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

 

ASX 200 fights back from early losses to close up 5 to 6397 on month end rebalancing. US futures down 212 but off lows as Trump puts Mexico on notice over immigration. Miners saw buyers return with FMG up 0.88% and BHP up 0.16%. CSL up 0.94% after enjoying a more severe flu season. Defensives rallied as bond yields fell again. TCL up 1.75% and SYD up 1.23%. GMG up 0.9% and the REITs recovered too. Gold stocks in vogue, though SBM fell 5.88% cutting its production numbers as production problems bite and the capital raising overhangs stock. In corporate news, LNK revealed more issues with Brexit in the UK and fell 23.07%. CWN was sold off after James Packer reduced his holding and sold 20% to Lawrence Ho and Melco. CWN fell 3.02%. LYC had some more good news with the Malaysian PM seemingly backing the LAMP facility getting a renewed licence and rose 11.31%. The Australian dollar slipped slightly lower to 69.18c and Asian markets were mixed again with Japan suffering on car maker woes falling 1.33% and China shrugging off PMI and trade wars to be up 0.7%.

Today’s Highlights

  • ASX 200 recovers from early losses to close down 5 to 6386.
  • High 6399 Low 6362. Month end rebalancing helps.
  • For the week, ASX 200 fell 60 points from 6456. May has seen gains of 72 points.
  • Gold miners rally with other defensives as risk builds.
  • Miners back in focus though energy stocks fall on crude prices.
  • Banks mixed as CBA shines.
  • CSL rallies as flu season takes it toll.
  • AUD slips slightly to 69.18c
  • Aussie Gold strong at $1869
  • Bitcoin stumbles to US$8187.
  • US futures down 180.
  • Asian markets mixed with Japan up 0.4% and China up 0.7%

STOCKS

  • LYC +11.31% LAMP shines
  • SHV +9.80% positive earnings update.
  • BLD +4.42% investor day cheers.
  • AMC +3.13% gets anti-trust approval for Bemis merger.
  • RMS +6.82% EVN +5.45% and NST +4.86% on higher Australian gold prices.
  • CGC +5.33% a bounce but will it last?
  • APX -6.64% Duke of York performance up then down again.
  • SBM -5.88% more production issues.
  • NEA -4.51% profit taking.
  • PME -3.15% profit taking.
  • WZR -3.23% management options granted.
  • PET -5.06% ups production but rare earths exposure weighs.
  • WOR -2.44% oil price weighs.
  • ECX +29.48% positive earnings update.Best month on record for vehicle leasing.
  • AYS +5.80% revitalises Optus agreement.
  • SYR +4.74% shorts covering again.
  • Speculative stock of the Day: Lake Resources (LKE) +53.85% after announcing high flow rates of cinductive brine at the Cauchari lithium brine project in Argentina. Potential for strong results to continue.
  • Biggest Risers: LYC, SHV, OMH, RMS, EVN, CGC and NST
  • Biggest Falls: LNK, APZ, SBM, NEA, BKL and AVH.

TODAY

  • Eclipx Group (ECX) +29.48% reports 1H19 statutory NPAT loss of 120.3m, a big drop from the $25.0m profit recorded last year. A big determinant of this result was $118.4m in non-cash impairments. EBITDA came in at $31.3m, down from $57.8m a year ago.
  • Link Administration (LNK) -23.07% trading and earnings update. The company expects FY19 operating EBITDA to be in the range of $350-360m (up from $335.3m in FY18), with operating profit expected to be $195-205m (down from $206.7m in FY18). The European operations of the company have seen the effects of the Brexit uncertainty and related drop in business sentiment and activity.
  • Boral (BLD) +4.42% has given an update at their investor day presentation, stating that H2 is tracking broadly in the range of expectations given in prior guidance. The company conceded it would need a strong June, however, this is nothing new.
  • Crown Resorts (CWN) -3.02% James Packer has sold down his holding in CWN by 20% to Lawrence Ho’s Melco company. Melco now owns 20% with Packer retaining a 26.6% stake in a $1.8bn sale which was handled without brokers or investment banks. Just a handshake perhaps. Melco will face regulatory approvals, and if forthcoming will look to increase its stake in the company that is currently building a new Sydney casino. The share sale was conducted at 1300c, significantly lower than the on/off takeover at 1475c from Wynn Resorts which was aborted earlier this year.
  • Vocus (VOC) –0.43% The ACCC has hired star council barrister Michael (baby faced) Hodge from the Hayne Commission to defend its decision to block TPM/Vodafone merger in court. The court case is a way off. ACCC wants November, VOC wants August.

ECONOMIC NEWS

  • Small and regional banks are cutting loan rates as they take the fight to the big four in a very competitive market. The new one-year fixed rate is 2.99% from Greater Bank, a NSW-based mutual. First time under 3%.

BOND MARKETS

  • 2-Year bond yields fall 2bps to 1.11%
  • 5-Year yields fall 4bps to 1.16%
  • 10-Year yields fall 6bps to 1.47%

ASIAN NEWS

  • Asian MSCI Index down 6% for the month.
  • The Chinese manufacturing PMI came in at 49.4 (estimates 49.7) and services 54.3, with both below what economists were forecasting.
  • Some components in PMI number fell heavily.
  • In Japan: Industrial production in Japan rebounded 0.6% month-over-month in April 2019 following a 0.6% decline in March and compared to market expectations of a 0.2% advance.
  • Japanese car makers saw falls today as they may be in Trump’s sights. Many make their cars in Mexico. Not good.
  • China has put Soybean imports from the US on hold. It has a ‘cunning plan’ too to restrict rare earths to the US too.
  • North Korea is now run by a Bond villian it seems as Chairman Kim has executed his negotiator from the Trump talks.

EUROPEAN AND US HEADLINES

  • Uber sets records. For a US$1bn loss. In a quarter.
  • POTUS has announced a 5% tariff on all Mexican goods imported into the US from June 10th and will ratchet it up to 25% in October if Mexico does not stop the flow of illegal immigrants into the US. He did say the Mexicans would pay for the wall after all. This is just a tariff wall rather than concrete and barbed wire. Mexican peso slumps.
  • Trump has threatened the UK with curbs on intelligence sharing if it backs Huawei. Now four eyes. Threathens the EU on sidestepping Iranian sanctions.
  • Donald Trump has backed Boris as preferred conservative party leader and next PM.
  • European futures to open around 0.5% lower.
  • German bond yields hit 700-year lows as deflation looms. There we said it. Super Mario goes in October. Looks like his successor will have a tough job reviving the EU economy.
  • German retail sales jump 4% YoY.
  • HSBC is cutting hundreds of jobs.
  • Facebook shareholders have tried and failed to replace Mark Zuckerberg as chairman. Hardly a surprise as the Zuck owns 57.7%.
  • Tesla has opened its order books in China for the new model 3 and has cut prices too with slow demand to blame.
  • In ScoMo words, ‘How good is Ben Stokes?’

And finally…………….

The sergeant-major growled at the young soldier, “I didn’t see you at camouflage training this morning.”

“Thank you very much, sir.”

I love that joke

funny-old-lady-joke

Clarence

XXXX

mt_tryforfree
Financial Markets and Political Commentary
 

Tags

, , , , , , ,

Related Posts

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