The ASX 200 fell 70 to 6600 despite a valiant effort early but overrun with CV19 woes in the end. Cases down but venue and spread growing. Across the board selling even in miners which had no immunity despite the rising iron ore price. BHP fell 1.8%, RIO off 2.7% and FMG down 2.3% as Dalian futures fell around 4% from the highs. Other mining stocks also fell with gold miners down, NCM off 2.1% and NST falling 3.4%. Oil companies also in the doghouse as WPL dropped 3.1% and STO down 3.3%. The banks had a disappointing day with the BigBank Basket down to $.147.82 Insurers too came a cropper with QBE down 0.6%. Industrials under some pressure with WES off % though travel stocks could have been worse, SYD down 0.5%, FLT down 4.4% and WEB down 4.0%. In tech stocks, APT bucked the trend rising 1.0% whilst the index fell 0.7%. In corporate news,ORI down 1.0%, expects to see a return to EBIT growth in FY21. Voices concern over coal exports at AGM. AOF sees portfolio to increase in value by $4.7m or 0.7%. MFG down 0.3 on 10% Guzman y Gomes stake. TCL down 0.9% on CFO appointment. Weekly ANZ-Roy Morgan Consumer Sentiment down 2% with Sydney sentiment down 5.3% – the sharpest weekly drop since July. Retail trade for November: +7% vs consensus: +2%, to be up 13.2% over the year. 10-year bond yields at 0.95%, AUD down to 75.60c. Asian markets mixed as Japan falls o.49% and China up 0.11%. Dow Futures down 141 points.

Today’s Highlights

  • ASX 200 down 70 to 6600.  Selling gathers pace.
  • High 6665 Low 6585. One-way traffic but off lows.
  • Big Bank Basket down to $147.82
  • Dalian Iron ore futures dropping 4%.
  • All Tech down 0.7%
  • Dow Futures down 141 points.
  • Gold falls to AUD$2487
  • 10-year yields steady at 0.95%
  • AUD steady at 75.60c
  • Bitcoin slips back to US$22,848
  • Asian markets mixed as Japan falls o.49% and China up 0.11%.

MARCUS TODAY TEAM INSIGHTS

STRATEGY – We have gone Marcus Lite a little early today as the man himself has been snookered by some last-minute Xmas preparations. After the morning meeting we decided that we would cash in our run long travel stocks and trim the sails in energy companies. Travel is a confidence game and although cases are down, the news from Victoria is troublesome. We can always buy back in again but risks seem to be rising again and although we are not expecting a precipitous fall, having some cash seems prudent. READ MORE

HENRY’S TAKE – A good day yesterday with some changes to the portfolio and some BBOZ added just to be ultra cautious. We look at West Ham United’s theme song: ‘I’m forever blowing bubbles’. Bubbles in Bitcoin, bubbles in iron ore and bubbles in trading volumes in speculative stocks and IPOs. Not that bubbles cannot continue for some time, its just at some stage they burst. The hard bit is knowing when. Plus a look at some of the great lessons members have learnt from 2020 as they have posted on our FB page. READ MORE 

STOCKS

  • ERA +4.44% uranium back in fashion.
  • JMS +6.90% iron ore exposure and directors interests.
  • A2M +4.97% cream rising.
  • KAR +3.26% sellers thin.
  • BRN +3.17% trading halt awaiting material contract
  • CAN +11.11% first shipment to UK partner.
  • TSO +6.12% great intercepts.
  • LCK -9.68% turns into lots of hot air.
  • SVY -10.34% results from Cayley Lode.
  • WHK -9.38% down. Enthusiasm wanes.
  • EML -4.05% Euro lock down woes.
  • MSB -5.65% slide continues.
  • OCL -1.81% big fall very thin.
  • SFR -1.83% largest-ever single shipment of copper concentrate from DeGrussa.
  • SPL +0.98% nasal spray study due to kick off January.
  • Speculative Stock of the Day: Leaf Resources (LER) +65.52% blast from the past, returns to trade and company presentation.
  • Biggest Winners: JMS, A2M, ERA, ADN, KAR and BRN
  • Biggest Losers: AMI, SLR, HTA, RMS, SSM, MSB and GOR

