The ASX 200 falls 19 points to 7281 (0.3%) after banks ease slightly and nerves continue over Chinese property companies. The Big Bank Basket slipped to $186.87, down 0.2% after WBC fell 1.7% on a hit to its balance sheet. CBA AGM tomorrow. Insurers eased back to led by QBE, but MQG managed to stay positive. MFG continued to slip lower, down 1.1%. Industrials drifted lower too with bond proxy stocks slightly weaker, TCL down 1.67% and REA off 3.47%. In healthcare, CSL rose 1.8% after a positive outlook statement at the AGM, RMD continued lower down 0.9%, and ANN slid 4.6% on a broker downgrade. Miners tried to hold the line but gave up to register slight losses, BHP down 0.3%, FMG off 1.4% and coal stocks slipping back after good gains in recent days, despite coal futures heading higher again in China. Gold miners flat-lined and oil and gas stocks sold down slightly on profit-taking despite higher oil prices. Travel stocks eased back to with QAN down 1.1%, FLT off 1.3% and WEB falling 2.4%. Tech stocks eased as yields rose, APT down 2.7% and All Tech Index down 1.5%. In corporate news, DDH announced a takeover for SWK in an all-scrip affair, ERA updated the market on uranium production and fell 3.7%. PDI had a shocker today as it replied to some media speculation, not even out yet, on issues with its mining leases in Guinea. The stock fell hard down 27.7%. In economic news, business confidence rebounded sharply, and consumer confidence edged higher despite lockdowns. 10-year yields continue to trundle higher and all eyes on the Chinese property companies still.
- Winners: EHL, CMM, ASM, SGM, PRU, AWC, PSI, ADT, MAF.
- Losers: DEG, FFX, SZL, ANN, YAL, DUB, PXA, OML.
- Positive sectors: None.
- Negative sectors: Tech. Banks. Miners. Energy.
- High 7330 Low 7260.
- Big Bank Basket: Slightly lower at $186.87(0.2%).
- All-Tech index: Down 1.5%. APT down 2.7%.
- Gold: Eases to AUD2395.
- Bitcoin: Drifts lower to US$56772.
- Aussie Dollar: Higher at 73.53c.
- 10-YEAR YIELD: Higher again at 1.72%.
- Asian Markets: Japan down 0.63%. Hong Kong down 0.98%. China down 1.06%.
- US Futures: Dow futures down 93. NASDAQ futures down 51.
STOCKS ON THE MOVE
- EHL +7.21% SWK takeover may be helping.
- AWC +4.19% aluminium prices higher.
- IEL +3.21% reopening trade.
- TEK +3.57% NTA 51.8c.
- CSL +1.80% AGM comments.
- SZL -5.13% profit taking.
- FFX -5.60% good run yesterday slipping today.
- ERA -3.70% uranium production updater.
- SGM +4.62% initial director’s interest.
- GRR -3.33% iron ore slippage.
- DUB -4.29% tech stocks under pressure.
- YAL -4.61% coal stocks profit taking.
- PDI -27.66% media reports question marks over mining leases.
- NVA -10.53% ceasing to be a substantial holder.
- WGO -11.76% selling on reserves announcement from yesterday
- TCL -1.67% higher bond yields.
- IPO of the Day: Minerals260(MI6) +20.00% decent volume. Spin off from Liontown Resources (LTR). The company owns 100% of the Moora Gold-PGE-Nickel-Copper Project (Moora Project), an option to earn a 51% of the Koojan Gold-PGE-Nickel-Copper Project (Koojan JV Project), the Dingo Rocks tenement (Dingo Rocks Project) and tenement applications at Yalwest.
- Speculative Stock of the Day: Nothing significant.
IN THE NEWS
- Energy Resources Australia (ERA)said there was no uranium oxide production in Q3 due to regulation by the Ranger Authority. ERA will continue to sell its existing uranium oxide stocks into the market, with expected contract sales of 1.37m pounds in 2021 and the remaining inventories to be sold into the spot market.
