The ASX 200 dropped 40 points to 6643 on a lacklustre day. Dow futures ease 9 points. A tale of two cities, or two themes, iron ore versus vaccine trial failure. CSL down 3.2% taking 14 points off the index. Banks too saw sellers with CBA down 0.8% and the Big Bank Basket slipping back from recent highs to $148.61. Elsewhere tech did well with XRO up 1.3% and APT rising 5.0%. The All–Tech Index rose 1.0%. In energy stocks, we saw good solid gains in WPL and STO up 2.5% and 2.8% respectively. Big miners in the spotlight on iron ore at record highs in AUD terms. BHP up 0.8% and FMG gaining 1.9%. Industrials slipped lower with WES off 1.1% and BXB down 3.8%. Retailers mixed with KGN up 0.9%, JBH down 1.5%. In corporate news, CSL pulled the pin on its UQ vaccine trial. IGO up 25.3% after completing its capital raising. Funds will be used to purchase a 49% interest in Tianqi Lithium Energy Australia. The big four banks are all down between 0.1% and 1%. LYC down 4.2% after UBS downgrade to neutralL. Z1P up 1.9% enters into a partnership with Facebook. APT up 5.0%. APE up 3.0% after announcing FY20 underlying profit guidance between $195-205m. OML up 3.4% after a guidance update. AHY up 4.9% following a 126c bid from Essity. UMG down 1.6% trading ex-dividend. Nothing on the economic front today, AUD going well up to 75.65c. 10-year bond yields steady at 0.98%. Asian markets sloppy with Japan down 0.6% and China down 1.3%.

Today’s Highlights

  • ASX 200 down 40 points 6643.
  • High 6688 Low 6632. Wishy washy. Waiting.
  • ASX 200 up 8 points for the week.
  • Big Bank Basket up to $148.61
  • Iron ore still going strong.
  • All Tech up 1.01%
  • Dow Futures down 9 points
  • Gold lower at AUD$2428
  • 10-year yields slip to 0.98%
  • AUD better at 75.65c
  • Bitcoin steady at $17,935
  • Asian markets mixed with Japan up 1.2% and China easing slightly by 0.12%.

STOCKS

  • IGO +25.32% market cheers Tianqi deal.
  • YAL +8.94% WHC +6.62% coal is back
  • WSA +5.74% nickel shorts squeezed.
  • SGF -3.73% sellers back.
  • PLS +4.17% trading halt pending outcome of Altura creditors meeting.
  • LOV -7.22% in love one day out of love the next.
  • ABY –4.29% not such a beauty today.
  • PDL -3.78% AGM addresses.
  • LYC -4.24% broker says take profits.
  • SO4 -15.62% Investor presentation and back to the boards.
  • SYR -10.84% capital raising weighs.
  • CPH +21.43% back on a high.
  • APX -2.90% Wilsons slashes valuation on downgrade.
  • DOC +22.86% what’s up. IPO still finding favour.
  • APT +5.02% Canadian partnerships.
  • WBT +7.65% signs of life.
  • FMG +1.95% Tropical low heading to Port Hedland.
  • WBC -0.20% pledges return
  • VUL +22.55% EU regulation on clean batteries and CO2 footprint.
  • MNS +8.11% off days high.
  • AHY +4.88% Swedes offer not to be sneezed at.
  • Speculative Stock of the Day: Creso Pharma (CPH) +21.43% HoA to unlock Australian market. Social media trading special at the moment.
  • Biggest Winners: IGO, TLX, YAL, WGX, ASM, WHC, ERA, NTO and WSA.
  • Biggest Losers: LOV, AND, VUL, NWH, ABY, HUM and LYC.

