Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News. END of DAY REPORT.

 

HAPPY NEW YEAR ! Hope everyone had a good break….

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The ASX 200 fell 25 points to 6904 to start the week after falls in overseas markets on Friday. Closing rally adds 10 points. US Futures up points failing to help sentiment after a record breaking run last week. Volumes remain low and Japan on holiday for Coming of Age not helping trading conditions. Broad based losses with banks weaker again as brokers rushed to downgrade the 2020 outlook. CBA steady and ANZ down 0.4%. Miners too fell led by BHP down 0.9% and RIO down 0.3% although FMG Bucked the trend and rose 0.8%. Gold stocks slightly firmer with EVN up 2.8% and NST up 1.6%. CSL dropped too down 1.6% failing to breach the $300 level last week and consumer stocks weaker on some broker downgrades. In tech stocks, APT had a great day after a timourous start up 4.5% after a Z1P update and WTC too rose 0.4%. Energy stocks were obviously hurt by failing oil prices with WPL down 1.2% and STO down 0.6%. In corporate news, PPS rose 4.7% after a business update, MND secured a $400m contract from RIO and increased 0.2%, ATL fell 9.3% after a warning on the impact on tourism from the bushfires. A positive update from BNPL provider Z1P up 3.1% helped the sector. Nothing on the economic front although S&P warned of increased mortgage arrears in bushfire affected areas. 10 -year bond yields down to 1.21%. Asian markets quiet with Japan closed and Taiwan elections a focal point and China’s reaction. China up 0.31% and Taiwan up 0.6%

  • The ASX 200 loses 25 to 6904
  • High 6918 Low 6881. Low volume.
  • Broad losses in thin trade. Closing rally helps though.
  • Banks and big miners under some mild pressure.
  • CSL gives back some recent gains.
  • 10-year bond yields 1.21%.
  • AUD firms to 69.15c
  • Dow futures up points
  • Aussie gold steady around $2250
  • Bitcoin back up to US$8098.
  • Asian markets: China up 0.32%. Japan closed today.

STOCKS                                               

  • EVN +2.79% Macquarie downgrades.
  • Z1P +3.12% good trading update.
  • APT +4.50% after Z1P update.
  • GNG +19.28% signs engineering contract.
  • SYR +12.84% short squeeze continues.
  • PLS +2.94% lithium stocks continue to find new friends.
  • TNY +5.79% up up and away.
  • VUK -3.70% few UK nerves creeping in.
  • VGI -4.12% FUM update.
  • COL -1.21% cops a downgrade.
  • A2M -1.11% management changes.
  • EOS +4.35% broker upgrade.
  • NEA +3.08% playing catch up perhaps.
  • Speculative stock of the day: Tesserent (TNT) +29.55% and in a pause after Geoff Lord was appointed chair last week. Could be an explosive move for this cybersecurity cloud company. One to watch. Geoff Lord is highly regarded.
  • Biggest Risers: OPT, IMF, MP1< APT, EOS, MOE and ORE.
  • Biggest Falls: VGL, 360, VGI, RFF, VUK and PNI.

TODAY

  • Integrated Research (IRI) -1.56% Guides H1 NPAT $11.5-12.0m vs consensus $11.5m.
  • Praemium (PPS) +4.72% Reports December FUA $20.31bn vs quarter-ago $20.02bn.
  • A2 Milk (A2M) -1.11% Chief technical officer Phil Rybinski to step down, chief operations officer Shareef Khan will assume responsibility on an interim basis.
  • Coronado Global Resources (CRN) -2.16% Has reported a fatality at its Curragh coal mine in Queensland. An investigation involving the QLD police and QLD mines inspectorate is underway.
  • Zip Co. (Z1P) +3.12% Reports Q2 revenues of $38.5m, up 24% on Q1. The company said it is tracking well against its financial targets for FY20. Transaction volumes were up 40% to $562.6m, customer numbers lifted 24% to 1.8M and the number of merchants rose 24% to 20,875.

ECONOMIC NEWS

  • S&P is predicting elevated mortgage arrears in bushfire affected areas. Unemployment is expected to rise as tourism falls. Morgan Stanley also said that fires could result in higher provisions as banks give more time for affected customers to repay loans and account for higher losses on loans to small businesses whose cash flow will be under pressure. S&P also warned “bank investors might have to readjust modelling for bad debt cycles in response to climate change”.

BOND MARKET

ASIAN NEWS

  • Japan closed today for Coming of Age day.
  • Big week in Asian markets. Deal signing later this week and plenty of economic data.
  • Taiwan election dominates Asian news on landslide win for the pro-democracy President Tsai Ing-wen. China says one China is still the status quo. It said it was a fluke and reunification cannot be stopped. Hong Kong and Taiwan remain a thorn in Xi’s side.
  • Ford Motor Co’s China vehicle sales fell for a third consecutive year, by 26.1% .The US car company delivered 146,473 vehicles in China in the fourth quarter, down 14.7% year-on-year, Ford said in a statement. In total, it sold 567,854 vehicles over 2019. Sales sank 37% in 2018, after a 6% decline in 2017.It plans to launch more than 30 new models in China over the next three years, of which over a third will be electric vehicles.

EUROPEAN AND US NEWS

  • Aramco drops green shoe and raises recent IPO to US$29.4bn.
  • Casper which is an online US mattress company is launching its IPO. Suspect its rivals won’t take that lying down.
  • Siemens has refused to stop working with Adani over its controversial coal mine in Queensland.
  • Most Canadians wake to an alarm clock but in Ontario, people woke to a mobile phone text on Sunday alerting them to an incident at a nuclear power plant near Toronto. The message also came with the added shrill emergency broadcast noise just to get everyone’s attention. It was a mistake. Did take an anxious hour to correct it though.

And finally…

A guy stands over his tee shot for what seems an eternity: looking up, looking down, measuring the distance, figuring the wind direction and speed. Finally his exasperated partner says, “What’s taking so long? Hit the damn ball!” The guy answers, “My wife is up there watching me from the clubhouse. I want to make this a perfect shot.” “Forget it, man,” says his partner. “You’ll never hit her from here.”

While examining the the body of Mr. Schwartz, a mortician notices that Schwartz has the largest penis he has ever seen.

“I’m sorry, Mr. Schwartz,” says the mortician, “But I can’t send you to be cremated with a tremendously huge penis like this. It has to be saved for posterity.”

The mortician removes the penis, places it in a jar and puts the jar in his briefcase. When he gets home, he decides to show it to his wife. “I have something to show you that you won’t believe,” he says, removing the jar from his briefcase.

“Oh my God!” she screams, “Schwartz is dead!”

Clarence

XXXX

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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