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

 

ASX 200 rises 37 to 6365 as the initial rush of blood faded into election caution. Briefly touched close to 6400 before some profit taking set in. US futures down 61 as China ramps up the rhetoric. It was a tale of two sectors today as miners soared and banks fell. FMG up 6.5% on a continuing frenzy post the special dividend. BHP too joined the fun up 2.5% and RIO up 2.1% with gold miners under some pressure as risk wanes and SBM fell 9.49% on its capital raising. Early bank strength was scuttled by news that ANZ had to ‘hold more’ capital in NZ, due to operational risk after ‘persistent failures’ in certain controls. ANZ fell 3.0% followed by WBC down 1.7%. Broad based gains with energy stocks, defensives and interest rate sensitive stocks all strong. TLS up 1.4% enjoying a renaissance together with CAR up 2.2% and REA up 4.0%. Healthcare too was in demand with COH up 2.4% and CSL up 1.7%. In corporate news, VAH fell 5.4% on an earnings downgrade due to weakening demand and high fuel costs. AUD exposed stocks did well as the dollar stayed firmly under 69c at 68.85c. NAB has now moved to call a June and August rate cut.

Todays Highlights

  • ASX 200 up 45 to 6373 after a strong push to 6400 failed.
  • High 6398 Low 6342. Average volume.
  • Election looms. For the week up 0.86%
  • Banks sag as ANZ cops a rap from the RBNZ.
  • Miners soar on commodity prices.
  • Gold producers sag a little as SBM returns.
  • Tech sector pushes ever higher.
  • AUD sags to 68.85c on the election and economic data.
  • Aussie Gold steady at $1868.
  • Bitcoin crumbles to $7321.
  • US futures down 61. China pushes back.
  • Asian markets mixed with Japan up 1.05% and China down 1.67%

STOCKS

  • ISX +24.72% AGM comments from MD.
  • WZR +12.00% on good volume. Regal goes substantial.
  • NWH +10.65% contract wins.
  • RWC +5.49% signs of US housing turnaround.
  • CIA +8.08% iron ore price
  • APX +3.79% tech sector rises.
  • 360 -3.77% trading normal settlement.
  • VAH -5.41% profit downgrade.
  • AX1 -3.29% change of director’s interest.
  • LYC -1.96% some profit taking after rising yesterday
  • CGL -39.77% shocker on earnings downgrade.
  • NTU -18.42% R&D tax update.
  • SPT -3.68% capital raising and founder sells down.
  • BWX -4.71% broker downgrades.
  • LNG -2.53% more delays die to trade war.
  • BUB -3.10% slide resumes.
  • WOW +2.21% poaches Coles executive to run Dan Murphy’s.
  • IFT launched a capital raise to fund NZ Vodafone purchase.
  • Speculative stock of the Day:Celsius Resources (CLA) +25% on an ASX query where CLA highlighted an improvement in the cobalt price and evaluating additional opportunities.
  • Biggest Risers: NWH, CIA, COE, FMG, RWC and CUV.
  • Biggest Falls: SBM, VAH, FXL, 360, AX1 and MEZ.

TODAY

  • ANZ Bank (ANZ) -3.04% has had its accreditation to model its own operational risk capital requirement revoked by the Reserve Bank of New Zealand due to persistent failure. The bank will now be required to use the standardised approach to calculate the appropriate operational risk capital. It is expected that this change will increase the minimum capital held for operation risk by around 60% to NZ$760m.
  • Virgin Australia (VAH) -5.41% trading update. FY 19 underlying earnings are expected to be at least $100m below the FY18 earnings of $64.4m, despite expecting revenue growth of 6% for the year. The drop reflects the uncertainty of trading conditions present in the domestic market and over $160m in headwinds present from fuel and foreign exchange. The company said demand has dropped in both the corporate and leisure sectors thanks to low consumer and business confidence and spending.
  • Blue Sky Alternatives (BLA) -5.13% Appoint former Crown Melbourne and Racing Queensland CFO Justine Henwood as CFO effective May 20.

ECONOMIC NEWS

  • The International Monetary Fund warned that housing markets in some of the biggest economies in the world were overvalued by as much as 12%. In the UK, the average first-time buyer’s mortgage will last for just over 29 years, the joint-longest on record. Repayments for new buyers now amount to 16.9% of their incomes, the lowest level in 14 years of data.
  • The state of the nation on election eve.

BOND MARKETS

  • 2-Year bond yields down 1bps to 1.21%
  • 5-Year yields unchanged at 1.26%
  • 10-Year yields up 1bps to 1.64%

ASIAN NEWS

  • Baidu has announced its first loss as Chinese slowdown bites.
  • Sony announced a US$1.8bn share buyback.
  • Chinese Starbucks rival, Luckin Coffee, valued at US$4bn in US IPO.
  • Yup really, China is clamping down on farmers burying pigs alive in order to control the African Swine flu epidemic. 1.13 million pigs have been culled to control the contagion, which has spread to Mongolia, Vietnam, and Cambodia and is severely damaging the US$128bn industry.

