ASX 200 crashed 134 points to 7235 (1.8%) onsolid volume as US rate uncertainty came to town. Banks and other financials were especially hard hit as bond yields fell (?). The Big Bank Basket cratered to $178.71 with CBA a big loser down 5.4% on news of a sale of its general insurance business. Insurers suffered with QBE down 5.3% and IAG down 3.2%. MQG dropped 2.2% as risks build. Industrials were flat across the board. SYD down 2.8%, TCL off 1.5% and ALL down 1.7%. Some strength in consumer stocks in COL up 0.7% and WOW up 0.8%. Healthcare in triage, CSL down 0.2% and RMD down 1.2% on profit-taking. Tech stocks were mixed, WTC down 0.7%, XRO down 0.9% and REA off 3.3% but BNPL stocks better ahead of Amazon Prime day. Z1P up 0.9% and APT up 2.5%. The All-Tech Index down 0.5%. Miners flopped, BHP down 2.0% and energy stocks eased led by STO off 1.2% with WPL down 1.8%. Gold miners weaker in second liners, DEG down 5.3% and CHN off 7.8%. In corporate news, ILU is off 2.1% on reports it is looking to sell its Sierra Leone operations. There is also speculation it may be able to increase zircon pricing by ~$125/tonne. BLD 1.3% higher to sell its North American Building Products business to Westlake Chemical subsidiary for $2.9bn. Continues to review options for its North American Fly Ash business. VCX down 1.2% after reporting a 1.2% fall in property valuations since December. Proposes interim dividend of 6.6cps. AST down 2.2% as its reviews staff underpayments. On the economic front, preliminary retail turnover rose 0.1% in May, the Victorian lockdown weighing on the result. 10-year yields back to 1.49%. Asian markets smashed with Japan down 2.42%, HK down 1.45% and China off 0.09%. Dow futures down 74 points.

Today’s Highlights

  • ASX 200 down 134 to 7235 (1.8%). Solid volume for a Monday
  • High 7347 Low 7217
  • Dow futures down 74
  • Big Bank Basket crashes to $178.71
  • All Tech Index falls to 0.5%
  • Australian Gold slips to $2360
  • 10-year yield falls to 1.49%
  • AUD drops 75.02c.
  • Bitcoin slips to US$33969
  • Asian markets smashed with Japan down 2.42%, HK down 1.45% and China off 0.09%

END OF DAY PODCAST – ASX 200 falls 134 points to 7235 (1.8%). Banks bashed badly with Big Bank Basket falling to $178.71. CBA falls 5.5% on the sale of general insurance business. BLD rises 1.3% after the sale of US business. All Tech Index outperforms down only 0.5% as BNPL stocks rally. Miners under pressure with financial hard hit as bond yields fall. 10-year at 1.49% Tokyo down 3.3% European markets expected to open around 1% lower.

STOCKS

  • ACW +19.23% clinical trial progress.
  • MP1 +2.27% board update.
  • BLD +1.33% block trades galore.
  • JIN +2.89% crunch week for TAH?
  • APT +2.46% Z1P +0.86% BNPL resurgence.
  • CDA -11.80% sell off continues.
  • TLX -9.98% trial update.
  • SPL -9.41% UK Update. Regulator pauses spray.
  • LTR -7.41% commodity sell-off.
  • VUL -8.01% sliding back further.
  • LCK -12.82% broker research.
  • VML -8.33% commodity sell-off.
  • 8VI +10.71% Annual report.
  • IRI +8.42% market update.
  • REA -3.29% house price constraints perhaps?
  • ALL -1.70% profit-taking.
  • QBE -5.30% trounced.
  • MIN -5.45% iron ore and lithium weakness.
  • WTC -0.68%% Canada’s Descrates results set scene for WTC.
  • CBA -5.43% capital return gets closer.
  • Speculative Stock of the Day: Patrys Limited (PAB) +12.24% last weeks momentum continuing on news of potential for brain cancer treatment.
  • Biggest Winners: JIN, HMC, LFG, APT, MP1, ALU and FLN.
  • Biggest Losers: CDA, TLX, SPL, VUL, CHN, ALK, LTR.

