ASX 200 up another 109 points to 6450 as the vaccine rally continues. Dow futures more muted at 73 points up. Another straight out of the blocks move higher with a mid-morning wobble shrugged back off again. Banks were back in demand following CBA results, the Big Bank Basket rose to $135.78 with the insurers doing very well as 10-year bond yields going through 1%. Higher bond prices feed in to lower growth stock valuations in the models and we saw some selling in JBH on a broker downgrade falling 4.4% but no wholesale flogging of the retail sector unlike yesterday, neither did we see a huge rush into travel stocks, a far more muted day with FLT up 1.5% and WEB up 4.1%. Good to see a bounce back in some REITs like GMG that suffered yesterday up 4.6%, Industrials firmed with WOW up 1.6% and TCL up 4.1% for obvious reasons. The big miners were mixed with FMG softer though, falling 1.6%, BHP rose 2.3% on higher commodity prices and gold miners under pressure again, NCM down 1.0% and NST down 3.9%. Energy stocks continue to have a tiger put in their tank with WPL up 6.3% after an investor day and STO up 6.4%. Tech stocks firmed, XRO had a huge surge up 6.7% and APT rallied 3.1% with the All Tech Index up 2.2% on XRO’s move. In corporate news, AST rose 5.1% on its first-half results, profit coming in well ahead of consensus. CPU up 3.3%, notes performance in FY21 has tracked ahead of expectations. Guidance reaffirmed. ECX up 5.6% on its full-year results. Z1P up 1.7%, Quadpay acquires Sydney-based technology company Urge Holdings for US$6.1m. Westpac-Melbourne Institute Consumer Confidence Index lifted 2.5% to 107.7 in November. The 10-year bond yield knocking loudly in the door of 1% and the AUD steady at 73.10c. Asian markets mixed with Japan up 1.7% and China slipping 0.12% on tech slips.

Today’s Highlights

  • ASX 200 up 109 to 6450. Big volume day again.
  • High 6457 Low 6355. Big range again.
  • Big Bank Basket see huge rise to $135.78
  • All Tech up 2.2%
  • Dow Futures up 73.
  • Gold slips to AUD$2578
  • Huge day for 10-year bond yields up to a one month high at 0.98%
  • AUD rallies to 73.10c
  • Bitcoin consolidates at $15,314
  • Asian markets mixed with Japan up 1.7% and China slipping 0.12% on tech slips.

STOCKS

  • MAQ +2.41% investor update.
  • APT +3.07% BNPL regulations delayed for another two months.
  • SM1 -7.94% placement
  • JBH -4.39% post CV sell off. Macquarie downgrades.
  • AGG -4.70% WGX -4.17% gold slips again.
  • DMP +0.19% WES +0.34% Macquarie downgrades.
  • VUK +14.29% really? As the UK gets worse.
  • OSH +7.55% oil bounce.
  • XRO +6.66% squeezed higher. Having a devil of a time.
  • CGC +6.50% berries in demand.
  • AFG +6.38% record low rates driving housing.
  • 3DP +30.56% big run on a newsletter write up.
  • VUL +18.21% back in favour.
  • PLL +1.56% sampling program begins.
  • HVN -2.67% Shonky Award win.
  • WBT +10.75% winner, winner chicken dinner.
  • PTM +5.88% market gearing.
  • MSB +4.79% CV19 trials continue.
  • LSF +4.50% NTA gap closing.
  • Speculative Stock of the Day: Straker Translators (STG)+75.69% Strategic agreement with IBM. Extends one language to 55. Translation services now available in 55 languages.
  • Biggest Winners: VUK, TLX, WHC, OSH, BPT and XRO.
  • Biggest Losers: NTO, SM1, RMS, RED, AGG, AD8 and JBH.

