ASX 200. Henry Jennings, Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News with Idea Of The Day. END of DAY REPORT.

 

ASX 200 down 37 to 6680 as early gains slip through fingers as bond yields rally hard. US futures up points. Mixed day with banks trying hard to stay positive as WBC rallied 0.3% and CBA held up by 0.4%. NAB down 0.2% ahead of results. Tech stocks under pressure too with APT down 4.4%, APX down 7.8%, REA down 2.8% and WTC sinking another 2.4%. Healthcare finally saw profit taking led by CSL down 0.9% and COH down 1.9%. Bond proxies suffered on rising 10-year yields with TCL down 2.3% and SYD flopping 2.9%. REITs too in the sellers sights with GMG down 0.7%. Building stocks caught the BLD malaise with the US building supply maker down 3.7% and JHX down 2.0%. In corporate news, CTD rallied10.0% on guidance being reaffirmed and PDL hit the afterburners on its earnings release up 9.5%.BUB up 2.8% after an Alibaba deal. The 10-year bond yield rose to 1.26% and the AUD hovered around 69c. Asian markets mixed with Japan up slightly and China off a tad.

Today’s Highlights

  • ASX 200 down 37 to 6660 as rally evaporates as bond yields jump.
  • High 6715 Low 6658.Big volume day too.
  • Banks mixed ahead of NAB result.
  • Miners mixed with golds off.
  • Bond proxies slip. Healthcare under pressure.
  • 10-year bond yields jump to 1.26%. Big moves today.
  • AUD lower at 68.97c
  • Aussie gold lower at $2156
  • Bitcoin firms to US$9308
  • US futures
  • Asian markets mixed with Japan up 0.1% and China down 0.2%.

STOCKS

  • CTD +9.96% reaffirms guidance
  • PDL +9.48% earnings results turning corner.
  • EHL +4.23% rally continues but for how long.
  • BUB +2.78% Alibaba deal helping.
  • JMS -12.70% ex dividend
  • MPL -8.53% profit warning
  • NHF -2.16% reaffirms guidance.
  • CUV -6.59% change of directors interest.
  • APT -4.39% Z1P -6.27% downdraft continues.
  • TTT +3.49% rally resumes.
  • GNG +12.50% change in substantial holding.
  • DTL -4.08% high PEs unwind.
  • Speculative stock of the day: Novita Health (NHL) +40.00% after the recent change to the US reimbursement codes for TALi.
  • Biggest Risers: CTD, PDL, MGX, ABC, EHL and PPH.
  • Biggest Falls: NEA, MPL, APX, RMS, CUV, Z1P and MP1.

TODAY

  • Brickworks (BKW) +0.87% To buy Redland Brick for $48m, the acquisition is expected to deliver 3% EPS accretion within three years. The purchase includes four modern manufacturing sites, including two in Maryland and one each in Pennsylvania and Virginia, with sales of circa 80m bricks per year.
  • Magellan Financial (MFG) -0.86% Reports total FUM at the end of October of $93.54bn vs previous month $92.07bn. Magellan experienced net inflows of $1.39bn, which was made up of $1.13bn in retail inflows and $260m institutional inflows.
  • Pendal Group (PDL) +9.48% reports FY cash NPAT $163.5m versus expectations of $161.7m. Reports FY: Revenue missed; $491.2m vs $496.4m. Statutory NPAT $154.5m vs year-ago $202.0m. The result was characterised by significantly lower performance fees, which were (89%) vs year-ago $54.5m. Final dividend of 25.0 cps, bringing total full year dividends to 45.0 cps, down 13% year on year. The final dividend will be 10% franked and paid on 19-Dec-19 to ordinary shareholders at record date 6-Dec-19.
  • ASX Limited (ASX) -2.26% Reports October activity; volatility 0.6% vs prior month 0.3%, total capital raised $5.71bn vs year-ago $12.4bn. The average daily number of trades was up 19% y/y and the average daily value was $4.48bn vs year-ago $4.56bn.
  • Bubs Australia (BUB) +2.78% Has announced a strategic agreement with Alibaba CIP. Under the agreement, Bubs Australia and key channel partner, Alibaba CIP expect to ship adult goat dairy products, including CapriLac and Deloraine brand portfolios, worth $10m in Year 1.
  • Boral (BLD) +3.73% Maintains guidance for the full-year; NPAT is expected to fall between 5% and 15%, reflecting lower earnings and higher depreciation charges. Property earnings are expected in the range of $55-65m, first half EBITDA is anticipated to fall 5%.
  • Vicinity Centres (VCX) -0.38% Has offloaded two centres for a combined total of $195.5m. The sale will strengthen its balance sheet & reduce gearing but also impact FY20 FFO. FFO guidance has been lowered to 17.6-17.8c vs prior guidance of 17.8-18.0c.
  • Virgin Australia (VAH) –1.61% Expects 2020 second half domestic capacity to be down 2% year on year.
  • Corporate Travel Management (CTD) +9.96% Confirms full-year guidance at its AGM, expects underlying EBITDA in the range of $165m-175m vs consensus $168.9m.

