The ASX drops 45 points to 6185 (0.7%) after a tentative start. Dow Futures up 85 on stimulus hopes. RBA minutes seemed to kick the market in the tummy and down it went. As usual the Big Bank Basket led, and the rest followed. The basket fell to $126.16 with other financials also in the doghouse, MQG down 0.9%, QBE down 3.0% and NAB down 1.1%. Big miners too their cue from BHP after its quarterly update and Olympic dam news, falling 1.6% and RIO down 1.5% though FMG bucked the trend up 0.6%. Healthcare mixed CSL down 1.0% and FPH up 1.0%. Plenty happening in the tech stocks and fintech especially, APT hit another all-time high up 4.5%, Z1P fell 1.4% after trying hard to mimic them and XRO pushed inevitably higher by 0.5%. The All Tech Index rose 1.13%. Industrials were red but not by much. TCL rose as Melbourne too to the roads, up 0.2%. Plenty of corporate news today, COH up 2.3%, Q1 cochlear implant constant currency revenue down 6% vs year ago. IEL down 7.15% on its AGM update. AX1 up 2.0%, plans to open 30 to 50 new stores next year. PPT down 2.0%, Q1 assets under Management (AUM) of $29.0bn, up 2% due to mark-to-market and positive net inflows. TAH up 0.9%, Q1 revenues down 5.7% vs year ago. ORG off 1.8%, reaffirms FY21 guidance at AGM. CTD down 0.5%, completes retail portion of entitlement offer raising $113m at 1385c/share at a take-up rate of 81.2%. SGP off 0.7%, though seeing strength in residential. The RBA’s Kent offered no further guidance on the central bank’s thinking with regard to QE. Said the RBA has provided more stimulus than during the GFC. In economic news, RBA meeting minutes concluded the recovery would be “slow and uneven” as it considered other central bank’s use of bond buying to keep yields at very low rates. ANZ-Roy Morgan Weekly Consumer Confidence lifted 0.4% to 98.1. The 10-year yield steady at 0.74% and AUD steady. In Asia, mixed fortunes again, japan down 0.5% and China up 0.2%

Today’s Highlights

  • ASX 200 down 45 to 6185. Below average volume.
  • High 6241 Low 6181 Same range as Friday and yesterday.
  • Big Bank Basket falls to $126.16
  • All Tech Index up 1.13%
  • 9 trading days until the US election.
  • Dow Futures up 87 on stimulus hopes. Again.
  • Gold rallies to AUD$2698
  • 10-year bond yield steady at 0.74%
  • AUD falls to 70.45c
  • Bitcoin firms to US$11,735
  • Asian markets mixed with Japan down 0.5% and China up 0.2%

STOCKS

  • DDR +8.29% Q3 update and presentation.
  • APT +4.51% WBC -1.44% tie up on banking app.
  • MSB +5.26% buyers return.
  • BTH +5.28% presentation.
  • URW +3.88% committed to RESET plan.
  • BRN -15.38% investor presentation.
  • IEL -7.15% business update.
  • TYR -5.36% ceasing to be a substantial shareholder.
  • SDG +46.62% man with a plan.
  • AVA +12.84% rally continues.
  • RDC +6.98% pubs doing better than expected.
  • WBT +22.50% chip moves with US M&A.
  • KLL +16.13% rare day in the sunshine.
  • BHP -1.64% Olympic Dam update and quarterly results.
  • WHK -8.57% down on Supreme court action.
  • TLS -1.75% under pressure as rivals target low cost mobile.
  • CWN +1.21% chair concedes money laundering by ‘ineptitude’. Good defence.
  • Speculative Stock of the Day: Resource and En Group (REZ) +228.12% Big volume on high grade find at Gigante Grande Peak 1m@76.4g/t Name says it all really.
  • Biggest Winners:  DDR, CRN, BTH, MSB, APT, MMS and EML.
  • Biggest Losers: BRN, LTR, IEL, PRU, TYR, MAH, MND and CDV.

