ASX 200 piled on the points today rising 54 to 6842 (0.8%) after a slow start, post-RBA minutes buyers showed more enthusiasm. The RBA statement reinforced lower for longer on rates and an RBA unconcerned about rising bond yields and more concerned at getting wage growth back on the agenda. The Banks were firm as the Big Bank Basket rose to $166.72. MQG also in the money rising 0.9%. Healthcare played some catch up with CSL back in favour with the behemoth rising 2.3%. COH joined in the fun rising 1.8%. Big Miners under a little pressure as iron ore prices under a slight cloud, BHP fell 2.2% and RIO off 1.1%. FMG up 0.7% as its flashes its green credentials. Gold miners flat with energy stocks becalmed as WPL slipped 0.6% and STO down 0.8%. Industrials firmed with REITs doing well as bond yields fell, GMG up 3.4% and SCG up 1.4%. WOW rose 1.0% and in tech APT jumped 3.1% with XRO up 4.0% and the AllTech Index up 2.41%. In corporate news, NWS improved 0.7%, reached a deal with Facebook. PBH up 3.9% on the Banach Technology acquisition and BRN down 4.5% on a surprise CEO exit. 10-year bond yields fell to 1.68% after RBA comments.  In economic news, ANZ weekly consumer confidence was down 0.9%, with most sub-indices falling as we draw nearer to the end of the JobKeeper program. Payroll jobs rose 0.4% across the fortnight to 27 February 2021. House Price Index rose 3.0% in the December Quarter vs survey: +1.8%. Citi now expects established house prices to grow by 10.4% this calendar year, a 2.7% forecast upgrade. before moderating to 3.0% to 2022. Asian markets firms with Japan up 0.4% and China up 0.3%.

Today’s Highlights

  • ASX 200 up 54 to 6827. Off highs.
  • High 6859 Low 6768. Below average volume.
  • Chinese pollution crackdown hurting iron ore.
  • Big Bank Basket rises to $166.72.
  • All Tech Index up 2.41%
  • Dow Futures up 56.
  • Gold rises to $2236.
  • 10-year yield falls to 1.68%
  • AUD steady at 77.51c
  • Bitcoin crumbles to US$54,300
  • Asian markets firms with Japan up 0.4% and China up 0.3%.


STOCKS

  • CSL +2.33% the worm has turned.
  • PLL +9.28% launches DFS.
  • MTS -3.97% investor day and trading update.
  • BRN -4.50% CEO leaves unexpectedly.
  • SWM -4.39% last to sign perhaps?
  • PRL -11.54% profit taking.
  • VXR -9.80% placement stock coming back out perhaps.
  • LOT +20.00% half yearly accounts.
  • 88E +22.22% playing catch up to overseas listing.
  • XRO +4.04% APT +3.12% buyers back as bond yields steady.
  • GMG +3.43% REITS see buyers as yields tempered.
  • Speculative stock of the day: Cirralto (CRO) +29.63% good volume. No announcements.
  • Biggest Winners: ERA, MOE, TPW, PLL, MMM, CCX, PNV and TYR.
  • Biggest Losers: BRN, SWM, PPK, KAR, MTS, 360, AVZ and HT1.

TODAY

  • News Corp. (NWS) +0.73% reaches multi-year agreement to provide access to news and information to Facebook users in Australia.
  • Pendal Group (PDL) +2.72% CEO Emilio Gonzalez steps down. Gonzalez will be replaced by CEO of J O Hambro Capital Management, Nicholas Good. Gonzalez has a six-month notice period and is committed to ensuring a smooth transition.
  • PointsBet Holdings (PBH) +3.88% Irish subsidiary to acquire Banach Technology for US$43m.
  • Dexus (DXS) +2.89% Wholesale Property Fund (DWPF) enters into agreement with AMP Capital Diversified Property Fund (ADPG). ADPF is currently a ~$5 billion high-quality diversified property fund that invests in the office, retail and industrial sectors. Under the deal, DWPF will seek to combine with ADPF via a merger.
  • Brainchip Holdings (BRN) -4.50% CEO Louis DiNardo terminated without cause, effective immediately; current CTO Peter van der Made named as interim replacement. Yesterday’s it was announced that BRN would enter the ASX 300 on March 22.
  • Metcash (MTS) -3.97% Trading update for first 4 months of H2 FY21. Strong sales momentum has continued in all pillars from a shift in consumer behaviour, improved competitiveness, investment in shopper retention, and a favourable Christmas/New Year period. Corporate costs in FY21 are expected to be ~$15m. Supermarkets sales increased +14.4% vs pcp (10.6% ex tobacco). Hardware sales increased +31.6% vs pcp (+19.2% ex Total Tools). Liquor sales increased 19.6% vs pcp. Dividend Policy: Increase in target dividend payout ratio from 60% to 70% of underlying profit after tax, effective FY21.

ECONOMIC NEWS

Minutes of the Monetary Policy Meeting of the Reserve Bank Board. Click here.

