ASX 200 faded into the close up only 7 points (+0.1%) to 7386. The market briefly traded above 7400 as banks, industrials and healthcare moved higher. The Big Bank Basket up $187.15, MQG up 0.7% with CBA up 1.3% to new records. Insurers slightly better with IAG up 1.2% on a catastrophe update, QBE rose 0.3% and SUN up 1.2%. Healthcare also in the pink with CSL up 0.4% and RMD continuing its rally up 1.4%. Industrials doing well with GMG up 0.7%, SEK up 2.3% and WOW up 0.5% ahead of demerger talks. In resources, commodities prices stumbling taking miners lower, BHP down 1.7% OZL down 6.7% and IGO off 3.8%. Coal stocks doing well with NHC up 4.9% after yesterday’s update. Gold miners continue to be pressured ahead of the FOMC meeting. Energy stocks got a boost from the crude prices, STO up 1.0% and WPL up 2.3%. Tech stocks lower led by APT flat and XRO off 0.5%. The All–Tech Index flat. In corporate news, CWY up 0.8%, shrugging off an ACCC probe into its proposed acquisition of certain Suez post-collection waste assets in Sydney. IAG is improving 1.2% despite pointing to above allowance claim costs from the Victorian storms. On the economic front, the WBC leading index which indicates the likely pace of economic activity three-nine months in the future eased from 2.86% in April to 1.47% in May. ANZ–Roy Morgan consumer confidence lifted 0.3% last week as Melbourne’s lockdown eased. 10-year bond yields rose to 1.54%. Asian markets mixed with Japan up 0.02% and China down 1.03%. Dow futures down 24.

Today’s Highlights

  • ASX 200 up 7 points to 7386
  • High 7406 Low 7372
  • Dow futures down 24
  • Big Bank Basket spurts to $187.15
  • All Tech Index flat
  • Australian Gold steady at $2419
  • 10-year yield rallies to 1.54%
  • AUD slips to 76.88c
  • Bitcoin steady at US$40300
  • Asian markets mixed with Japan up 0.2% and China down 1.03%

END OF DAY PODCAST – ASX 200 closes up 7 to 7386 after briefly touching 7400. Banks remain the driver with the Big Bank Basket up to $187.15. Miners the casualties with BHP down 1.7% and OZL off 6.7%. CSL putting on some gains with industrials also firm. Tech stocks flat and we wait for the Fed meeting results tonight. European markets opening relatively unchanged.

STOCKS

  • CTT +6.06% response to ASX query. Business model intact and flourishing.
  • JIN +3.70% hitting the jackpot. Moves in gaming sector help.
  • SOL +2.78% NHC gains on coal price.
  • OZL -6.69% commodity price falls.
  • NXL -5.80% second thoughts.
  • ASB -5.66% broker downgrades.
  • COD -18.05% ceasing to be a substantial shareholder.
  • HZR -10.00% commercial demonstration
  • SSG -8.26% business update.
  • HCH +5.56% drilling results 144m grading 1% CuEq.
  • AVH +12.38% Q$ results – reopening beneficiaries.
  • FFX +9.89% JV with Ganfeng with US$194m support.
  • FNP +5.06% options offer reminder. They are free.
  • SCP +1.17% buys $150m shopping centre from AMP.
  • Speculative Stock of the Day: IPO debut LM8 +41.67% not bad volume but nothing substantial.
  • Biggest Winners: LIC, MMS, CTT, TLX, ASM, PPK and NHC.
  • Biggest Losers: PYC, OZL, ORE, GXY, SFT and IMU.

TODAY

  • Santos (STO)+1.04%CEO Kevin Gallagher at the oil and gas industry group’s flagship conference in Perth said, “we have to get on the front foot as an industry and really lead the charge on decarbonisation before we find ourselves in the same place as the coal industry”. The executive pointed to opportunities in carbon capture and storage and hydrogen for the industry.
  • Goodman Group (GMG) +0.68% Estimated second-half distribution of 15c/security. Record date June 30, payable August 26, 2021.
  • Shaver Shop Group (SSG) -8.26% Expects profit between $16.8-17.5m in FY21. Seessales of $211-213m and net cash at the end of June around $6-8m.
  • Cleanaway (CWY) +0.76% ACCC to investigate Cleanaway’s proposed acquisition of certain Suez post-collection waste assets in Sydney.
  • Insurance Australia Group (IAG) +1.17% Update following Vic storm and flooding, estimates FY21 net natural perils claim costs between $720-743m, ahead of the $658m allowance for this period.

ECONOMIC NEWS

  • The WBC leading index which indicates the likely pace of economic activity relative to trend three to nine months into the future, eased from 2.86% in April to 1.47% in May. The growth rate has normalised significantly over the last six months to signal a more sustainable above-trend growth rate through the remainder of 2021 and 2022.
  • Consumer confidence lifted 0.3% last week, as the two-week lockdown in Melbourne ended, although some restrictions remain. Among the confidence subindices, both current and future financial conditions declined, while the rest increased.
  • Fitch Ratings has increased its global economic growth and inflation forecasts but believes consumer price increases will begin to soften in the coming years. It now expects the global economy to expand by 6.3% this year, up 0.2% from its forecast three months ago.

BOND MARKETS

CV19 NEWS

  • Vaccine Tracker: 2.42bn doses in 180 countries (2 new ones) 35.1m a day. In US 312m doses at 1.14m a day.
  • In Australia, 103,895 a day – 10 months until 75% coverage.
  • California fully reopened its economy, while New York lifted its remaining restrictions. U.S. pandemic deaths topped 600,000.
  • Russia said its Sputnik vaccine works against the delta variant.

ASIAN NEWS

  • China has sent 28 planes near Taiwan just to keep things interesting.
  • China’s crackdown on shadow banking continues. Now taking aim at the US$1 trillion of investments sold by banks that are supposedly low risk and high yield. Banks and wealth mangers can no longer use money invested in so-called cash management products to buy long-term debt or bonds rated below AA+.
  • Chinese State-owned Assets Supervision and Administration Commission has ordered state enterprises to control risks and limit their exposure to overseas commodities markets. Companies have been asked to report their futures positions for Sasac to review.
  • Chinese hog futures fall to record low on fears of a pork glut.

US AND EUROPEAN HEADLINES

  • UK May CPI 2.1% YoY v forecast 1.8%. 1.5% in April.  PPI 10.7% v 10.6% forecast.
  • Israel conducts more airstrikes against Gaza.
  • Credit Suisse is readying insurance claims on Greensill losses.
  • US Industry group says business travel will not recover until 2024.
  • Fed policy meeting finishes tonight. It’s all about the Dots.
  • European markets expected to open unchanged. EU cuts 10 banks out of bond sales over anti-trust breaches.
  • Biden v Putin kicks off. 4-hour meeting of minds.

And finally…

What did the elephant say to the naked man? A. “How do you breathe through something so small?”

Late one night a burglar broke into a house and while he was sneaking around he heard a voice say, “Jesús is watching you.” He looked around and saw nothing. He kept on creeping and again heard, “Jesús is watching you.” In a dark corner, he saw a cage with a parrot inside. The burglar asked the parrot, “Was it you who said Jesús is watching me” The parrot replied, “Yes.” Relieved, the burglar asked, “What is your name?” The parrot said, “Clarence.” The burglar said, “That’s a stupid name for a parrot. What idiot named you Clarence?” The parrot answered, “The same idiot that named the rottweiler Jesús.

Clarence

XXX