TODAY

  • Silver Lake Resources (SLR) –0.91% To resume full operations at its Daisy Complex.
  • Iluka Resources (ILU) –2.14% Understood to be looking at selling its Rutile operations in Sierra Leone. Trade press reports point to a tightening in mineral sands markets and that Iluka may be able to increase zircon pricing by ~$125/tonne in its next round.
  • Bank of Queensland (BOQ) -4.98% Obtains approval from the treasurer for the previously announced acquisition of ME Bank.
  • CBA (CBA) -5.46% To sell its general insurance business to Hollard Group for $625m.The transaction will also include earn-out payments, payable upon achieving certain milestones. The transaction is expected to deliver $400m of CET1 capital resulting in a proforma uplift of 9bps, the transaction will also result in a post-tax gain on sale of ~$90m.
  • Mayne Pharma (MYX) -4.29% Licenses Australian rights to SOLARAZE gel and ACTIKERALL from Almirall.
  • Boral (BLD) +1.33% To sell its North American Building Products business to Westlake Chemical subsidiary for $2.9bn. The board will assess options to distribute surplus capital. As part of the review of Boral’s North American Fly Ash business Boral is continuing to explore value creation opportunities through a potential joint venture, strategic alliance, divestment to a third party or continued ownership of the Fly Ash business.
  • Sezzle (SZL) -1.82% A Twitter livestream that outlined a case to short Sezzle highlighted “co-marketing expenses” that could require the company to make extra payments if it fails to reach certain milestones.
  • Vicinity Centres (VCX) –1.21% Reports a preliminary net valuation decline of 1.2% for the six months ending June 30, for its 60 directly-owned retail properties. Proposes interim dividend of 6.6cps. The full-year distribution of 10c is expected to be towards the lower end of its policy range of 95% to 100% of Adjusted Funds From Operations.
  • AusNet Services (AST) -2.19% A review is being progressed as a priority to determine, among other things, the extent of employee (both current and former) underpayments. That said, remediation costs are not anticipated to have a material impact on FY22 financial performance.

ECONOMIC NEWS

  • Back to the Future: Barnaby Joyce back as leader of the Nationals.
  • Retail turnover rose 0.1% in May 2021, seasonally adjusted, according to preliminary retail trade figures released today by the ABS. Ben James, Director of Quarterly Economy Wide Surveys, said: “There were mixed results across the industries and states and territories, with COVID-19 restrictions in Victoria impacting the May result. Victoria fell 1.5% as the state entered its fourth lockdown on May 28 with trade restricted for physical stores.”

BOND MARKETS

CV19 NEWS

  • Vaccine Tracker: 2.62bn doses in 180 countries. 39.7m doses a day. In the US, 318m doses at 1.24m a day. In Australia, 103,040 doses a day. 10 months to get to 75% of the population.
  • Shenzhen is tightening restrictions on public transit and at the airport, as nearly 40 inbound passengers tested positive for Covid.
  • Russia, Germany and Portugal reported a rise in numbers in the highly transmissible delta variant that first appeared in India.
  • Canada’s border chief says US – Canada border unlikely to be opened until 75% of Canadians become interesting.
  • Some of Japan’s biggest private employers will offer in house vaccinations starting Monday.
  • Qatar will require full vaccination for fans at the 2022 World Cup.

ASIAN NEWS

  • HSBC sells French business for EUR1. Takes a US$2.3bn hit.

US AND EUROPEAN HEADLINES

  • European markets expected to open around 1% lower on US leads.
  • Bidding war looms for UK supermarket group Morrisons.
  • CAPE Valuations in US are at 36.4 times. Twice the long-term average over last 40 years. Highest since 1881.
  • Worse drought in a century hits Brazil.
  • Record low turn out in French local elections.
  • 41,000 people have signed a petition to refuse Jeff Bezos a return to Earth.

And finally….



IN THE FIFTIES

Pasta was not eaten in Australia or N.Z.

Curry was a surname. 

A takeaway was a mathematical problem.  

A pizza was something to do with a leaning tower.   

All potato crisps/chips were plain; the only choice we had was whether to put the salt on or not. 

Rice was only eaten as a milk pudding.

Calamari was called squid and we used it as fish bait.

A Big Mac was what we wore when it was raining.

Brown bread was something only poor people ate.

Oil was for lubricating, fat was for cooking.    

Tea was made in a teapot using tea leaves and never green.

Sugar enjoyed a good press in those days, and was regarded as being white gold. Cubed sugar was regarded as posh.  

Fish didn’t have fingers in those days.  

Eating raw fish was called poverty, not sushi.

None of us had ever heard of yoghurt.

Healthy food consisted of anything edible.

People who didn’t peel potatoes were regarded as lazy.

Indian restaurants were only found in India.   

Cooking outside was called camping.

Seaweed was not a recognized food.

“Kebab” was not even a word, never mind a food.  

Prunes were medicinal.

Surprisingly, muesli was readily available, it was called cattle feed.

Water came out of the tap. If someone had suggested bottling it and charging more than petrol for it,
they would have become a laughing stock!!

Clarence

XXX