ASX 200: Henry Jennings, Australian Market Rap. Headlines, Stocks & Sectors, Bonds, Economic & Asian Market News – END of DAY REPORT.

 

Todays Highlights

The ASX continues to grind higher closing on a high as it cycles through different sectors every day. Today was all about IT and Industrials with the financials chipping in. Resources under a little pressure but then they have led the rally so far since Xmas. Low volumes again but momentum is building.

  • ASX 200 up 21 points to 5835 as conviction builds.
  • High 5835 Low 5805. Subdued volume again. Roll on Australia Day.
  • Brexit? What Brexit. May Day today. Sterling rallies.
  • Banks remain firm with industrials in favour.
  • Consumer stocks rally.
  • Resources slip as stimulus details scarce.
  • Gold producers under pressure. Energy stocks go sideways.
  • Consumer confidence drops below 100. Economists blame the Cricket.
  • AUD steady around 72.0c
  • Bitcoin weaker at $3592
  • Aussie Gold steady at $1790
  • US futures up 47
  • Asian markets hit the sell button on profit-taking Japan down 0.57% and China down 0.09%

STOCKS IN FOCUS

  • ALL +2.31% bucks US internet gambling ban.
  • SYR +2.78% third day of rises following Balama update.
  • ASL +8.51% rethionk following CFO resignation.
  • NEA +7.14% tech shares in demand.
  • IVC +4.86% heat brings positives for the death industry.
  • PFP +8.06% every degree helps.
  • APX +4.42% tech rally in US helping.
  • REA +3.00% technical buying on MT trading idea.
  • RRL -2.44% NST -1.98% and SBM -2.72% gold producers slip off highs.
  • NGI -6.25% AUM update.
  • EXL -11.55% profit-taking sell-off.
  • BIN +7.39% rally gaining momentum.
  • Speculative stock of the day: Fast Bricks (FBR) +32.53% Nothing specific but good volume and finding support.
  • Biggest Risers – ASL, BIN, PNI, NEA, IVC and APX
  • Biggest Fallers – ILU, WGN, AWC, LYC, IGO and ORE

TODAY

  • Michael Hill (MHJ) –3.33% Provide a trading update. Group revenues for continued operations increased by 2.9% while same-store sales lifted by 1.3% over the Christmas period compared to last years. The gross margin through the first half of FY19 was maintained at 62.7%, matching that of FY18 despite the increased cost of goods due to the softening of the AUD against the USD. Six new stores opened and three poor-performing stores closed in the period.
  • Navigator Global Investments (NGI) +6.25% In line with the other funds that have given updates in the last couple of days the company has seen a drop in total assets under management of 8.8% in the December 2018 quarter, going from $USD 16.14bn to $USD 14.72bn. Of the 1.42bn loss 0.74bn is attributed to net flows and 0.68bn to market performance.
  • Our major banks are setting up for the possible fallout from Brexit, establishing subsidiary offices across Europe to ensure they can continue to effectively operate through Europe.
  • IOOF Holdings (IFL) +0.54% Substantial holder Primero Group Limited have increased their holdings and now holds a voting power of 8.95%.

ECONOMIC NEWS – – Some alarm bells ringing for the RBA

  • The Westpac-MI index fell 4.7% to 99.6, the first sub-100 result since November 2017.
  • The Index is down 5.3% compared to this time last year.

BOND MARKETS

  • 2-Year bonds down 1bps to yield 1.81%
  • 5-Year yields  down 2bps to yield 1.94%
  • 10-Year yields down 1bps to yield 2.27%

ASIAN MARKETS

  • More rats deserting the much hyped Xiaomi recent IPO with a near US$100bn valuation suggested at one stage. An undisclosed investor sold 231m Class B shares a 5.1% discount to the Tuesday close. It is now the biggest IPO flop. Halving from its initial opening valuation from US$61bn to US$31bn

EUROPEAN AND US HEADLINES

  • Many column inches will be devoted to the next step in Brexit. It’s a mess. Markets are sanguine as delay now seems inevitable. Maybe an election even. May faces no-confidence vote which she should win. No one has a plan B except Baldrick perhaps. The biggest question is why May continues?
  • The biggest vote against a government on record. Even higher than the 166 vote defeat of the UK Labour party in 1924 and that was a big year.
  • Market believes a ‘push the can down the road’ or new referendum is now likely.
  • The US Trade Representative (USTR) may apply exclusions for some importers and products if the talks on trade tariffs fail. If duties “would cause severe economic harm” to the company or U.S. interests, and whether the item is strategically important seems to be the criteria for potential carve-outs. Chinese Vice Premier Liu He is set to visit Washington on Jan. 30-31 for further trade talks. The current shutdown is not helping speed the exclusion list along.
  • The US IRS has asked its 46,000 workers to work without pay to handle refunds as the shut down continues.
  • Netflix has lifted prices by around 18% in the US. Coming soon to a subscription near you. Plus looking at how we share our passwords. That is going to stop too.

And finally…………..

There was an elderly couple who in their old age noticed that they were getting a lot more forgetful, so they decided to go to the doctor.

The doctor told them that they should start writing things down so they don’t forget.

They went home and the old lady told her husband to get her a bowl of ice cream. “You might want to write it down,” she said.

The husband said, “No, I can remember that you want a bowl of ice cream.”

She then told her husband she wanted a bowl of ice cream with whipped cream. “Write it down,” she told him, and again he said, “No, no, I can remember: you want a bowl of ice cream with whipped cream.”

Then the old lady said she wants a bowl of ice cream with whipped cream and a cherry on top. “Write it down,” she told her husband and again he said, “No, I got it. You want a bowl of ice cream with whipped cream and a cherry on top.”

So he goes to get the ice cream and spends an unusually long time in the kitchen, over 30 minutes. He comes out to his wife and hands her a plate of eggs and bacon. The old wife stares at the plate for a moment, then looks at her husband and asks, “Where’s the toast?”

Maria, a devout Catholic, got married and had 15 children.

After her first husband died, she remarried and had 15 more children. A few weeks after her second husband died, Maria also passed away.

At Maria’s funeral, the priest looked skyward and said, “At last, they’re finally together.” Her sister sitting in the front row said, “Excuse me, Father, but do you mean she and her first husband, or she and her second husband?” The priest replied, “I mean her legs.”

Clarence

XXXX

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About the author

Henry Jennings Contact: henryjennings@mac.com // @henryj007 Has been involved in Investment Banking and Stockbroking since the early 1980's. Stockbroker - Camerons Stockbroking Macquarie Bank - Equity Capital markets Macquarie Group - Divisional Director