ASX 200 down 17 points to 7466 (0.2%) After the party comes the hangover.
- HIGH 7496 LOW 7455 RBA meeting surprises with a cut and paste job.
MAJOR MOVERS: Winners: APT, AVZ, Z1P, 88E, CHN, RSG Losers: PAR, PBH, MYX, WHC, KAR, CEN
- POSITIVE SECTORS: Tech (BNPL)
- NEGATIVE SECTORS: Banks – Miners – Industrials
- BIG BANK BASKET: Weaker at $180.60
- ALL -TECH INDEX: Up 2.9%. APT really
- GOLD: Slips to AUD $2447
BITCOIN: US$38262. Slipping slightly
- AUD: Better at 73.95c. 10-YEAR YIELD: 1.15% RBA stays pat
- ASIAN MARKETS: Japan down 0.46%. HK down 0.30%. China down 0.23%
- US FUTURES: Dow futures up 120. NASDAQ up 30
ASX 200 falls 17 to 7475 (-0.23%) as some caution creeps in. A negative US lead and still high numbers of cases in NSW not helpful and RBA news was no change from previous months which did surprise some. Banks under pressure with the Big Bank Basket down to $180.60. Big miners also in the doghouse on iron ore falls. BHP down 1.4% and FMG off 1.6%. Energy stocks sold down and industrials were mildly sold off. TLS down 0.3% and TCL down 1.0%. Tech stocks were better led by APT (Square) up 11.4% and the others in the sector feeling the love. Z1P short position helping the non-believers squirm. The stock rose 7.5% with the All-Tech Index up 2.9%. In corporate news, CWN is up 1.7% with CEO Xavier Walsh to step down as the casino lodges its closing submissions with the Victorian Royal Commission. BKW up 0.6% to acquire assets of US-based Southfield Corp for $70m. COE firmed 4.4% on its July update. CCP up 0.2% on its full-year numbers, sees EPS in FY22 between $1.26-1.41. QAN down 0.9%, temporarily stands down 2,500 employees on the back of COVID headwinds. Weekly consumer confidence edged 1.1% higher last week as the lockdowns in Victoria and South Australia ended.
STOCKS ON THE MOVE
- APT +11.37% now a function of Square.
- Z1P +7.46% Silver medal position.
- CHN +6.84% Diggers and Dealer presentation.
- EML +4.35% BNPL effect.
- MCR +3.94% Diggers and Dealer presentation.
- PAR -11.26% application update.
- PBH -11.23% ex rights. TERP 1088c.
- PPK -3.93% Supply and distribution agreement for BNNT.
- SPL -3.31% still under pressure.
- KAR -5.26% oil price weakness.
- MYX -5.97% class action proceeding.
- RHI -5.17% profit-taking after a huge rise on MIN deal.
- IOU +27.91% BNPL effect.
- AIS +14.29% drill results.
- WBT +10.24% do you want chips with that.
- OPY +8.94% LBY +10.53% BNPL lift
- MAQ+7.77% 5,000 shares traded.
- EVN –3.28% Diggers and Dealers presentation.
- Speculative Stock of the Day: Parkd (PKD) +45.95% signs a binding HOA with Axiom Properties. It will develop and construct car parks nationally. Should sign one with the federal government. Good volume. Tiny market cap. Recent placement at 5c.
- BHP Group (BHP) -1.38% Workers at Chile’s La Escondida copper mine vote to reject the most recent BHP contract offer and go on strike.
- Zip Co (Z1P) +7.46% There is renewed speculation US-based Klarna is looking at Z1P as a takeover target following Square’s bid for APT.
- Crown Resorts (CWN) +1.68% Said it has not identified any underpayments of casino tax other than the $61m to the State Government announced on July 27. CEO Xavier Walsh, said he will step down as CWN lodged its written closing submissions with the Victorian Royal Commission.
- Brickworks (BKW) +0.57% To acquire assets of Southfield Corp for $70m.Assets include Illinois Brick Company (IBC), the largest independently owned and operated brick distributor in the US. BKW notes that the transaction will be funded by existing debt facilities and expected to deliver +2% EPS accretion.