TODAY

  • CBA (CBA) +2.76% Q1 cash NPAT $1.8bn, down 18% vs year ago.Loan impairment expense (LIE) $550m, or 28bps of average Gross Loans and Acceptances (GLAA). Consumer arrears continued to be insulated by loan repayment deferrals and government support initiatives through the quarter. At the end of October, ~46,000 home loans remained in deferral (balances $19bn) down from 125,000 loans (balances $49bn ) in June. Credit Card’s arrears improved in the quarter. Personal loans arrears were broadly flat over the quarter. Troublesome and Impaired Assets (TIA) were lower at $8.4bn, the movement mainly reflects lower home loan impairments due to ongoing COVID-19 support. Total credit provisions increased to $6.7bn, representing a coverage ratio of 1.81% to total credit risk-weighted assets (+11bpts).
  • AVITA Therapeutics (AVH) -2.13% Q1 revenue US$5.1m vs year-ago US$3.3m and consensus US$5.1m. Net profit –$10.2m vs year-ago -$3.6m. EPS US48c vs year-ago US19c. Cash US$65.8m at the end of September.
  • Zip Co (Z1P)+1.69%Quadpay has acquired Sydney-based technology company Urge Holdings, known for its fashion search engine The Urge as well as a “Shazam for fashion” app known as Shnap, for a purchase price of ~$6.1m.
  • Evans Dixon (ED1) – unchanged – Near term performance will be hit by structural changes in Funds Management, increased insurance costs and higher legal costs. Wealth – strong medium-term prospects, FY21 expected to be impacted by cost of ASIC proceedings. Funds – continue to expect softer core performance in FY21 as business model transitions, however strong unrealised gains on equity investments may benefit performance – this remains subject to change as revalued on a mark-to-market basis. E&P – deal pipeline strengthening into 2H FY21 as origination efforts gain traction in targeted sectors and COVID-19 impacts on market activity levels ease.
  • AusNet Services (AST) +5.08% H1 profit $225.7m vs year-ago $171.8m and consensus $164m. Revenue $1.04bn vs year-ago $1.02bn and consensus $1.08bn. Interim dividend declared 475c/share. On track to reach $1.5bn of contracted energy infrastructure assets by FY24. Reiterates guidance: Sees FY21 dividend of 9.0 – 9.5cps, 40% franked. Expects regulated asset base growth around 2-2.5% p.a. to FY24.
  • Computershare (CPU) +3.32% Financial year to date performance slightly ahead of expectations. Reaffirms FY guidance: Management EPS to be down by around 11% vs year ago. Sees EBIT ex margin income growth of ~10% vs year ago. Expects seasonality split of H1/H2 around 42%/58% vs prior 40%/60%.
  • Eclipx Group (ECX) +5.62% Full-year core profit $47.5m vs year-ago $46.5m.Revenue $674.2m vs year-ago $709m. Group EBITDA $77.4m vs year-ago $59.5m.
  • Woodside Petroleum (WPL) +6.31% Expects full-year production between 99-101MMboe. Sees FY21 investment expenditure in the range of US$2,100 -2,300m. Total expenditure guidance ~US$2,900m, increase primarily resulting from additional Sangomar interest. Unit production cost increase of ~US40c/boe, attributable to COVID-19 and related events.

ECONOMIC NEWS

  • Westpac-Melbourne Institute Consumer Confidence Index lifted 2.5% to 107.7 in November.
  • The “time to buy a dwelling” index surged 8% from 122.2 to 132 – the highest reading since November 2013. The index is 11% above its level from a year ago.
  • NSW recorded a 9.4% jump in buying intentions to 131.6 points. Queensland was up 11.7% to 132.4 points, while even Victoria saw a solid recovery, up 5.2% to 124.2 points.
  • Westpac’s house Price Expectations survey also strengthened. It jumped 12% to be only 7.3% below its level in March and 5.5% above its long-term average.
  • RBNZ kept rates on hold.
  • Tasmania will open its borders to Victoria from November 27th.

COVID – 19 NEWS

  • Hong Kong will exempt some of its residents arriving from Guangdong from a 14-day quarantine beginning Nov. 23.
  • Japan recorded a total of 1,287 cases on Tuesday, according to a tally by local broadcaster NHK, the second-highest day of infections.
  • The U.S. had a record 61,964 patients currently in hospital. Current hospitalisations have climbed at an average of 1,661 patients per day in the past week.

BONDS

ASIAN NEWS

  • Chinese technology shares tumbled for a second day after Beijing clamped down on the internet industry. Hang Seng Tech index has slumped almost 10% in two days.
  • The new regulations for the internet industry signal a “further tightening” of the online economy.
  • Singles Day in Asia. China retail sales sank 7% this year as GDP growth rebounded. Sales totaled 372.3 billion yuan ($56.3 billion) after just the first 30 minutes on Nov. 11.

EUROPEAN AND US HEADLINES

  • Mike Pompeo says Trump administration is not finished yet with China.
  • Apple changes its Macs now powered with own processor.
  • The dash for cash begins as American Airlines, Carnival and Lufthansa kicks things off with capital raises.
  • EU accuses Amazon of breeching antitrust rules.

And finally,

Clarence

xxxx

Lest We Forget