The ASX rushed out of the gate again today up 63 points to 6825 although off highs. Last weeks dismal showing a distant memory as fund managers got over post-holiday grumps. Banks were a huge driver again as the Big Bank Basket hit $158.85. MQG joined in up 0.6% and the insurers rose as bond yields keep rising. QBE up 1.7% and IAG up 2.0%. Big Miners though were firmly in the red following iron ore price falls, as we head into Lunar New Year next week. BHP down 2.1% and RIO off 1.1%. Energy stocks enjoyed a boost from oil price rises with WPL up 0.8% and STO up 1.2%. REITs also doing well despite yields rising, GMG up 2.6% and SCG up 2.2%. Industrials saw gains in WOW up 0.6% and SYD up 2.4% whilst tech stocks piled on the points, SEK up 3.2% and REA up 1.8%. In corporate news, BNPL stocks initially shrugged off UK regulations before some towel throwing ensued, APT down 1.6% and Z1P down 1.1%. AMC kicked off earnings season with a solid set of numbers rising 4.4%. WBC kicked again despite a court case going against them, VUK up 14.6% on its Q1 update, NIM stable, sees the balance of risks weighted to the upside. SAR and NST got court approval for the merger and both fell around 4% with bullion prices. In economic news, Philip Lowe was out and about talking on rates as best guess for 2024. Building approvals for December: +10.9% vs consensus: +3.0%. Bond yields up to 1.17%. Asian markets heading higher with Japan up 0.8% and China 0.5% to the good. Dow futures up 64 points.
- ASX 200 up 62 to 6825. 11-month high.
- High 6853 Low 6767. Sub-par volume. Late small sell off.
- Big Bank Basket bonanza continues up to $158.85.
- All Tech up strongly by 0.73%.
- Dow Futures up 64
- Gold slips to AUD$2413
- 10-year yields rise again to 1.17%
- AUD slips to 76.13c
- Bitcoin pushes on to US$36,468
- Asian markets heading higher with Japan up 0.8% and China 0.5% to the good.
MARCUS TODAY TEAM INSIGHTS
MARCUS STRATEGY – The bull market continues – up 100 points on the ASX 200 yesterday and another 80 today. There’s a bit of a dip in the iron ore price holding back the major resources but otherwise the Australian results season has started well with AMC up 6% on results today and in the US, Alphabet is up 6% on results and Amazon 1%. We have been worrying about results from the recovery stocks we hold after the WOR downgrade this week, but are going to leave it with the market running like this. We’ll take what comes in the recovery stocks. Maybe the market will see through to the other side which is where our focus is. The Short Squeeze is unwinding. The RBA have our backs. It’s a good day for Marcus today Members and their portfolios. READ MORE
HENRY’S TAKE -The Whale hunt continues but Bevan shows the way perhaps? A look at MOC as a way to leverage the low rates forever mantra, plus a new float which debuted well but waiting for it to settle down. And what makes a sophisticated investor? More than a smoking jacket and a Martini it seems. Ask the Analyst tonight at 5 pm. READ MORE
- RZI +15.47% Key Metrics cheer. FUM up 5.5%
- VUK +14.63% 1Q Trading update.
- WBC +1.54% loses high court appeal. Fines to follow.
- PDN -4.41% uranium story profit taking.
- SAR -4.09% NST -4.21% bullion price falls.
- WSA -1.57% Broker downgrades.
- S32 -2.87% Hi Lo silver.
- SWM +7.69% Microsoft offer to pay for news.
- CCP +4.74% brokers pushing after update.
- ADO +85.00% Ellume partner.
- VML +14.63% offtake agreement ticks boxes.
- PAR +11.65% pain reduction and improvement in patient data.
- FWD +16.36% ups earnings guidance.
- LVT +% media speculation
- VUL -trading halt – cap raising at 650c
- CAR +6.25% GS broker upgrade.
- CXL +1.33% Thorney ups stake on hedge fund sell down.
- Speculative Stock of the Day: Zicom Group (ZGL) +128.07% secures total orders worth $60m to design and supply LNG propulsion systems. Market cap only $32m
- Biggest Winners: VUK, PAR, INR, HSN, SWM, PSI and PNI.
- Biggest Losers: STX, PBH, PDN, NSR, SAR, COE and S32.
- Telstra (TLS) +0.63% To stop streaming live NRL and AFL games. Customers who have had access to sports such as the NRL, AFL, netball and football for free since 2014 via the ‘Live Pass’ product, will now have to pay $5 per month for NRL and AFL via a discounted Kayo subscription, while other customers can buy a subscription for $15 per month.