- Credit Corp. Group (CCP) +0.18% Full-year profit $88.1m vs consensus $88.6m.Revenue $374.8m vs consensus $384.4m. Final Dividend 36.0cps, fully franked. EPS $1.31 vs guidance $1.26-1.34. In FY22 sees purchased debt ledger acquisitions between $200- $240m and EPS in the range of $1.26-1.41.
ECONOMIC NEWS/ BOND MARKETS
RBA keeps rates on hold
At its meeting today, the Board decided to:
- maintain the cash rate target at 10bpsand the interest rate on Exchange Settlement balances of 0%
- maintain the target of 10 basis points for the April 2024 Australian Government bond
- continue to purchase government securities at the rate of $5 billion a week until early September and then $4bn a week until at least mid-November. A slight surprise given the Sydney lockdowns.
Observed recent outbreaks are interrupting the recovery and GDP is expected to decline in the September quarter. The Bank’s central scenario is for the economy to grow by a little over 4% over 2022. This scenario is based on a significant share of the population being vaccinated by the end of this year.
- Weekly consumer confidence edged 1.1% higher last week as the lockdowns in victoria and South Australia ended.
- The seasonally adjusted estimate for total dwellings approved fell 6.7% in June.
- Private sector houses fell 11.8%, while private sector dwellings excluding houses rose 0.8%.
- The value of non-residential building approved fell 3.0%.
In June 2021, new loan commitments (seasonally adjusted):
- fell 1.6% for housing vs estimates of a 2% rise
- Owner-occupier loan value fell 5% vs estimates of a flat reading
- Investor loan value rose 0.7% vs estimates of an 8.0% rise
IN THE NEWS
- The RBNZ is intending to further restrict access to mortgages to help rein in the huge house price rises. It plans to reduce the amount of low-deposit lending banks can make from Oct. 1, and will also consider introducing debt-to-income limits and/or interest-rate floors later this year
- Vaccine Tracker: 4.16bn doses on 180 countries. 42m a day.
- In Australia, 168,921 doses a day. 5 months to get to 75%.
- China reported 61 confirmed Covid-19 cases and 23 asymptomatic infections on Tuesday.
- Peter Marks, head of the U.S. FDA’s division reviewing Pfizer application for full approval of its vaccine. Moving with urgency to reach a decision.
- Senator Lindsey Graham said he tested positive for Covid-19. He had been vaccinated.
- 70% of U.S. adults have received at least one dose of a Covid-19 vaccine a month after the Biden target.
- Tencent becomes Eightcent on another day of selling on online games being branded ‘Spiritual Opium’.
- Chinese online gaming stocks hit hard.
- Tokyo consumer prices unexpectedly rose for the first time in a year. Prices in Japan’s capital, excluding those for fresh food, ticked up by 0.1% in July. Wow. Big news.
- Mobile phone fees dropped 29%, shaving 0.5% from the overall index.
- The BOJ last month reiterated it sees prices drifting up, but it still doesn’t expect inflation to reach its 2% target anytime before 2024.
US AND EUROPEAN NEWS
- Sanofi offers to buy Translate Bio.
- European futures showing a slight loss at the opening.
- Soc Gen and Standard Chart results out in Europe. Buy backs and resumption of dividends.
- IMF warns on crypto ahead of El Salvador launch.
- IMF allocates US$650bn to boost pandemic hit.
My friend thinks he is smart. He told me an onion is the only food that makes you cry, so I threw a coconut at his face.
Reaching the end of a job interview, the Human Resources Officer asks a young engineer fresh out of the Massachusetts Institute of Technology, “And what starting salary are you looking for?” The engineer replies, “In the region of $125,000 a year, depending on the benefits package.” The interviewer inquires, “Well, what would you say to a package of five weeks vacation, 14 paid holidays, full medical and dental, company matching retirement fund to 50% of salary, and a company car leased every two years, say, a red Corvette?” The engineer sits up straight and says, “Wow! Are you kidding?” The interviewer replies, “Yeah, but you started it.”