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

 

ASX 200 down 14 to 6161 after a slight rally spared some blushes. US futures down 65. The impetus to chase stocks higher has disappeared as forecast after forecast, data set after data set is screaming an economy slowing. Consumer confidence falling together with house price expectations took their toll. Banks once again in the seller’s sights with some profit taking in resources despite stronger commodity prices. The Big Bank Basket fell to $151.64 with WBC the biggest loser down 0.7%. RIO was the big loser in the miners down 0.2% whilst BHP and S32 held up better. Energy stocks ran out of puff with WPL down 1.3%. APX +5.1% bounced after its dismal day yesterday as indigestion fades. SIG -12.3% and API -3.57% fell heavily after SIG knocked back its suitor and has decided to go it alone. API has a large stake and could drop its 12% holding in the company. AUD steady at 70.55c. Steady.

Today’s Highlights

  • ASX 200 down 14 to 6161.
  • High 6175 Low 6127. First four losing days since December 2018.
  • Banks under pressure again. Miners join sell-off but off lows.
  • Defensives in demand.
  • CSL goes Ex. Energy runs out of buyers.
  • Industrials drift on low volumes.
  • AUD falls slightly to 70.56c
  • Bitcoin firms to US$3865
  • Aussie Gold rises to $1849
  • US futures down 63
  • Asian markets weaker with Japan down 1.36% and China down 0.54%

STOCKS

  • APX +5.10% indigestion wears off.
  • PME +5.89% good move thin volume though.
  • SM1 +1.88% results next week could run into them.
  • SAR +5.24% gold producers rally.
  • PPT +4.13% buying resumes.
  • SIG -12.30% API – 3.57% gets the brush off.
  • SYD -0.41% Boeings grounded.
  • BAL -3.38% profit-taking.
  • NCM +2.98% broker optimism.
  • CYB -2.41% Brexit optimism wears off.
  • VAH -2.50% Boeings grounded. An order under review.
  • SPT -19.75% emperors clothes slip.
  • OEL -13.85% drilling results on Winx. No winner here.
  • BWX -5.26% turns back down again.
  • MWY +4.71% gets a broker upgrade. Thin volume.
  • KGN -1.65% excitement in small caps fading fast.
  • RED +13.04% new results at King of the Hills.
  • WSA +2.26% corporate presentation.
  • NHC +4.28% New Acland stage 3 amendment granted
  • Speculative Stock of the Day: YOW +21.43% a takeover bid from KBC helped at 9.2c. The key attraction for KBC is the huge pile of cash that YOW is sitting on and in USD. Plenty of reasons to look at this one in coming days. Good volume. YOW has rejected the bid but then it would.
  • Biggest Rises: PME, SAR, APX, IFM, NHC, PPT and NCM.
  • Biggest falls: SIG, CDD, ING, ABC ,API and IMF.

TODAY

  • GPT Group (GPT) –0.64% Has agreed to sell its 50% stake in the MLC Centre in Sydney’s CBD for $800m to Dexus (DXS). GPT has reaffirmed FY19 guidance of 4% growth in both distributions per security and funds from operations.
  • Yowie (YOW) +21.43% The company has received a bid from Keybridge Capital for 9.2c in cash or a combination of cash and notes depending on the level of acceptances. YOW has told shareholders to take no action.
  • Sigma (SIG) -12.30% Australian Pharmaceutical (API) –3.57% API has reconfirmed its highly conditional bid for SIG of 23c and 0.31 shares in API. The board though has rejected the bid as inadequate and has instead focussed on its strategic review and the cost savings program together with the release of $300m in working capital as the MC/CW contract expires. **API has now released its reply. Noted the rejection and has closed its own data room noting the synergy benefits that would have flowed. It has said it is reviewing its shareholding in SIG**.
  • Corporate Travel (CTD) +0.99%% confirms it has made an unsolicited approach and had early stage discussions with Capita PLC to purchase its travel business. No certainty of it going forward or even if terms can be agreed. Nothing contemplated this financial year.
  • Kathmandu (KMD) -2.12% is investigating a security breach on its website.Between 8th January and 12th February, an unknown third party seemed to have access to its platform. Third party scammers may have captured customer personal information and payment details. Not a good look and will hurt the share price.