TODAY

  • Afterpay (APT) +4.51% and Westpac (WBC) -1.44% Enter a partnership with APT to offer savings accounts and cashflow tools to WBC customers. APT CEO Anthony Eisen had this to say, “the introduction of savings accounts and budgeting tools offers new customer benefits that continue to build on our core principle of encouraging responsible spending and enabling financial wellness. In deepening our relationship with our customers we will gather greater insights into how they prefer to manage their finances and better understand their savings goals. This will allow us to assist them to budget more effectively and avoid debt traps.”
  • BHP Group (BHP) – 1.64%Q1 petroleum production 27MMboe vs consensus 25.7MMboe. Copper production 413kt vs consensus 382.3kt, iron ore production 66Mt vs consensus 63.9Mt. Major projects under development in petroleum, copper and iron ore are tracking well. CEO comments, “while our copper operations in South America continue to be impacted by COVID-19 preventative measures, we achieved strong concentrator throughput at Escondida and expect first production from the Spence Growth Option before the end of March 2021. In Australia, Olympic Dam delivered its best quarterly production in the past five years and we are on track for first production from South Flank in the middle of the 2021 calendar year. In petroleum, we have entered an agreement to increase our interest in the tier one Shenzi asset while delivering first production from Atlantis Phase 3 ahead of schedule and within budget.” Production guidance for FY21 unchanged, energy coal forecast of 22-24mt under review.
  • McMillan Shakespeare (MMS) -3.96% ObservesCOVID-19 was a sharp and severe impact though recovery continues, increasing activity across all segments. Notes continued progress on strategic initiatives which include Digital transformation and Warehouse. Novated performance Q1, new sales up despite new car sales down 21% on PCP. Yield returning to pre COVID-19 levels as a percentage of refinanced leases reduce. Customer & earnings growth in Plan Partners continues. UK restructure progressing.
  • Perseus Mining (PRU) -5.43% Q1 gold production of 68,772oz at AISC US$964/oz. September quarter gold sales 60,4417oz at an average sale price of US$1,595/oz. Development of Yaouré remains on schedule to achieve the stretch target of pouring first gold in late December 2020.
  • Sydney Airport (SYD) +1.01% September traffic down 96.4% vs year ago, a 0.1% improvement on August numbers. Domestic down 95.7% to 98K passengers. International down 97.5% to 34K passengers.
  • IDP Education (IEL) -7.15% Notes ~70% of IDP’s IELTS network capacity has been reinstated. All student placement offices (excl Melbourne) have reopened. English Language Teaching schools have reopened in Cambodia and Vietnam. H1 FY21 student placement volumes for UK and Canada expected to be lower than pcp but notes an opportunity exists for a rebound in H2. For student placement, while applied volumes are down 22% for Q1 compared with last year, observes students are largely holding on to their study goals.
  • Accent Group (AX1) +1.96% In FY21, the company will continue to open and renew store leases where its targeted return on investment can be achieved, taking into account the shift to the digital channel and projected lower foot traffic in shopping centres. Plans to open 30 to 50 new stores next year across Skechers, Platypus, Hype DC, Dr Martens, Vans, Merrell, CAT and The Trybe. The forward sales pipeline for wholesale is strong with Skechers, Vans and Dr Martens all completing record sell-ins for the second half of FY21.
  • Perpetual (PPT) -2.03% Q1 assets under Management (AUM) of $29.0bn, up 2% due to mark-to-market and positive net inflows. Barrow Hanley acquisition on track for completion by November. Continued momentum from the adviser growth strategy in Perpetual Private with Funds under Advice of $14.6bn up 2% and, with $0.2bn positive net inflows over the quarter. Perpetual Corporate Trust Funds under Administration of $927.8bn, down 1%, but continues to win new business in Managed Fund Services and Data and Analytics solutions, with an improving pipeline in Debt Market Services.
  • Lovisa Holdings (LOV) -0.34% Global comparable store sales for the 16 weeks since the end of FY20 were down 10.2%, with a continuation of the improving trend seen in the first 8 weeks of the financial year. Currently, 449 stores in the global network, with 14 net new stores opened since the end of FY20. Only 30 stores in metropolitan Melbourne remaining closed, due to re-open on 1st November. Australia and New Zealand continue to be its best-performing regions. Online sales up 400% on last year for the 16 weeks of the financial year to date, continuing the momentum seen through of FY20 and the first 8 weeks of FY21.
  • Cochlear (COH) +2.30% Q1 cochlear implant constant currency revenue down 6% vs year ago. Unit volumes declined by 14% with developed markets growing low single-digits while emerging markets were down around 40%. Services revenue continues to recover with Q1 CC revenue 14% vs year ago. Expects to benefit from the recently announced changes to the R&D tax concession.
  • Tabcorp (TAH) +0.88% Q1 revenues down 5.7% vs year ago. Lotteries & Keno revenues down 6.9% vs year ago, which had strong jackpot sequences. Wagering & Media revenues up 2.9% vs year ago, despite the decline in retail and reduced net yields. Gaming Services revenues down 55.2% vs year ago, impacted by the closure of licensed venues, particularly in Victoria.
  • Origin Energy (ORG) -1.76% CEO reaffirms FY21 guidance at AGM. Energy markets underlying EBITDA expected in the range of $1.15-A$1.3bn. APLNG production forecasts between 650-680PJ with capex of $420-470m.
  • Oil Search (OSH) -0.35% Q3 production 7.30 Mboe/d vs quarter-ago 7.29 Mboe/d. Total sales (mmboe) 7.55 vs quarter-ago 6.79. Total revenue $189.0m vs quarter-ago $266.2m. Discussions are also ongoing between all parties on progressing LNG expansion opportunities in PNG. This coincides with a strengthening in demand and a potential improvement in the LNG price outlook, despite the COVID-19 impact on global energy and LNG demand pushing back the demand window to around 2027. In FY20, sees investment expenditure $390-460m vs prior guidance of $440-530m, following further reductions in exploration activities and rephasing of FEED activities in Alaska.
  • Corporate Travel Management (CTD) -0.46% Completes retail portion of entitlement offer raising $113m at 1385c/share at a take-up rate of 81.2%.
  • Stockland (SGP) -0.73% FY21 funds from operations and distribution guidance remain withdrawn. In residential, achieved the highest quarterly net sales in over three years. In retirement living, observed strong sales (excluding Victoria). Saw a recovery in retail, rent collection significantly improved in Q1. Workplace and Logistics maintained solid operational metrics and rent collection.
  • Bapcor (BAP) -1.21% Unaudited Q1 revenue up 27% vs year ago. Burson Trade revenue up 10% and same-store sales up 7.7% vs year ago (up 17% excluding Victoria). New Zealand revenue up 6%, same-store sales up 4% vs year ago. Retail revenue up 47% vs year ago. Autobarn same-store sales up 36%. Anticipate a strong first half – however, 2nd half is unclear. Chairman Andrew Harrison to retire following the release of the HY results next February. Margie Haseltine to take over.