- WBC have announced $1.3bn worth of ‘notable items’ (impairment charges after tax) that will impact the second half earnings number.The main portion ($965m) is related to thewrite-down of assets like goodwill and capitalised software. $172m relates to customer refunds and payments associated with litigation. Items are estimated to reduce the group’s CET1 capital ratio by around 15bps. The bank is scheduled to report full-year results on November 1, and was expected to post a cash profit of ~$6.5bn before today’s announcement.
- CSL repeats FY22 profit guidance of $2.15-2.25bn (constant currency) at its AGM. Revenue growth to be in the range of 2 to 5% over FY21 at constant currency.
- Telstra repeats FY22 guidance at AGM. Share price pretty much unchanged. Sees underlying EBITDA between $7.0-7.3bn vs consensus $7.14bn with free cash flow after lease payments in the range of $3.5-3.9bn vs consensus $3.71bn.
- AMP appoints Patrick Snowball as Chairman of AMP Capital.
- SWK – DDH makes a bid to acquire SWK with a scrip offer of 0.297 new DDH which values it at 35c.
ECONOMIC NEWS/ BOND MARKETS
- National Australia Bank’s business confidence survey showed a strong rebound for September, up 19 points for a positive index return of 13 points. Business confidence rebounded 19pts to +13 index points in September, with NSW (up 42pts to +27 index points) and Victoria (up 16pts to +5) driving the shift, while other states fell back somewhat. There were big improvements in confidence in wholesale (up 28pts), recreation & personal services (up 26pts), and construction (up 23pts).
- Weekly consumer confidence rose 1% notching its fifth week of modest gains. The easing of restrictions in NSW adding to support. Weekly inflation expectations fell slightly but remained elevated at 4.7%.
- New Zealand posted a much smaller budget deficit than forecast for the 2020-21 fiscal year. The final deficit for the year to June 30 was NZ$4.6bn some NZ$10.6bn less than forecast in the May budget and down from a NZ$23.1bn deficit in 2020. Net debt was 30.1% of gross domestic product compared with the 34% forecast in May.
- China has started inspections of financial regulators and state banks.
- The Bank of Korea (BOK) held off from raising rates for the second time in as many months. Key rate held at 0.75%.
- Big trouble continues in China as the Evergrande issue continues to sap confidence. “Evergrande’s contagion risk is now spreading across other issuers and sectors,” JPMorgan’s analysts said.
- The deadline on the latest Evergrande debt payments has passed with holders not getting interest rate payments. As yet. Not even an apology from Evergrande. Silence. Start the clock for 30 days.
US AND EUROPEAN NEWS
- Kristalina Georgieva will remain as head of the International Monetary Fund after a review into accusations at her previous employer suggesting she pressured juniors to boost China’s position.
- Morgan Stanley is forecasting that stocks could suffer in the wake of consumer worries on inflation.
- Xmas is coming early this year as some retailers stock up the Santa sack ahead of potential supply chain issues. Rudolf could be spared a little this year.
- French President to announce more nuclear power plants. 70% of electricity in France comes from nuclear.
FAMOUS LAST WORDS
“Are you sure the power is off?”
“Don’t be so superstitious.”
“He’s probably just hibernating.”
“I can do that with my eyes closed.”
“I can make this light before it changes.”
“I wonder where the mother bear is?”
“I’ll get a world record for this.”
“I’ll hold it and you light the fuse.”
“I’m making a citizen’s arrest.”
“It’s probably just a rash.”
“It’s strong enough for both of us.”
“I’ve done this before.”
“I’ve seen this done on TV.”
“Just take whatever you want, this is a ghost town.”
“Let it down slowly.”
“Now watch this…”
“Pull the pin and count to what?”
“Rat poison only kills rats.”
“So, you’re a cannibal…”
“The odds of that happening have to be a million to one!”
“These are the good kind of mushrooms.”
“This doesn’t taste right.”
“Well, we’ve made it this far.”
“What does this button do?”
“Which wire was I supposed to cut?”
“You wouldn’t hit a guy with glasses on, would you?”