ASX 200 off highs up 33 to 6778 (0.5%) as AUD falls and industrials pick up. Dow futures down 46 points. A slow start but buyers stepped up as AUD dipped with healthcare in the pink. CSL up 1.9% and COH up 3.7% on a weaker AUD. The weaker currency also helped ALL up 1.9% and APT up 0.3% with the 10-year yield falling back to 1.64% and helping bond proxies. TCL rose 0.7% and GMG up 3.1%. Miners drew some strength from the higher iron ore price with RIO up 1.8%, but BHP down 0.2% and FMG flat. Gold miners lightly higher with NCM up 1.0% and NST up 3.2%. Energy stocks and travel stocks fell following international leads, FLT down 3.1% and WEB down 4.5%. STO off 1.5% and WPL down 1.1%. In financials, banks were mixed after Fitch talked up ratings change, and insurers gained as the sun shone and the rain stopped. QBE up 0.5% and IAG up 1.3%. The Big Bank Basket unchanged at $164.40. In corporate news, XRO up 1.9%, acquires Swedish based e-invoicing infrastructure business Tickstar for $22m. CPU launches $835m (US$634m) equity raising priced at 1355c. To acquire Wells Fargo Corporate Trust Services for US$750m. ART adding another 66.7% after its 61% jump on debut yesterday. In economic news, IHS Markit ‘flash’ readings for March purchasing manager indexes: Manufacturing 57 vs previous 56.9. Services 56.2 vs previous 53.4. Both indexes remain in expansion territory. Asian markets slip with Japan down 1.9% and China down 1.4%. AUD below 76c. Big help.

Today’s Highlights

• ASX 200 up 33 to 6778. Off highs.
• High 6799 Low 6736. Below average volumes.
• Big Bank Basket rose slightly to $164.40.
• All Tech Index up 0.43%
• Dow Futures down 46.
• Gold higher at $2278.
• 10-year yield big fall back to 1.64%
• AUD falls back to 75.89c
• Bitcoin slips back to US$54323
• Asian markets slip with Japan down 1.9% and China down 1.4%

MARCUS TODAY TEAM INSIGHT

MARCUS STRATEGY – An interesting change of themes today, the big question is whether it will last or evaporate. We have gone from the assumption of a faultless economic recovery to worrying about a new pandemic wave in the northern hemisphere. Meanwhile a string of US economic numbers undershoot. As recovery doubts creep in, interest rates peak, the Aussie dollar falls, interest rate sensitive sectors bottom, technology bottoms and the energy and travel sectors come off the top. In the Strategy piece today we talk about what you would do if the recovery stalled (some major themes change) and what we are doing about it now. Otherwise the market has survived, a quietly positive day over all with energy and travel down and technology up. READ MORE

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HENRY’S TAKE – No luck in CCR. Maybe today will be the day. A look at the first inclusion in the House Deposit Basket. It may be boring but it has potential capital growth and a good yield plus a catalyst for a move higher. A look at US infrastructure spending and some potential winners on the ASX. MQG could be the standout. Long way to go, will Biden succeed where Trump failed? No Ask The Analyst this week don’t forget. READ MORE

STOCKS

• CTT +7.46% index changes helping.
• CIA +3.66% bargain hunters step in on iron pre rise.
• BRN -10.27% bubble bursts.
• LYC -9.05% US counter-part falls.
• PDN -5.06 % capital raise weighs.
• CTD -2.63% FLT -3.12% WEB -4.55% travel under pressure on EU woes.
• GNC +6.16% strategic change to encompass expansion of bulk business.
• WBC -0.98% speculation on sale of NZ business.
• PMV +2.67% jobkeeper return speculation.
• GNX – capital raising.
• WHC +4.32% coal price win.
• PLL +3.32% US capital raising.
• 88E -unchanged after profit taking.
• ALC +17.86% new NHS Trust win. Recommended the other day at 29c.
• BTH +6.36% bargain hunting.
• KLL +9.30% update on Beyondie SOP project.
• SKO +3.64% thin but firm on business update on Booking.com deal.
• Speculative Stock of the Day: ART +66.67% kicked again now 3x IPO price. Rewardle (RXH) +45.45% investor presentation. Not great volume though.
• Biggest Winners: CTT, GNC, OCL, REA, MMM, BWX, WHC and MOE.
• Biggest Losers: BRN, LYC, SWM, ERA, CRN, PAR and PDN..