ECONOMIC DATA

  • ANZ-Roy Morgan Weekly Consumer Confidence lifted 0.4% to 98.1. iIts seventh-straight weekly gain. Confidence has lifted in nine of the past ten-weeks, although still below the long-run average of 112.6. A strong rise of 5.8 per cent in ‘time to buy a household item’ supported the index, with aggregate financial and economic conditions easing last week.

RBA Minutes in full click here.

  • The recovery would be “slow and uneven” as it considered other central bank’s use of bond buying to keep yields at very low rates.
  • The minutes also showed members also discussed how much traction further monetary easing might obtain in terms of better economic outcomes.
  • The board concluded that further easing would help to reduce financial stability risks by strengthening the economy and private sector balance sheets, thereby lowering the number of non-performing loans.
  • On balance, the Board thought it likely that there were greater financial stability benefits from a stronger economy, while acknowledging that risks in asset markets had to be closely monitored.
  • Given the higher level of uncertainty about inflation dynamics in the current economic environment, the Board agreed to place more weight on actual, not forecast, inflation in its decision-making.

COVID – 19 NEWS

  • Japan and China will agree to resume business travel between the countries as soon as this week.
  • Wales is closed. Ireland imposed some of the most sweeping pandemic restrictions in Europe. Non-essential stores, bars and restaurants will close their doors for at least six weeks, and travel will be further restricted, with people told to stay within 5km from home.
  • Italy’s coronavirus cases declined on Monday, falling to 9,338, compared with a daily record of 11,705 the previous day.
  • Almost one-fourth of all hospital beds in the El Paso, Texas, area are occupied by virus patients and the region with almost 1 million residents has just 16 intensive-care beds available, state health department data showed.
  • US CDC issues call for masks on airplanes and trains.

BONDS

ASIAN NEWS

  • Goldman Sachs is set to pay a US$2bn fine to the US DOJ for its part in the 1MDB scandal. In all, Goldman Sachs may pay roughly US$5bn once accords with Malaysia, the Justice Department and other agencies are tallied together.
  • China may be recovering in most places, but hotels and restaurants are still sadly lagging behind. Output in the sector fell 5.1% from a year ago.

EUROPEAN AND US HEADLINES

  • European futures showing a slightly positive start.
  • The final Presidential debate takes place Thursday night, and the mute button could be the star of the show.
  • Who has the best pension system? Holland and Denmark top the polls.
  • OPEC Plus meeting today.
  • Trump calls Dr.Fauci one of the idiots.
  • Intel to sell Nand memory unit to SK Hynix for US$9bn.
  • UK and EU negotiators now holding talks on text. Think they must mean the text of the agreement. At least I hope so. LOL. BRB. XOXO.

And finally…

A lady comes home from her doctor’s appointment grinning from ear to ear. Her husband asks, “Why are you so happy?” The wife says, “The doctor told me that for a forty-five year old woman, I have the breasts of a eighteen year old.” “Oh yeah?” quipped her husband, “What did he say about your forty-five year old ass?” She said, “Your name never came up in the conversation.”

There was an elderly couple who in their old age noticed that they were getting a lot more forgetful, so they decided to go to the doctor.

The doctor told them that they should start writing things down so they don’t forget. They went home and the old lady told her husband to get her a bowl of ice cream. “You might want to write it down,” she said.

The husband said, “No, I can remember that you want a bowl of ice cream.” She then told her husband she wanted a bowl of ice cream with whipped cream. “Write it down,” she told him, and again he said, “No, no, I can remember: you want a bowl of ice cream with whipped cream.”

Then the old lady said she wants a bowl of ice cream with whipped cream and a cherry on top. “Write it down,” she told her husband and again he said, “No, I got it. You want a bowl of ice cream with whipped cream and a cherry on top.”

So he goes to get the ice cream and spends an unusually long time in the kitchen, over 30 minutes. He comes out to his wife and hands her a plate of eggs and bacon.

The old wife stares at the plate for a moment, then looks at her husband and asks, “Where’s the toast?”

Clarence

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