The ASX fell 61 to 6697 (0.9%). Dow Futures down 177 points. After a lacklustre start the market kicked down as US futures fell. Across the board selling as the 10-year yield rose again to 1.10%. Banks slopped about with the Big Bank Basket down to $152.51 and minor players slipped as MQG dropped 0.67% whilst insurers were becalmed. Resources slipped on the gold price drops reminding investors of the fickle hand of commodity prices. BHP down 0.4% and FMG off 0.5%. Energy stocks held and in places firmed as STO rose 3.1% and WPL up 2.6% on higher oil and LNG pricing due to the cold in Asia. Gold miners buried on bullion weakness witrh NCM down 3.5% and EVN off 4.8%. In the industrials, CSL fell again by 1.5% and defensive bond proxies fell with TCL off 1.9% and WES off 0.9% with WOW down 1.5%. Tech dented with XRO off 4.7% and APT down 1.7%, APX down 4.0% and NXT down 2.0%. In corporate news, SPT up 8.9% after signing a deal with Google in Japan. AYS down 0.7%, denies media speculation of an offer from RAMCap. SSG up 9.43% after updating guidance, sees first-half profit almost doubling on FY20. QBE down 1.0% after finalising its insurance program. On the economic front, Melbourne Institute inflation gauge for December: Headline +0.5% vs forecasts +0.3%, to be up 1.5% on a year ago. Retail sales for November up 7.1%, some economists had forecast a 7% rise. Black Friday and Cyber weekend sales helping the number. Asian markets quiet with China unchanged whilst Japan is closed today for a holiday.

Today’s Highlights

• ASX 200 down 61 points to 6697
• High 6761 Low 6689.
• Big Bank Basket down to $152.51
• All Tech down 1.7%
• Dow Futures down 177 points.
• Gold falls to AUD$2372
• 10-year yield lifts to 1.10%
• AUD down to 77.05c
• Bitcoin drifts to $35618.
• Japan closed for a holiday with China flat.

STOCKS

• MSB +14.29% promising trial results.
• AEF +6.76% bounce continues.
• BRN +6.84% cleansing notice.
• STX +1.54% Project Haber development plans.
• WGX -8.65% WAF -7.48% PRU -8.08%% gold miners under pressure.
• SVL -10.20% follows gold lower.
• SLX -12.83% GLE restructure progress.
• VUL +23.51% huge run then halt ahead of update.
• WBT +8.99% Appendix 2A
• SPT +8.88% Google deal.
• QBE -1.05% confident of margin expansion.
• XRO -4.68% tech under pressure.
• TCL -1.88% bond yields hurting sentiment.
• STO +3.15% WPL +2.62% LNG price squeeze in Asia.
• Speculative Stock of the Day: Sayona Mining (SYA) +64.29% PLL announces a strategic investment.
• Biggest Winners: MSB, OMH, ADSH, BRN, CSX and AEF.
• Biggest Losers: ASM, ALK, WGX, ERA, PRU, WAF and CHN..

TODAY

• Magellan Financial Group (MFG) +1.38% Funds under management (FUM) at the end of December of $101.37bn vs month-ago $103bn.Recorded net inflows of $579m in December. To pay distributions (net of reinvestment) of ~$132m in January, which will be reflected in the FUM figures in next month.
• Splitit Payments (SPT) +8.88% Signs agreement to support Google’s instalment payment offers in the Google Store, Japan, for the purchase of the new Pixel 5 mobile phone, Nest products and Chromecast streaming devices.
• Shaver Shop Group (SSG) +11.32% Expects first-half profit between $13.5-14.0m vs year-ago $7.6m and consensus $14m.Q2 FY21 sales +12.4% in total and +13.7% on a like for like basis. Online sales growth +64.7% in Q2. Gross profit margin is expected to increase more than 200 bps across H1 FY21.
• Amaysim Australia (AYS) -0.67% Contrary to comments in the media, amaysim’s Board of Directors has not received a formal and fulsome proposal from RAMCap. The board recommends shareholders accept the WAM offer in the absence of a superior proposal.
• Viva Leisure (VVA) -2.73% To acquire six Pinnacle Health Clubs in Victoria for $6.05-6.25m.Transaction to be funded using 50% debt and 50% equity from recent capital raise. A minimum of 6,500 members are to be acquired. The acquisition lifts Viva Leisure’s presence in Victoria from 8 locations to 14 locations.
• QBE (QBE) –1.05% Key features and changes to QBE’s 2021 reinsurance program: Main catastrophe tower increased to $3.4bn from $3.3bn. North America peak catastrophe retention of $200m (2020: initially $400m but reduced to $150m in April as part of COVID-19 de-risking initiatives). US and Australian non-peak catastrophe retention of $175m from $125m in 2020, while retention for all other non-peak perils is unchanged at $100m. Adds, on like-for-like basis, the probability of exceeding 2021 catastrophe allowance is lower than in 2020.

