The ASX 200 drops 44 points to 6781 as commodity stocks under fire. Dow Futures down72 points. After a tepid start, selling kicked in across the board in the resource space. China reportedly planning cuts to steel production as part of its 14th Five Year Plan, weighed heavily. BHP fell 3.4% whilst FMG saw Monday’s gains evaporate down 6.4%. S32 also in the doghouse down 3.6% and gold stocks hurt as bullions slipped, NCM down 1.0% and GOR fell 3.2% though others fared better with EVN up 1.3%. Energy stocks too fell hard led by STO down 4.3% and WPL off 2.9% with ALD off 4.9%. In healthcare stocks CSL again under fire down 0.1% with SHL off 3.2% meanwhile banks were mixed as brokers released reports ahead of numbers. WBC fell 0.6% though CBA rose 1.6% as its brand value rose to #1. The Big Bank Basket rose slightly to $157.03. MQG dipped 1.0% and insurers flat lined. Tech stocks avoided the resource rout, APT climbed another 1.8% and XRO up 2.5% to give the All–Tech Index a 0.9% gain. In corporate news, RWC issued a strong business update rising 6.6%, VUL denied it was seeking funds with its roadshow and rose 19.6% and AMA saw a 14.2% slide on legal proceedings with its CEO. On the economic front, inflation rose 0.9% hotter than forecasts of 0.7% in the December quarter, 10-year yields at 1.08%. Asian markets narrowly mixed as Japan rose 0.3% and China off 0.1%

Today’s Highlights

  • ASX 200 dropped 44 points to 6781.
  • High 6821 Low 6764.
  • Big Bank Basket rises to $157.03
  • All Tech rose 0.95%
  • Dow Futures down 72 points.
  • Gold falls to AUD$2382
  • 10-year yield weakens to 1.08%
  • AUD steady at 77.30c
  • Bitcoin slips to US$31,732
  • Asian markets narrowly mixed as Japan rose 0.3% and China off 0.1

STOCKS

  • FMG 6.40-% iron ore sell off. Chinese steel mill utilisation had fallen for a fifth straight week.
  • WES +1.67% MS upgrades PT to 5300c.
  • WPL -2.89% S&P ratings put it on notice for downgrade over climate risks.
  • BPT -5.12% drop in production and sales.
  • RWC +6.59% strong rebound.
  • AMA -14.19% update on CEO legal proceedings
  • TPW -12.86% change in substantial holding from MS.
  • SXY -4.11% lacklustre reaction to quarterly.
  • NVX -6.65% profit taking.
  • LKE +54.90% quarterly activities report driving it higher.
  • MNS +35.14% undervalued battery tech play.
  • VML +13.04% more battery tech optimism.
  • PLL +28.00% still a day traders’ favourite.
  • VUL +19.64% Non-capital raising roadshow begins.
  • WBT 11.20-% profit taking.
  • NAB +0.37% former chief of staff gets 8 years.
  • CSL -0.12% AstraZeneca CEO leaves board on conflict issues.
  • IEL +7.65% media talk of corporate event taking out overhang.
  • Speculative Stock of the Day:  BPH Energy (BPH) +121.05% second day running Was spec of the day Monday on an announcement of carbon capture credit incentives and JV  for Permit 11.
  • Biggest Winners: PLL, VUL, IEL, NTO, RWC and PME
  • Biggest Losers: BCK, AMA, TPW, MGX, ASM and NVX.