TODAY

• Sigma Healthcare (SIG) – Reportedly looking for acquisition targets.CEO Mark Hooper told newswires, “the main area (for deals) is medical consumables and medical devices”. Added, the company as in a good position and ‘on the hunt’.
• Westpac (WBC) -0.98% To commission two independent reports concerning risk governance and liquidity risk management following RBNZ request. The first report will assess WBC New Zealand (WNZL) risk governance processes and practices. The second report relates to the effectiveness of the actions WNZL has taken to improve the management of liquidity risk and the associated risk culture, following previously identified breaches of the RBNZ’s Liquidity Policy. The reviews apply only to WNZL and not the governance processes of Westpac Banking Corporation in Australia or its New Zealand branch
• GrainCorp (GNC) +6.16% Expects new operating initiatives to generate additional $25m in annualised EBITDA by 2023-24. Delivery of the operating initiatives, together with completion of the international expansion in 2H21, is expected to increase ‘through-the-cycle EBITDA to A$240M by 2023/24.
• Premier Investments (PMV) +2.67% H1 Net Profit after Tax $188.2m vs consensus $176.0. Reports H1:Revenue $784.6 vs consensus $788.3m. Retail EBIT (pre-AASB16) $237.8m vs guidance of $221-233m and consensus $231.5m. Interim dividend 34.0c/share, fully franked. 7-week trading update: Global like for like sales +32.1% vs previous corresponding period (pcp) and Gross margin up 379 bps vs pcp. Peter Alexander – total sales +46.0% vs pcp. Apparel Brands – Sales and margin growth momentum has continued with LFL sales growth +27.6% vs pcp. Online – Strong online sales growth has continued with sales growth +61.9% vs pcp.
• Xero (XRO) +1.95% To acquire Swedish based e-invoicing infrastructure business Tickstar for up to SEK 150m ($22.9m). An upfront payment of SEK 60M, to be settled 50% in cash and 50% in shares in Xero, and subsequent earnout payments based on product development and performance milestones, of up to SEK 90M. Transaction, integration and operating costs are anticipated to have minimal impact on Xero’s FY22 EBITDA. Completion of the transaction is expected in Q1 of Xero’s financial year ending 31-Mar-22.
• Computershare (CPU) – Acquires assets of Wells Fargo Corporate Trust Services for US$750m; launches $835m (US$634m) equity raising priced at 1355 cents per share. Highlights: After including stand-up capital expenditure, regulatory capital requirements and full run-rate synergies, represents an Enterprise value/Last twelve months (EV/LTM) EBITDA acquisition multiple of 5.9x. Expected to be at least 15% EPS accretive on a pro forma FY21 basis including full run-rate synergies. Regulatory approvals expected to be obtained during 2Q22. FY21 Guidance unchanged. Capital Raise: Launches $835m (US$634m) underwritten pro-rata accelerated renounceable entitlement offer. 1 new Computershare share for every 8.8 shares held on the record date of Monday, 29-Mar-21, at a price of $1355 cents per new Share.
• Santos (STO) -1.53% Awards Barossa FPSO services contract to BW Offshore; achieves an overall reduction of US$1bn in capital expenditure. Highlights: Represents the largest capital expenditure component of the US$3.6bn Barossa offshore gas and condensate project to backfill Darwin LNG. Contains an upfront pre-payment and an option to buyout, and achieves an overall reduction of US$1bn in capital expenditure. A final investment decision on the Barossa project is anticipated in the coming weeks with first gas targeted for H1 of 2025. Santos currently holds a 62.5% operated interest in the Barossa joint venture along with partner SK E&S (37.5%). Santos is finalising an agreement to sell a 12.5% interest in Barossa to Darwin LNG partner JERA and has a binding agreement to sell 25% interests in Bayu-Undan and Darwin LNG to SK E&S, subject to FID on Barossa.

