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

 

ASX 200 rallies off lows to close down 24 at 6180 in holiday trade. US Futures down 86. Victorian public holiday keeps volumes only slightly subdued. Banks shrugged off early weakness to lend some support. ASIC says banks not ‘sorry’ enough. WBC up 0.15% leading a slight rebound. Energy shares under pressure as Norges Bank looks to reduce exposure and crude falls. Publishes list of energy stocks it will sell over time. Big miners under some pressure on  3.5% iron ore falls in Asia,  BHP down 1% and RIO down 0.7%. Extraordinary move in PPT on potential M&A being suggested. Gold producers do well on bullion and stronger USD. NCM makes a Canadian acquisition up 4%. AUD firms to 70.41c.

Today’s Highlights

  • ASX 200 down 24 to 6180 as ECB warnings weigh.
  • High 6198 Low 6172
  • Energy stocks fall on Norges news and oil falls.
  • Bank turn positive in mid-afternoon. Lose momentum at close.
  • Dalian iron ore down 3.5% in Asia.
  • Norges Bank names stocks to sell. ESG investing.
  • AUD rises to 70.41c
  • Bitcoin weaker at US$3902
  • Aussie Gold firms to $1843
  • US futures down 86
  • Asian markets bounce with Japan up 0.5% and China up 1.22%

STOCKS

  • SPT +2.88% ASX query kills the rally.
  • PPT +12.27% no news at all. M&A maybe?
  • CVN +6.98% Investor presentation.
  • SAR +5.45% EVN +4.30% GOR +2.87% gold in demand.
  • PAN -14.13% capital raising.
  • KGN -6.00% fizz leaves sector.
  • DUB +6.01% results continuing to power shares.
  • WOR -4.18% energy woes weigh.
  • IVC -2.79% capital raise.
  • BIN -4.97% selling resumes.
  • AAC – unchanged – updates QLD flood impact.
  • PDL -1.24% big volume no new news.
  • SDA -2.64% heading back down again.
  • Speculative Stock of the Day: Verdant Minerals (VRM) +106.67% takeover bid at 3.2c. by SOL.
  • Biggest Rises: PPT, SBM, CVN, RSG, SAR and HUB
  • Biggest falls: BIN, WOR, LYC, MP1, PGH and HM1.

TODAY

  • Newcrest Mining (NCM) +3.80% The company has acquired a Tier 1 asset in Canada as more M&A activity in the gold sector gets underway. NCM will acquire 70% of the Red Chris mine from Imperial Metals for US$806.5m. Transaction completed by Q3 CY19. To be funded by cash and undrawn bank facilities. The Red Chris has 20Moz of gold mineral resources and 13Blbs of copper resources. Looks like it is leveraging its block caving techniques now it has got the formula right. Expect more M&A in the sector.
  • Appen (APX) shares are in trading health pending the acquisition of San Francisco based company Figure Eight Technologies with an initial cost of $175m and a US$60-80m earnout. The company is also looking to raise $285m at 2150c per share through an institutional placement, and $15m through a share purchase plan.
  • Norges Bank published a list of energy stocks it will sell includes: BPT, CTX, STO, SEA, WPL, ATS, COE, HZN, KAR, and OSH.

ECONOMIC NEWS

  • RBA research has suggested that interest rate cuts drove up house prices. Der! Bit obvious. RBA chief believes that supply and demand prices. Wrong. It the rates stupid. The RBA team have also warned that the falls in housing have the potential to morph into something more worrying a la US subprime crisis. Sydney house prices have fallen at the fastest rate since 1982.

BOND MARKETS

  • 2-Year bond yields unchanged to yield 1.65%
  • 5-Year yields unchanged at 1.66%
  • 10-Year yields unchanged to yield 2.03%

ASIAN NEWS

  • Hong Kong’s stock exchange and MSCI have agreed to launch futures contracts on the A-share portion of the global index provider’s flagship Emerging Markets index.
  • Goldman Sachs says that FOMO could lift Chinese stocks by 50% after a pause to refresh. It suggests improving risk sentiment and lack of investor participation in the earlier rally as fuel for further gains. Risk appetite has increased dramatically according to Goldman.
  • Most investors Goldman spoke to saw a 5% to 10% “retracement from the recent highs as a sensible level to re-engage,” according to the report.
  • The worlds biggest election is underway. India is going to the polls on May 23rd as Modi asks for a second term.