- ANZ (ANZ) +1.85%Thought to be working on a possible bid for ME Bank.Bendigo and Adelaide, Bank of Queensland, and a private equity consortium named as other potential bidders.
- Amcor (AMC) +4.45% H1 adjusted net income US$522m vs consensus US$515m. Adjusted EPS US33c vs year-ago US29.2c. Revenue US$6.20bn vs consensus US$6.19bn. Adjusted EBIT $743m vs consensus $739m. FY Guidance (Jun 2021): Adjusted constant currency EPS growth of ~10-14% vs prior guidance +7-12%. Reaffirms free cash flow US$1.0-$1.1bn. The Amcor board has approved the repurchase of a further US$200m of ordinary shares and CDIs, bringing the total approved in FY21 to US$350m.
- BWP Trust (BWP) -1.63% H1 distributable profit $57.9m vs year-ago $57.9. Revenue $76.1m vs year-ago $76.2m. Net tangible assets of 320c per unit at 31-Dec-20. Like-for-like rental growth of 2.0% for the 12 months to 31-Dec-20. Interim distribution per unit (cents) 9.02 vs year-ago 9.02. Outlook:The Trust is well-positioned in the current COVID-19 environment with the significant majority of rental income being from Bunnings and other national large format retailers which are all trading well during this time. Rent reviews are expected to contribute incrementally to property income for the half-year to 30 June 2021.
- Virgin Money (VUK) +14.63% Q1 update: Stable net interest margin (NIM) as expected. Sees a broadly stable FY21 NIM (vs FY20 level 156bps), based on the current economic outlook and interest rate expectations with the balance of risks and opportunities currently weighted to the upside. CET1 ratio increased ~50bps to 13.9%. Customer deposits increased in Q1 by 0.9% to £68.1B as further COVID-19 restrictions drove lower Personal customer spending and Businesses continued to maintain high levels of liquidity. Low impairment charge reflects stable asset quality. Outlook: “Given the current UK-wide restrictions and ongoing uncertainty, we maintain the cautious economic outlook we outlined in November and our full-year guidance remains broadly unchanged.”
- Westpac (WBC) +1.54% High Court of Australia dismisses Westpac’s appeal in relation to proceedings brought by ASIC about the provision of financial product advice. The High Court found that Westpac had provided “personal advice” on these calls and in doing so had breached certain provisions of the Corporations Act. The proceedings will now be remitted to the Federal Court of Australia for a hearing on penalties.
- Governor Lowe says low rates until 2024 ‘best guess’.
- Lowe noted that slow wage growth means that he’s not worried about a generalised outbreak in inflation.
- Markit services PMI for January declined to 55.8 points from 57.0 in December. A reading above 50 represents industry expansion.
- Building approvals for December: +10.9% vs consensus: +3.0%.
- New car sales going gangbusters. The Federal Chamber of Automotive Industries (FCAI) said 79,666 vehicles were sold in January, up from 71,731 in January 2020.
- The rebound was strong in Western Australia, which was up 24.9% over the previous January, but muted in Victoria where the increase was 1.9%.
- Toyota was the No.1 brand in January with sales of 16,819 vehicles which represented 21% of the total market. Mazda was next with 10.7%, Hyundai with 7.5% and Kia with 6.9%. Hilux biggest seller at 3913 followed by Ford Ranger.
- Vaccine Tracker: 104m doses in 66 countries. 4.22m doses a day.
- 33.7m doses given in USA more than have tested positive since pandemic began.
- NZ approves Pfizer vaccination. Can’t find anyone to vaccinate though.
- Emmanuel Macron said that based on contracts secured at a European level, France will be able to offer the Covid-19 vaccine to all adults who want it “by the end of summer.”
- AstraZeneca study shows single jab 76% effective for 12 weeks.,
- Captain Tom dies of CV19.
- Kia Motors jumps after reports that Apple will invest US$3.6bn.
- The People’s Bank of China withdrew a net 80 billion yuan ($12 billion) of liquidity on Wednesday. The overnight repo rate fell 39 basis points to 1.84%, in line for the lowest since Jan. 15.
- Alibaba is back with its US$5bn bind issuance program. Various maturities up to 40 years. The company is resuming the debt plans after reporting a 37% jump in quarterly revenue that beat analysts’ expectations.
EUROPEAN AND US HEADLINES
- Jeff Bezos moves aside to allow Jassy through. Amazon ordered to pay back tips for drivers.
- New Treasury secretary Yellen putting her mark on GameStop with meeting of top regulators.
- President Biden is set to review critical supply chains in light of US CV19 response.
And finally…please send jokes…running out