TODAY

  • Domain Holdings (DHG) +5.74% Reportedly close to making a $100m strategic investment. Industry sources suggest it could be surveying business GlobalX or home loan broker Lendi.SKYCITY Entertainment Group (SKC) -7.89% Appoints Australian and New Zealand COOs. Callum Mallett has been appointed COO New Zealand and David Christian has been appointed COO Australia.
  • St. Barbara (SBM) – Q2 gold production 89,670oz vs quarter-ago 72,990oz. AISC $1,517/oz vs quarter-ago $1,711/oz. FY guidance maintained, sees gold production between 370,000-410,000oz at an AISC of $1,360-$1,510/oz.
  • Asaleo Care trading (AHY) +3.12% Expects FY underlying EBITDA of $87.2m vs guidance of $84-87m. Regards Essity proposal as materially inadequate. FY20 unaudited revenues $419.2m, +2.3% after 3.0% growth in FY19. Notes sufficient capacity to fund ongoing dividends. FY21 outlook: Targeting 5-7% revenue growth and EBITDA between $90-93m. Earnings growth moderated by final year of absorption of stranded costs from exit of Australian Consumer Tissue and NZ Baby businesses along with rising pulp prices. FY22 outlook: Targeting mid-single-digit revenue growth. Targeting EBITDA growth 10%+.Regis Resources (RRL) +0.82% Q2 gold production 91,411oz vs quarter-ago 81,567oz. December quarter: AISC $1,317/oz, -6% vs quarter ago. FY Guidance Maintained: Sees production of 355,000-380,000oz with an AISC between $1,230-1,300/oz.
  • Atlas Arteria (ALX) -0.33% Q4 weighted average toll revenue down 19.9% vs year ago.Traffic at French businesses in particular, recovered strongly in Q3 following the easing of restrictions implemented in Q2, but was again affected in Q4, albeit to a lesser extent, by movement restrictions implemented in November in response to a second wave of COVID-19.
  • Reliance Worldwide Corp. (RWC) +6.59% Expects H1 EBITDA between $164-167m vs year-ago $126.3m and consensus $155.7m. Preliminary H1: Net sales $642m, +13% vs year ago. EBITDA margins have increased as a result of the strong operational leverage driven by higher volumes, and each region is expected to report strong margin expansion for the period. Outlook: On track to meet target of $25m in annual cost savings on a run rate basis by the end of the 2021 financial year.

ECONOMIC NEWS

  • The Future Fund returned only 1.7% for 2020 against its benchmark of 4.4%.
  • Consumer Price index (CPI) December quarter: Headline: +0.9% vs survey: +0.7%
  • NAB business survey for December: Confidence: +4 (prior: +13); Conditions: +14 (prior: +7)

BONDS

COVID – 19 NEWS

  • Cases pass 100m. Deaths now at 2.1m. Pfizer Inc. will be able to supply the U.S. with 200 million doses two months sooner than previously forecast.
  • UK becomes the sick man of Europe with a horror 100,000 deaths from CV19. Deaths in London, which is at the centre of the current outbreak, are running at 84% above the five-year average amid concerns a new strain of the virus is more fatal.
  • Vaccine tracker: More than 71.3 million shots given worldwide.
  • Peru locked down swathes of the country after an explosion in Covid-19 cases overwhelmed hospitals and pushed the death toll from the disease over 40,000.
  • South Korea reported 559 new cases in the last 24 hours.

ASIAN NEWS

  • Ant Group IPO could kick off again once issues resolved said the Central Bank.
  • Frozen fish is piling up at Chinese ports due to CV19 Supply chain issues. Plus, tests for CV19 are further complicating matters. Plug points and shortage of fridges also an issue.
  • Japan seeks domestic clinical trials before vaccine roll out.

EUROPEAN AND US HEADLINES

  • US earnings in focus: Microsoft hit record after stay at home hit.
  • Germany is pressing the EU for powers to stop exports of vaccines.
  • IMF raises Global GDP forecast by 0.3% to 5.5%.
  • France considering tougher lockdown as Boris apologies for stuffing it up.

And finally….

How many call centre operators does it take to change a lightbulb ? They aren’t authorised to do that, but do appreciate your inconvenience.

How many ministers does it take to change a light bulbnone it has to go to several commitees to decide who does it then a vote then a white paper then like bexit will take 4 years before deciding that people do not need light!.

How many politicians……as my collegague from across the aisle must surely agree it would be a minimal number and once consensus is achieved I am sure that number can be refined to a more manageable number if funding can be assured without increasing the tax burden of my constituency as we all feel that the corporations are not shouldering their fair share and must be investigated and brought to heel!

Clarence

XXX