EUROPEAN AND US NEWS

  • Expect Boeing to be under pressure following new Ethiopian airlines crash. Two recently for 737-8. China has grounded all 737-8s as has Ethiopia.
  • Another US government shut down looms as Trump asks for US$8.6bn for the border wall in the latest budget.
  • Pressure is mounting on Theresa May to quit to enable the Brexit vote to get over the line.
  • EU is looking at charging the UK more for its divorce if it pushes the deadline out beyond 29th March. 18 days to go. Looks more like Thelma and Lousie every day.
  • Deutsche Bank is exploring a merger with Commerzbank as low-interest rates bite into business.
  • Fed chair reveals his biggest fear and it isn’t spiders. He is most concerned about the cyber threat to the global banking system. 60 Minutes interviewed his view that the US Opiod crisis is wiping out a generation of younger workers and hitting participation rates. He also said he is sticking around for 4-years and cant be sacked by Trump.

And finally…thanks to my buddy Hans for this true but overlooked past…

Checking out at the supermarket, the young cashier suggested to the
much older woman, that she should bring her own grocery bags because plastic bags weren’t good for the environment.

The woman apologised and explained, “We didn’t have this ‘green
thing’ back in my earlier days.”

The young cashier responded, “That’s our problem today – your
generation did not care enough to save our environment for future
generations.”

She was right — our generation didn’t have the ‘green thing’ in its
day.

Back then, we returned milk bottles, lemonade bottles and beer
bottles to the shop. The shop sent them back to the plant to be washed and sterilised and refilled, so it could use the same bottles over and over. So they really were recycled.

But we didn’t have the “green thing” back in our day.

Grocery shops bagged our groceries in brown paper bags, that we re-used for numerous things, most memorable besides household bags for rubbish, was the use of brown paper bags as book covers for our schoolbooks. This was to ensure that public property (the books provided for our use by the school), was not defaced by our
scribblings. Then we were able to personalise our books on the brown paper bags.

But too bad we didn’t do the “green thing” back then.

We walked up stairs, because we didn’t have a lift in every
supermarket, shop and office building. We walked to the local shop and didn’t climb into a 300 horsepower machine every time we had to go half a mile.

But she was right. We didn’t have the “green thing” in our day.

Back then, we washed the baby’s Terry Towel nappies because we didn’t have the throwaway kind. We dried clothes on a line, not in an energy-gobbling machine burning up 3 kilowatts wind and solar power really did dry our clothes back in our early days.. Kids had hand-me-down clothes from their brothers or sisters, not always brand-new clothing.

But that young lady is right; we didn’t have the “green thing” back
in our day.

Back then, we had one radio or TV in the house – not a TV in every
room and the TV had a small screen the size of a big handkerchief
(remember them?), not a screen the size of Scotland In the kitchen. We blended and stirred by hand because we didn’t have electric machines to do everything for us. When we packaged a fragile item to send in the mail, we used wadded up old newspapers to cushion it, not Styrofoam or plastic bubble wrap. Back then, we didn’t fire up an engine and burn petrol just to cut the lawn. We pushed the mower that ran on human power. We exercised by working so we didn’t need to go to a health club to run on treadmills that operate on electricity.

But she’s right; we didn’t have the “green thing” back then.

We drank from a tap or fountain when we were thirsty instead of using a cup or a plastic bottle every time we had a drink of water. We
refilled writing pens with ink instead of buying a new pen, and we
replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull.

But we didn’t have the “green thing” back then.

Back then, people took the bus and kids rode their bikes to school or
walked instead of turning their Mums into a 24-hour taxi service in the family’s $50,000 People Carrier which cost the same as a whole house did before the “green thing.” We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances and we didn’t need a computerised gadget to receive a signal beamed from satellites 23,000 miles out in space in order to find the nearest Pub!

But isn’t it sad that the current generation laments how wasteful we
old folks were just because we didn’t have the “green thing” back
then?

We don’t like being old in the first place, so it doesn’t take much
to piss us off…especially from a tattooed, multiple pierced smartarse
who can’t work out the change without the cash register telling them
how much it is!

Clarence

XXXX

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Financial Markets and Political Commentary
 

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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