ECONOMIC NEWS

• Melbourne Institute inflation gauge for December: Headline +0.5% vs forecsts +0.3%, to be up 1.5% on a year ago. Trimmed mean +0.1% to be up 0.4% on a year ago.
• Retail sales for November up 7.1%, some economists had forecast a 7% rise. Black Friday and Cyber weekend sales helping the measure.

BONDS

COVID – 19 NEWS

• The Philippines signed agreements for 55 million doses of coronavirus vaccines.
• South Korea reported 451 new coronavirus cases over the past 24 hours, down from 665 the previous day.
• In Canada, Ontario has warned the health system is “on the brink of being overwhelmed.”
• Covid-19 cases in Brazil surpassed 8.1m with the addition of almost 30,000 cases on Sunday, according to Health Ministry data. The death toll increased by 469 to 203,100.
• Fabrizio Soccorsi, 78, personal doctor to Pope Francis, has died.

ASIAN NEWS

• China’s consumer inflation was 0.2% in December, as the strengthening recovery in the world’s second largest economy helped prices rebound from their first negative print since 2009. The producer price index fell at a 0.4% year-on-year pace in December compared to a 1.5% decline in November.
• Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co. will delist 500 structured products in Hong Kong, including warrants and callable bull/bear contracts on Hong Kong’s benchmark Hang Seng Index and other indices.
• Indonesia finds crashed Boeing’s Black Box.

EUROPEAN AND US HEADLINES

• Nancy Pelosi is moving to bring on a resolution to impeach Trump unless Pence acts to remove his boss under the 25^th Amendment. Democratic leaders on Monday will request unanimous consent in the House for a resolution urging Vice President Mike Pence to convene the cabinet to invoke the 25th Amendment to the Constitution “to declare the President incapable of executing the duties of his office.”
• Goldman Sachs, Citigroup Inc. and JPMorgan Chase & Co. plan to pause all political contributions.
• Top US banks in line for US$10bn of buybacks in latest round.
• Weather forecasters are talking a new Polar Vortex to hit Europe sending it into a cold freeze and higher LNG prices.

And finally…

It was a hot Saturday evening in the summer of 1965 and Fred had a date with Peggy Sue.

He arrived at her house and rang the bell.

“Oh, come on in!” Peggy Sue’s mother said as she welcomed Fred in.

“So, what are you and Peggy planning to do tonight?” she asked.

“Oh, probably go dancing, and then maybe grab a bite to eat at the malt shop, maybe take a walk on the beach…”

“Peggy likes to screw, you know,” Mom informed him.

“Is that so?” asked Fred, incredulous.

“Yes,” said the mother. “As a matter of fact, she’d screw all night if we let her!”

“Well, thanks for the tip,” Fred said as he began thinking about alternate plans for the evening.

“Have fun, kids”, the mother said as they left.

Half an hour later, a completely dishevelled Peggy Sue burst into the house and slammed the front door behind her.

It’s “The  TWIST ”, Mom!” she angrily yelled at her mother.

“THE DAMN DANCE IS CALLED THE TWIST!”

SERIOUS LOCK DOWN ADVICE . . . I think!

Everyone PLEASE be careful because people are going crazy from being locked down at home!

I was just talking about this with the microwave and the toaster while drinking my tea, and we all agreed that things are getting bad.

I didn’t mention any of this to the washing machine, because she puts a different spin on EVERYTHING!!

Certainly couldn’t share with the fridge, cause he’s been acting cold and distant!

In the end, the iron straightened me out! She said the situation isn’t all that pressing and all the wrinkles will soon get ironed out!

The vacuum, however, was very unsympathetic and told me to just suck it up!

But the fan was VERY optimistic and gave me hope that it will all blow over soon!

The toilet looked a bit flushed but didn’t say anything when I asked its opinion, but the front door said goodbye 2020. I was becoming unhinged and the doorknob told me to get a grip!! You can just about guess what the curtains told me: they told me to “pull myself together!”

Happy New Year

Clarence

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