ECONOMIC NEWS

• IHS Markit ‘flash’ readings for March purchasing manager indexes: Manufacturing 57 vs previous 56.9. Services 56.2 vs previous 53.4. Both indexes remain in expansion territory.
• ANZ analysts forecast property prices in Australia’s capital cities will increase 17% this year, up from prior estimates of 9%, as a fear of missing out powers buying activity.
• Data released by the Australian Bureau of Statistics on Wednesday shows that electric vehicle imports jumped 485%in February to $104m, while hybrid vehicle imports were up 101%to $190m.

International Merchandise Trade, Preliminary, Australia -Key statistics

• Exports of goods in February 2021 increased $502m (2%) to $32,113m
• Imports of goods in February 2021 increased $577m (2%) to $24,013m
• For February 2021 there is a goods trade surplus of $8,100m (original, current price, merchandise trade basis).

Top five export destinations

Key country movements:

• China declined $990m (-8%).
  Japan declined $162m (-4%).
  Singapore increased $752m (67%).
  South Korea increased $594m (30%).
  India increased $390m (33%).

Fitch revised its 2021 economic growth forecast for Australia to 4.7% from 3.8%. This upgrade has also led to a improving outlook for local banks. Upgraded from negative to stable could now be on the cards.

VACCINE TRACKER

• Question marks remain over AstraZeneca vaccine. Company will its update findings within the next 48 hours.
• 468m doses across 135 countries. 11.3m a day. In USA, 128m doses and an average of 2.5m a day. If we could do that here we would be done and dusted in 10 days (first jab anyway). Experts like Dr Fauci say that 70-085% of a population to halt the pandemic. In the US, at this pace, it will take another 5 months to cover 75% of the population.

BOND MARKETS

ASIAN NEWS

• Intel’s plan to spend billions of dollars on new factories and create a foundry business that will make chips for other companies sent shares of its two biggest Asian rivals lower Wednesday. Intel aims to put the U.S. firm into direct competition with TSMC, the world’s most-advanced chipmaker. Intel will spend an initial US$20bn on two new plants in Arizona in an attempt to break into the foundry business.
• It’s happening everywhere. In India, active investor accounts rose by a record 10.4m in 2020, according to data from the country’s two main depositories. One broker, Angel Broking, says that 72% of the new 510,000 clients that it added in just the months between October to December had never traded before. Most of the new business is conducted on a mobile phone.

US AND EUROPEAN HEADLINES

• Early modest losses expected from European markets.
• AstraZeneca in the spotlight on trial results.
• Yellen says tax rises needed to pay for infrastructure plan.
• Huge container ship runs aground in the Suez Canal. Is it a new Veolia tactic?
• 4 elections in two years for Israel and still no winner.
• Robinhood files for IPO. GameStop falls on results.
• EU looks set to tighten export rules on vaccine exports.

And finally….

A man goes to see the Rabbi. ‘  

“Rabbi, something terrible is happening and I have to talk to you about it.

  
The Rabbi asked, “What’s wrong?”  

The man replied, “My wife is going to poison me.” 

 
The Rabbi, very surprised by this, asks, “How can that be?”  

The man then pleads, “I’m telling you, I’m certain she’s going to poison me. What should I do?”  

The Rabbi then offers, “Tell you what. Let me talk to her, I’ll see what I can find out and I’ll let you know.” 

 
A week later the Rabbi calls the man and says, “I spoke to your wife on the phone for three hours. You want my advice?  

The man said, “Yes” and the Rabbi replied, “Take the poison.”

Clarence

XXX