ECONOMIC NEWS

  • New vehicle sales fell by 9.1% in October compared with the same month a year ago, extending a downturn in the industry which now stretches for 19 consecutive months. 78,000 fewer new vehicles have been bought for the first 10 months of 2019, compared with last year. One reason to blame, over-regulation of the finance sector a serious handbrake.
  • New Zealand’s seasonally adjusted unemployment rate rose to 4.2%in the September 2019 quarter, up 0.3% from 3.9% last quarter.
  • In the September 2019 quarter, the living costs of pensioner and beneficiary households (PBLCI) rose 0.3%. Over the same period, the living costs of self-funded retiree households rose 0.9%, age pensioner households rose 0.4%, other government transfer recipient households rose 0.3% and employee households rose 0.1%.

BOND MARKET – Big Day

  • 2 – year bond yields up 5bps to 0.89%
  • 3 – year bond yields up 6bps to 0.92%
  • 10 – year bond yields up 9bps to 1.26%

ASIAN NEWS

  • Tesla has reached a preliminary agreement to start using CATL as a battery supplier for cars made in China from as early as next year.
  • Aston Martin will launch its first sport-utility vehicle in Beijing this month. The price of the DBX from US$189,900, pitching it between Lamborghini’s best-selling Urus SUV, which starts at US$200,000, and the US$165,000 Bentley Bentayga. The DBX will feature a 4.0 litre twin-turbo V8 producing 550hp, with a top speed of over 180 mph.
  • Fine wine is a growing market in China and they want international wines. The quality wine demand is projected to grow to US$17.3bn by 2021
  • Postal Savings Bank of China said it would seek to raise as much as Rmb32.71bn (US$4.7bn) in a Shanghai secondary offering, in what would be the onshore Chinese market’s biggest share sale in four years.
  • Activity in Japan’s services sector declined for the first time in over three years in October following a rise in sales tax and a damaging typhoon

EUROPEAN AND US NEWS

  • Trump’s aide admits Ukraine aid was linked to Biden.
  • China has lifted the ban on Canadian pork and beef.
  • Boris Johnson has officially launched his campaign. Called Corbyn Stalin. Will Nigel Farage stand down the Brexit Party? He is not running himself.
  • Chelsea draw 4-4 with Ajax in Champions League.
  • Longest railway strike in UK history set for December. 27 days in store.Happy Xmas.
  • Is Uber, WeWork with wheels? Is it an unlicenced minicab dispatch system? Not quite so interesting if that was its role. Questions being asked.

And finally…

I got a universal remote for my birthday … well this changes everything

I stayed up all night wondering where the Sun had gone. Then it dawned on me.

One day, while a blonde was out driving her car, she ran into a truck. The truck’s driver made her pull over into a parking lot and get out of the car. He took a piece of chalk and drew a circle on the pavement. He told her to stand in the middle and not leave the circle.
Furious, he went over to her car and slashed the tires. The blonde started laughing.
This made the man angrier so he smashed her windshield. This time the blonde laughed even harder.
Livid, the man broke all her windows and keyed her car.
The blonde is now laughing hysterically, so the truck driver asks her what’s so funny.

The blonde giggles and replies, “When you weren’t looking, I stepped out of the circle three times!”

Read more on page: http://www.jokesoftheday.net/tag/blonde-jokes/

Clarence

XXX

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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