The Board reaffirmed the existing policy settings, namely:

  • A target for the cash rate of 0.1%
  • An interest rate of zero on Exchange Settlement balances held by financial institutions at the Bank.
  • A target of around 0.1%for the yield on the 3-year Australian Government bond
  • The expanded Term Funding Facility to support credit to businesses, particularly small and medium-sized businesses, with an interest rate on new drawings of 0.1%
  • The purchase of $100bn of government bonds of maturities of around 5 to 10 years at a rate of $5bn per week following the Board meeting on 3 November 2020.
  • The purchase of an additional $100bn of government bonds when the existing bond purchase program is completed in mid-April 2021 at the same rate of $5bn per week.
  • It also highlighted the importance of stronger wages growth before considering any rise in interest rates.

Weighted average of the eight capital cities Residential Property Price Index:

  • rose 3.0% this quarter.
  • rose 3.6% over the last twelve months.

The total value of residential dwellings in Australia rose $257.9b to $7,724.4b this quarter. ABS Head of Prices Statistics Michelle Marquardt said: “The rise in property prices is consistent with a range of housing market indicators. New lending commitments to households, auction clearance rates and days on market all improved during the December quarter.”

  • Payroll jobs rose 0.4 per cent across the fortnight to 27 February 2021. The Hospitality industry (Accommodation and food services) continued to be the most affected by payroll job losses over the COVID-19 period. Payroll jobs in the industry were 11.6 per cent below mid-March, while payroll jobs across all industries were 0.2 per cent below.

ANZ weekly consumer confidence was down 0.9%, with most subindices falling as we draw nearer to the end of the JobKeeper program.

  • Data for the December quarter from APRA showed the number of property buyers with a debt to income ratio of greater than six times has risen by 89% from 11,397 in March 2019 to 21,551 December 2020.

CV19 NEWS

  • Vaccine Tracker: 381m doses over 126 countries. 9.10m doses a day. 109m doses in US average 2.43m.

BOND MARKETS

ASIAN NEWS

  • President Xi Jinping has warned that Beijing will go after so called platform stocks that control data and excessive market power. So far It is only Jack Ma that has fallen foul of Beijing, but this suggest others may be in his sights.
  • China Mobile is considering an A -share listing in Hong Kong.
  • New rules could come in for special online sales days in China.

US AND EUROPEAN HEADLINES

  • The Bitcoin fall continues. After hitting US$61,000 over the weekend its back to reality falling to US$54,300.
  • Opioid maker Purdue offers to pay US$4.3bn in settlement.
  • Countries across Europe are suspending AstraZeneca vaccine. EU coordinated vaccination response is fast falling apart.
  • Brazil appoints another new health minister.
  • EU says UK decision to erase trading rules for Northern Ireland is a breach of the treaty.
  • US airlines and tourist chiefs optimistic as Spring Break is back.
  • Elon Musk is now ‘Technoking’ at Tesla.
  • Texan energy company Giddy files for Bankruptcy.

And finally….

A Sad divorce

On the first day, he sadly packed his belongings into boxes, crates and suitcases. 

On the second day, he had the movers come and collect his things. 

On the third day, he sat down for the last time at their beautiful dining-room table, by candle-light; he put on some soft background music, and feasted on a kilo of prawns, a jar of caviar and a bottle of French champagne. 

When he’d finished, he went into each and every room and deposited a few half-eaten prawns dipped in caviar into the hollow centre of the curtain rods. 

He then cleaned up the kitchen and left. 

On the fourth day, the wife came back to live in house with her new boyfriend, and at first all was bliss.

Then, slowly, the house began to smell. They tried everything; cleaning, mopping, and airing-out the place. 

Vents were checked for dead rodents, and carpets were steam cleaned. 

Air fresheners were hung everywhere. Exterminators were brought in to set off gas canisters, during which time the two had to move out for a few days, and in the end they even paid to replace the expensive wool carpeting. Nothing worked! People stopped coming over to visit.

Repairmen refused to work in the house. The maid quit. 

Finally, they couldn’t take the stench any longer, and decided they had to move, but a month later – even though they’d cut their price in half – they couldn’t find a buyer for such a stinky house. 

Word got out, and eventually even the local realtors refused to return their calls. 

Finally, unable to wait any longer for a purchaser, they had to borrow a huge sum of money from the bank to purchase a new place. 

Then the ex-called the woman and asked how things were going. She told him the saga of the rotting house. He listened politely and said he missed his old home terribly and would be willing to reduce his divorce settlement in exchange for having the house.

Knowing he could have no idea how bad the smell really was, she agreed on a price only 1/10 nth of what the house had been worth … but only if he would sign the papers that very day.

He agreed, and within two hours her lawyers delivered the completed paperwork.

A week later the woman and her boyfriend stood smiling as they watched the moving company pack everything to take to their new home and to spite the ex-husband, they even took the curtain rods!

DON’T YOU JUST LOVE A HAPPY ENDING TO A DIVORCE!

Clarence

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