ECONOMIC NEWS

  • The Westpac-Melbourne Institute index for consumer confidence fell 4.8% to 98.8 in March from 103.8 in February. Pessimists again outnumber the optimists.
  • The index was weighed down by the soft economic growth numbers last week, which showed GDP slowing to a 1% annual pace over the second half of 2018.
  • Westpac MI’s Index of House Price Expectations declined a further 2.7% to 85.4 in March, marking a new record low since compiling this index first in 2009.
  • The Westpac-Melbourne Institute Unemployment Expectations Index recorded an 8.9% jump, indicating more consumers expect unemployment to rise in the year ahead.

BOND MARKETS

  • 2-Year bond yields fall 6bps to 1.59%
  • 5-Year yields fall 6bps to 1.60%
  • 10-Year yields drop 7bps to 1.96%

ASIAN NEWS

  • South Korean unemployment eases from a 9–year high.
  • Japanese core machine orders fell at the fastest rate in four months in January

EUROPEAN AND US NEWS

  • FBI is pursuing rich parents over college admission bribes.
  • Suspect the US will ground 737 Max 8’s tonight.
  • Brexit vote beckons. Again. When will it end?
  • Israel’s third-largest bank has agreed to pay $195m to the US after admitting it helped American taxpayers hide their wealth from the tax authorities.
  • Chart of the week from BlackRock. Suggests small-cap rally not worth chasing.
  • Won’t affect your morning latte price but global coffee prices have plunged recently to their lowest level since 2006. Massive surplus continues and despite production cuts, it is not making a dent. Top supplier Brazil keeps churning out more beans, helped by currency devaluation, at a time when higher-cost producers like Colombia, Costa Rica and Peru are struggling after prices sank below US$1 a pound.
  • Nissan UK will cease production of its Infiniti car in Sunderland.
  • Dominos UK has warned of slower store openings and franchisees have demanded a larger share of the stuffed crust. Given that an inquiry into the franchise sector winds up here soon, it may slow down DMP locally too. The international arm of UK business needs a ‘sharper operational focus’.

And finally………….

Three highly decorated police officers die in a wild shoot out with narcotics dealers and go to heaven.

God greets them and asks, “When you are laid out in your casket, and your fellow officers and family are mourning you, what would you like to hear them say about you?

The first cop says, “I would like to hear them say, that I was the bravest cop on the force.”

The second police officer says, “I would like to hear that I was a terrific cop who died in the line of duty.”

The last cop replies, “I would like to hear them say … Look, He’s Moving!”

A newlywed couple moves into their new house.

One day the husband comes home from work and his wife says, “Honey, you know, in the upstairs bathroom one of the pipes is leaking, could you fix it?” The husband says, “What do I look like, Mr. Plumber?”

A few days go by, and he comes home from work and his wife says, “Honey, the car won’t start. I think it needs a new battery. Could you change it for me?” He says: “What do I look like, Mr. Goodwrench?” Another few days go by, and it’s raining pretty hard. The wife finds a leak in the roof. She says, “Honey, there’s a leak on the roof! Can you please fix it?” He says, “What do I look like, Bob Vila?”

The next day the husband comes home, and the roof is fixed. So is the plumbing. So is the car.

He asks his wife what happened. “Oh, I had a handyman come in and fix them,” she says. “Great! How much is that going to cost me?” he snarls.

Wife says: “Nothing. He said he’d do it for free if I either baked him a cake or slept with him.” “Uh, well, what kind of cake did you make?” asks the husband.

“What do I look like,” she says, “Betty Crocker?”

Clarence

XXXX

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Financial Markets and Political Commentary
 

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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