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

 

A quieter day today with early drops giving bargain hunters reasons to step in. The ASX closed up 11 points to 6511. Dow Futures down 10. Banks took stock today with WBC bucking the falls, up 1%. Resources remain the sector in favour as FMG went ex-dividend and fell only 1.5%. BHP finally started to push 0.3% higher after a comprehensive business update. RIO up 0.4% in demand too. Bond proxies rallied back from recent sell-offs on rate cut hopes but TLS stayed weak, down 0.3%. LYC +7.5% was a standout on fears that China will limit rare earth supplies to the US, giving LYC a strategic edge. Coal stocks also stirring with CRN soaring 4% and continuing its strong run on the stronger met coal price. Buying also spilled over into the building sector on the election win, boosting hopes for housing. BLD up 3.8% and CSR up 5.4% today. In corporate news, HSO shareholders voted to take the Brookfield offer and results from AAC up 2.2% showed the full effects of the drought and flooding plains. AUD drifting lower on rate cut hope. Construction activity fell yet again and Asian markets mixed on trade war woes.

Today’s Highlights

  • ASX 200 up 11 to 6511 in good solid trade.
  • High 6511 Low 6479. Narrow range consolidation.
  • Highest close since 2007.
  • Resources shine on higher iron ore and stimulus hopes.
  • Banks take stock and flat line.
  • Healthcare in rude health led by CSL.
  • Builders see buyers.
  • ALL eases ahead of results tomorrow.
  • Tech under a little pressure but nothing significant.
  • AUD sags to slipped to 68.74c on rate cut hopes.
  • Oil in focus on Trump Iran comments.
  • Aussie Gold up slightly on weaker AUD to $1852.
  • Bitcoin slips slightly to $7947.
  • US futures down 10.
  • Asian markets mixed with Japan up 0.07% and China down 0.57%

STOCKS

  • LYC +7.52% strategic appeal outs.
  • ISX +3.70% resumes momentum higher.
  • CSR +5.43% builders are back.
  • PLS +7.05% ORE +5.68% and GXY +6.23% our friends electric.
  • NHC +4.91% coal stocks starting to pick up.
  • CRN +4% coal back in vogue.
  • WHC +2.63% laggard but for how long?
  • CUV +8.30% thin volume.
  • DDR -7.41% profit taking.
  • ALQ -4.38% results disappoint.
  • IFL -7.09% update on APRA issues.
  • LCK -2.00% clarifies presentation.
  • LVT +23.46% on Microsoft deal.
  • AMS +14.56% profit upgrade.
  • CAT +5.00% continues to bounce.
  • ALQ -4.38% despite good results and broker upgrades.
  • Speculative stock of the Day: Australian Mines (AUZ) +27.78% following an ASX query
  • Biggest Risers: PPC, CUV, BIN, LYC, PLS and GXY
  • Biggest Falls: DDR, IFL, PPH, ALQ, MPL and AMI.

TODAY

  • Australian Agricultural Company Limited (AAC) +2.24% Full-year results; NPAT of ($148m) vs consensus of ($74m). Revenue beat expectations at $364.1m. Underlying Operating Profit (excluding Gulf flood event and Livingstone) came in at $39.6m vs year-ago $9.8m. The total impact of the extreme weather conditions was around $107m.
  • Macmahon Holdings (MAH) –2.50% Reiterates full-year guidance at an investor presentation. Revenue expected to be between $950m-$1050m. Underlying EBIT anticipated to be between $70-$80m.
  • Lucapa Diamond Company Limited (LOM) – In trading halt pending an announcement regarding a significant diamond recovery.
  • NRW Holdings (NWH) +2.05% Has responded to speculation regarding an acquisition of BGC contracting. NWR said while it continues to look for opportunities to diversify its revenues, it is not currently pursuing any purchases to the value speculated in the media.
  • Fortescue Metals (FMG) –1.54% Approves development of Queens Valley mining area at Solomon Hub. Total capex for the Queens development is estimated to be $287m over 4-years. FMG also trades ex-dividend today for its 60c per share special dividend.
  • Origin Energy (ORG) +0.13% ACCC will not oppose Australia Pacific LNG’s proposed acquisition of the Ironbark coal seam gas project from ORG. The ACCC said the proposed acquisition would be unlikely to lessen competition in any domestic gas market.
  • Lynas Corp (LYC) +7.52% Has clarified the figures on slide 33 of its presentation, following its investor day yesterday. LYC withdrew estimates it had 3m tonnes of rare earth deposits and 1.7m tonnes of rare earth ore reserves at Mt Weld, saying these were only opportunities based on production to date.
  • Healthscope (HSO) –0.40% Shareholders vote in favour of being taken over by Canada’s Brookfield.

ECONOMIC NEWS

  • The six-month annualised growth rate in the Westpac– Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, declined from –0.13% in March to –0.47% in April.
  • March, missing market expectations of a flat reading. Engineering work -3.9% and residential work -2.5% were the main contributors to the fall. Commercial work bucked the trend +3.6%.
  • The internet job vacancy index fell 1.6% to 81.2 points in April, after falling 1.8% in March. The index is almost 6% weaker than a year ago indicating the weakest annual growth rate since December 2013.

ASIAN NEWS

  • Chinese tech stocks under pressure on reports that Hikivision will be included in the US blacklist. Hikivision is the world’s largest surveillance company.
  • The US is weighing up adding five Chinese companies to the blacklist.
  • Thailand’s exports fell again in April amid weak regional demand.
  • Won for the money as Korean authorities meet to discuss extreme volatility in currency trade.

EUROPEAN AND US NEWS

  • Brazilian group, Natura Cosméticos, which owns The Body Shop is bidding for Avon in a potential US$2bn deal.
  • US companies are facing increasing retaliation from China as both sides dig in for a long battle over trade.
  • Wow. Transferwise co-founders sold part of their stakes in a deal valuing the FX money transfer app at US$3.5bn.
  • US regulators are looking at blaming a bird strike for the recent Boeing 737 Max crashes. Yeah right. Not convinced.
  • Jim Bullard says the Fed may have overdone it with December rate rise. Easy to undo!!!

And finally………….

Three girls all worked in the same office with the same female boss.

Each day, they watched the boss leave work early. One day, the girls decided that, when the boss left, they would leave right behind her.

After all, she never called or came back to work, so how would she know they went home early?

The brunette was thrilled to be home early…she did a little gardening, spent playtime with her son, and went to bed early.

The redhead was elated to be able to get in a quick workout at the spa before meeting a dinner date.

The blonde was happy to get home early and surprise her husband, but when she got to her bedroom, she heard a muffled noise from inside.

Slowly and quietly, she cracked open the door and was mortified to see her husband in bed with her boss!

Gently she closed the door and crept out of the house.

The next day, at their coffee break, the brunette and redhead said that they planned to leave early again, and they asked the blonde if she was going to go with them.

“No way!” the blonde exclaimed. “I almost got caught yesterday!”

Clarence

XXXX

mt_tryforfree
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