TODAY

  • CSL (CSL) -3.24% CSL/University of Queensland COVID-19 candidate will not progress to Phase 2/3 clinical trials after testing showed anitbodies interfered with certain HIV diagnostic assays. CSL does not anticipate this announcement will have any impact on previously provided financial guidance for FY221.
  • Rio Tinto (RIO) +0.53% The legislative response to Rio’s incident at Juukan Gorge is expected to create more stringent project approval processes that may impact expansion plans. Goldman sees downside risk to RIO’s 2021 iron ore shipping forecast as the miner is more exposed to the need for approvals as well as renegotiations and potential delays.
  • Asaleo Care (AHY) +4.88% Essity AB makes non-binding indicative proposal to acquire additional shares in Asaleo at 126c/share. Essity is the largest shareholder of Asaleo, currently holding a 36.2% interest.
  • oOh!media (OML) +3.45% Strong recovery in key Out of Home audiences post COVID-19 lockdown. Expects FY20 revenue $420-430m vs consensus $444.4m. Performance has been tracking towards 2019 levels in its largest revenue and audience reach formats of Road, Retail and Street Furniture as a function of audience restrictions being lifted. Operating cost savings (excluding JobKeeper) in excess of $15m for FY20. FY20 Capital Expenditure anticipated to be below $20m.
  • Zip Co. (Z1P) +1.94% Announce partnership with Facebook to enable Australian businesses to use Zip Business to pay for advertising.
  • ALE Property Group (LEP) +4.48% Expects FY21 distribution of 21.5cps, up 3% vs year ago.
  • HomeCo Daily Needs REIT (HDN) – unchanged -To acquire Bunnings Seven Hills, NSW for $56.0m. The acquisition is proposed to be debt-funded and is expected to be immediately accretive to FY21 FFO per unit. Gearing will remain within the target 30-40% range post-transaction. Completion is subject to Bunnings not exercising its pre-emptive right to acquire the asset from the vendor on the terms agreed with HDN.
  • Eagers Automotive (APE) +3.05% Expects FY20 underlying operating profit between $195-205m vs year-ago $100.4m. The guidance reflects the first full year of trading for the enlarged company following the transformative merger with Automotive Holdings Group (AHG)

ECONOMIC NEWS

  • Casual workers accounted for around two-thirds of people who lost a job early in the COVID-19 period, according to new annual data and analysis of quarterly Labour Force data released today by the Australian Bureau of Statistics (ABS).
  • Employment in casual jobs fell from 2.6m to 2.1m between February and May 2020.
  • Between August 2019 and August 2020, the number of people working as full-time independent contractors fell 9.4%, from 670,000 to 610,000. In contrast, employees working on a fixed-term contract increased 6.1%, from 390,000 to 410,000.

BONDS

  • The market value of the Bloomberg Barclays Global Negative Yielding Debt Index rose to $18.04 trillion on Thursday, the highest level ever recorded.
  • 27% of the world’s investment-grade debt is now sub-zero.

COVID – 19 NEWS

  • South Korea reported 689 new coronavirus cases in 24 hours versus 682 a day earlier.
  • A Food and Drug Administration advisory panel voted 17 to 4 on Thursday that the benefits of the the vaccine by Pfizer Inc. and BioNTech SE outweigh the risks for use in people ages 16 and older.
  • New York’s new cases declined to 10,178 from 10,600 a day earlier.
  • Virginia Governor Ralph Northam announced a “modified stay-at-home order” that requires people to stay at home from midnight to 5 am, with exemptions including grocery shopping, work travel and medical emergencies.
  • Theatres, museums and cinemas, along with sports facilities, will remain shut in France instead of reopening as planned next week.
  • Stockholm is almost out of ICU beds. Capacity of 99% reached this week.

ASIAN NEWS

  • Xi is scheduled to speak at the virtual Climate Ambition Summit on Saturday.
  • China’s aviation regulator is recommending cabin crew on charter flights to high-risk Covid-19 destinations wear nappies and avoid the toilets to lessen the risk of CV19 infections.

EUROPEAN AND US HEADLINES

  • The FCC has moved against China Telecom and Huawei.
  • Boris says Brace! Brace! Brace! for no deal Brexit. Sunday is the deadline.
  • FDA decision imminent.
  • US deaths top 3000 a day
  • Joe Biden names Susan Rice to lead policy council.
  • Ferrari chief Camilleri will retire immediately.
  • UK track and trace system falling short.
  • Disney forecasts tripling of new subscribers.
  • US will impose sanctions on Turkey after Russian defence buys.
  • Trump gets Israel and Morocco to talk nice to each other.

Have a great weekend

Clarence

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