TODAY

  • Woolworths (WOW) -1.18% Pushback from food distributors on Woolworths’ purchase of a controlling stake in PFD Food Services. Newswires report the CEO of Countrywide, Australia’s largest group of independently-owned wholesale distributors in the food service industry, sent a letter to suppliers to submit to the ACCC in opposition to the deal.
  • Macquarie Telecom Group (MAQ) -1.41% Expands debt facility by $50m to $190m to support data centre expansion.
  • Wattle Health Australia (WHA) – FY20 profit -$65.4m vs year-ago -$10.3m. Revenue $934K vs year-ago $887K. Income attributable to shareholders $46.3m vs year-ago $9.9m. Records a non-cash expense of $57.2m. The first 6 months of sales for FY21 are on track to match the sales of FY20. Wattle Health with the disposal of CBDG and the restructure of the Wattle Health business have reduced operating expenses to ~$3.5m per annum a reduction of ~60% on FY20. Organic and Natural skin care range, Little Innoscents, is enjoying growth in sales month on month with November achieving record sales, December currently on track to break November’s record.
  • Infratil’s (IFT) -1.90% Iberdrola well placed to acquire Infratil’s $1.2bn stake in Tilt Renewables.Iberdrola is reportedly seeking to raise its presence in the Australian market. Shell, BP, AGL Energy and Origin Energy named as other potential buyers of Tilt.
  • Transurban Group (TCL) -0.93% Appoint Michelle Jablko as CFO, effective 2021. Jablko is currently CFO of ANZ, having held this role since 2016.
  • Nickel Mines (NIC) -5.17% Completes retail entitlement offer raising $58m with take up rate of 65%.
  • Orica (ORI) -1.03% Expects to see a return to EBIT growth in FY21, weighted towards the second half. Notes it is Very concerned that all Australian exports of thermal and metallurgical coal to China are currently stopped.
  • Australian Unity Office Fund (AOF) +1.38% Expects portfolio to increase in value by $4.7m or 0.7% following preliminary valuations. Preliminary weighted average capitalisation rate tightened by 3bps to 6.03%.

ECONOMIC NEWS

  • Weekly ANZ-Roy Morgan Consumer Sentiment down 2% with Sydney sentiment down 5.3% – the sharpest weekly drop since July.
  • Preliminary retail trade for November: +7% vs consensus: +2%, to be up 13.2% over the year. Victoria saw a 21% rise, as retail stores experienced a full month of trade following the easing of restrictions. Excluding Victoria, retail sales rose 2.7%. ” Sales in November hit $31.6bn. It is the first time in the series that Australians have spent more than $31bn in just one month

BONDS

COVID – 19 NEWS

  • Malaysia has signed a deal with AstraZeneca Plc to secure 6.4m doses of the vaccine.
  • Mexico has recorded 254,625 more deaths, from all causes, than expected through late November.
  • All three airlines that fly from the U.K. to New York have agreed to test for Covid-19, according to Governor Andrew Cuomo’s office.
  • China’s north eastern city of Dalian locked down five residential districts and halted school as the coastal city has detected five confirmed cases in the most recent flare-up.
  • South Korea will close its ski resorts and tourist spots from Dec. 24 to Jan. 3.
  • California Governor Gavin Newsom said Monday the state could see more than 90,000 people hospitalised with Covid-19 by mid-January

ASIAN NEWS

  • Former Japanese Prime Minister Shinzo Abe was questioned by prosecutors looking into allegations political funds were improperly used to subsidize parties for voters

EUROPEAN AND US HEADLINES

  • Apple targeting autonomous cars by 2024.
  • Softbank launches a US$604m SPAC blank cheque shell.
  • EIA crude oil inventory report is due today
  • U.S. jobless claims, durables, personal income data comes tonight too.
  • US credit card applications tumble and those that do apply get knocked back.
  • Facebook and Google are set to team up to fight anti trust law suit. Is it just me that sees the irony.

And finally…..

I worry that the forthcoming lettuce shortage is just the tip of the iceberg.

I felt so pleased that a guy in a pub sold me a rare, antique map of the Sahara Desert for only 20 quid last night. This morning when I sobered up, I realised that it was a sheet of sandpaper…

Clarence

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