EUROPEAN AND US NEWS

  • Trump has cut tariffs. Yes, that is right he has cut the 50% tariff on Turkish steel to only 25%.
  • The US moves to ban Huawei and its affiliates. Huawei and 67 of these affiliates around the world are now on the Export Blacklist in the US.
  • Trump is hoping to avoid a war with Iran. Think we all are.
  • The Bank of Mexico held its interest rate unchanged at 8.25%.
  • UK PM agrees to name the date. Boris to stand. In fact its a cast of thousands to stand. EU elections next weekend.
  • Finally, vote early vote often. Enjoy democracy at its best.

Finally for Yourmoney viewers and myself I was greeted with a green screen today saying thanks for watching go to Sky News for Business news.

Tried Bloomberg, CNBC and now an expert on Japanese bonds but nothing much on ASX stocks..

And finally cos its the eve of the election here are some of the best quotes from Paul Keating.

Vale Bob Hawke. A legend.

On the Senate: “I would forbid him going to the Senate, to account to this unrepresentative swill over there…”

On John Howard “The little desiccated coconut is under pressure and he is attacking anything he can get his hands on”

On John Howard “What we have got is a dead carcass, swinging in the breeze, but nobody will cut it down to replace him.”

On Howard’s 1996 election campaign: “Soon we will be at the stage where he will be offering us a free set of steak knives.”
On Peter Costello: “The thing about poor old Costello is he is all tip and no iceberg.” Love this one.

On Peter Costello: “He’s the greatest L plater of all time.”

On Wilson Tuckey: “You boxhead you wouldn’t know. You are flat out counting past ten.”

On John Hewson: “(His performance) is like being flogged with a warm lettuce.”

On Andrew Peacock: “I suppose that the Honourable Gentleman’s hair, like his intellect, will recede into the darkness.”

On Andrew Peacock: “We’re not interested in the views of painted, perfumed gigolos.”

On Andrew Peacock: “Can a soufflé rise twice?”

To Richard Carleton: “You had an important place in Australian society on the ABC and you gave it up to be a pop star…with a big cheque…and now you’re on to this sort of stuff. That shows what a 24 carat pissant you are, Richard, that’s for sure.”

On Jim Carlton: “I was nearly chloroformed by the performance of the Honorable Member for Mackellar. It nearly put me right out for the afternoon.”

On the Libs: “Mr Speaker can I have some protection from the clowns on the front bench?”

On the Libs: “Those opposite could not operate a tart shop”

To former ALP MP Jim McClelland: “That you Jim? Paul Keating here. Just because you swallowed a fucking dictionary when you were about 15 doesn’t give you the right to pour a bucket of shit over the rest of us.”

And some words from Bob

After Australia II’s landmark America’s Cup victory in 1983: “Any boss who sacks anyone for not turning up today is a bum.”

On recommending Advance Australia Fair as the new national anthem in 1984: “The previous Olympics, for instance, you have the Brits getting up, they win a medal — they do win one occasionally — and up goes God Save the Queen, and then Australia gets up and it’s the same anthem — now, that’s crazy.”

To Clive Robertson in 1989 when asked about accusations of being a womaniser: “They mean that I wasn’t faithful to my wife.”

At the 1987 ALP campaign launch: “By 1990 no Australian child will live in poverty.”

After being deposed as prime minister by Paul Keating in 1991: “If this was 11 years ago I’d be getting pretty thoroughly drunk, but fortunately for me and even more fortunately for others, that is 11 years ago and the only beer that will be passing my lips will be the totally non-alcoholic variety.”

On floating the Australian dollar in 1983: “We had this crazy business of the secretary of the treasury, the secretary of the prime minister’s department and the Governor of the Reserve Bank sitting down deciding what the exchange rate would be. Now, this is crazy.”

On later insinuations of infidelity: “The only significant other woman in my life while I was prime minister was Blanche, the only significant one. Once you fall in love, which I had with Blanche … that involves falling out of love with your wife. This is not something to be apologetic about.”

On giving up alcohol: “I just said to myself, ‘If you’re going to become prime minister of this country you can’t afford ever to be in a position where you can make a fool of yourself or of your country, and I never had a drop for the whole period I was in Parliament.”

On former Zimbabwe president Robert Mugabe: “He’s one of the worst human beings I’ve ever met. He treated black and white with equal contempt. He was a horrible human being.”

On his relationship with former UK prime minister Margaret Thatcher: “It was a remarkable relationship. Margaret and I had a love/hate relationship. She was always defending the South African regime and we had some terrible fights, including an enormous one in Canada. But to her great credit, she never allowed that to get in the way of our relations.”

On Tony Abbott: “I like him personally but I think he’s as mad as a cut snake. What’s the bugger going to say next?”

Clarence

XXX

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