ETF after years of railing against them.
  • UK reports highest number of cases a day since start of CV19. Spain to outline new rules too.

And finally…

Aladdin has been banned from the magic carpet race.
Apparently he’s been using performance enhancing rug.

I tried to get into a trendy Sydney nightclub last night.
The doorman said to me,
“Sorry mate, you’ve had too many”.
I replied, “What, drinks?”
He said, “No, birthdays!”

Clarence

XXX