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

 

The ASX 200 up 5 to 6653 as early gains evaporate in the afternoon post the RBA cut. US futures up 31 points. Miners in demand as iron ore continues to head higher, BHP up 0.9% and RIO up 1.6% as banks under pressure on further rate cuts. CBA fell 1.5% and ANZ down 1.4%. Insurers and fund managers tried to buck the trend with MQG down 0.1% and SUN unchanged. Industrials held solid with consumer stocks slightly better, COL up 1.1% and WES up 0.11%. CSL once again gained as the flu season continues to bite and rose 0.7%. In corporate news, APT shuffled its board and rose 6.9%, as it became a grown up company. SDA updated the market and things have deteriorated badly since May and the stock fell 40.8%. In economic news, the RBA cut as expected taking rates to 1% and the prospect of negative deposit rates now a looming reality. Caution crept in to Asian trading with Japan up 0.07% and China down 0.30%. AUD slips to 69.79c on cut.

Today’s Highlights

  • ASX 200 up 5 to 6653 after early gains evaporate.
  • High 6686  Low 6642
  • AUD slips slightly to 69.79c on rate cut.
  • RBA trims sails for stormy waters.
  • Iron ore miners fire up on Asian price lift in Qingdai up 4.4%
  • Banks under pressure on margin issues.
  • Industrials mixed. Consumer stocks better.
  • Aussie gold sees bargain hunting to $1991.
  • Bitcoin crumbles to $9937
  • US futures up 31
  • Asian markets mixed with Japan up % and China down %.

STOCKS

  • GOR +7.04% gold back in fashion.
  • PET +3.21% sentiment continues.
  • MYX +4.85% rising from the dead.
  • SDA -40.80% profit downgrade
  • CVN -4.10% drilling update.
  • EML -1.37% some BNPL negativity.
  • CKF -0.24% director sales.
  • SPT -14.41% business model flawed?
  • PPS +10.26% bounce continues. New substantial shareholder.
  • TTT – trading halt Capital raising.
  • Speculative stock of the Day: NeuroScientific Biopharmaceuticals (NSB) +189.66% after announcing a breakthrough in nerve regeneration in spinal cords. Largest ever improvement in neurite growth and increased number of active connections between nerve cells. One to watch perhaps.
  • Biggest Risers: PRU, GOR, APT, WGX, MYX and MGX.
  • Biggest Falls: SDA, MOE, HUB, NWL, CVN and SM1.

TODAY

  • Blackmores Limited (BKL) +2.10% To appoint Alastair Symington as the new CEO and MD, effective October 1.
  • Afterpay Touch (APT) +6.93% Chairman Anthony Eisen to move into the role of CEO & MD, Nick Molnar will become Global Chief Revenue Officer in addition to an executive director. The company is also searching for an independent chair
  • Speedcast (SDA) –40.80% Now expects underlying EBITDA for FY19 between US$140m and US$150m vs previous guidance of US$160 to US$171m. Challenging market conditions, delays in expected revenue and increased churn from major contracts have all contributed to the downgrade.

ECONOMIC NEWS

  • NZ Roy Morgan Consumer Sentiment Index moved up 4% to 118.9 points.
  • RBA cuts rates by 25bps as expected. No surprise. 21 of the 32 economists surveyed by Bloomberg expected the RBA to cut. Watching jobs market closely. AUD steady on rate cut.

Some highlights from RBA commentary

  • This easing of monetary policy will support employment growth and provide greater confidence that inflation will be consistent with the medium-term target.
  • Global financial conditions remain accommodative.
  • Over the year to the March quarter, the Australian economy grew at a below-trend 1.8%. Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices.
  • There has, however, been little inroad into the spare capacity in the labour market recently, with the unemployment rate has risen slightly to 5.2%.
  • Inflation pressures remain subdued across much of the economy.
  • Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.

ANZ first bank to cut loan rates by 25bps.

BOND MARKETS

  • 2-Year bond yields down 2bps to 0.95%
  • 5-Year yields down 2bps to 1.01%
  • 10-Year yields down 2bps to 1.33%

ASIAN NEWS

  • Hong Kong remains on edge after a night of violence.
  • Li Keqiang, China’s premier said the country would open up its financial sector ahead of schedule and champion globalisation.

EUROPEAN AND US HEADLINES

  • OPEC agreed to extend oil supply cuts until March 2020
  • Positive start to European trade sessions.
  • US is now targeting $4bn of tariff increases against the EU to level the playing field between Boeing and Airbus.
  • Bitcoin is still the criminal’s currency of choice it seems with US$1bn expected to be spent online this year on the Dark Web.
  • US expansion is now officially the longest in history at 121 months.
  • Rome wasn’t built in a day but a day was all it took to wind back the budget to head off a serious argument with Brussels.
  • EU still cannot decide on key EU positions. Again.
  • Day Two at Wimbledon: Here are the stats: 2195 kg of bananas 21,917 bottles of champagne. 303,000 glasses of Pimms. 166,000 portions of strawberries and cream 2200 afternoon tea hampers.

And finally……………

I  had a Trivia competition in the bag until the very last question  ……. which I got wrong. The question was ‘Where do women have the  curliest hair ?’ Apparently the correct answer was Fiji  .

A  woman has a medical at the Doctors; “you are grossly overweight” he  says.”I  want a 2nd opinion”, she exclaimed ”OK- you’re bloody ugly as  well”

Clarence

XXX

mt_tryforfree
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