“..building on a very solid lead from the US again.” ASX Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News. END of DAY REPORT with Henry Jennings.

 

ASX 200 up 73 points to 7049 building on a very solid lead from the US again. Dow futures up points. Gains across the board with a decent bounce in miners led by BHP up 1.7% and RIO up 0.7%. Banks once again in demand as defensive counters with CBA up 1.1% shrugging off its ‘most expensive bank in the world’ tag. CSL continues to power ahead up 1.6%. One standout is ELD up 6.1% as rain hits NSW. Energy stocks gained as crude rose on supply cuts hopes from OPEC +, STO up 1.45% and WPL up 2.7%. Results coming in today included a good set from NCK up 10.8%, though SSM took a tumble after reporting, down 9.1%. COL fell 0.1% despite a positive earnings update. REIT results continue to come through. MGR disappointed, falling 3.2%. In other news, IFN fell 13.1% as a large block trade was conducted at an 11% discount to the close last night. Economic news saw the December trade surplus dipping slightly to $5.223bn and retail sales for December down 0.5%. AUD higher at 67.56c and 10-year yields rising to 1.08%. China halved tariffs on US$75bn of imports due to kick in on Valentine’s Day. Yuan fix at 6.9773c and Chinese market up % with Japan up %

  • ASX 200 up 73 to 7049. Solid build to close on highs.
  • High 7049 Low 6988 Good volume. China boost helps.
  • Solid banks and miners. Energy stocks bounce.
  • China facing stocks bounce.
  • Lithium depressed. REIT results continue.
  • COL and NCK good updates
  • 10-year bond yields rally to 1.03%
  • AUD firms to 67.60c on trade data.
  • Dow futures up points.
  • Aussie gold drops to $2298
  • Bitcoin rallies hard to US$9608
  • Asian markets feeling better again with Japan up 2.65% and Chian recovering 0.97%.

STOCKS                                               

  • IFN -13.12% block trade sale at 71c.
  • SSM -9.09% results disappoint.
  • GXY -6.10% ORE +1.65% PLS -5.80% profit taking as Tesla falls
  • JIN -3.82% downtrend continues.
  • CIM -3.01% broker downgrades
  • PNI +11.18% good result reaction.
  • AEF +4.90% back with the buyers paying up.
  • ELD +6.13% it’s raining.
  • AAC +3.96% pushed ahead on better agri conditions.
  • LYC +4.61% responds to Malaysian rumours.
  • MFG +3.62% FUM above $100bn will do this.
  • LVT +8.47% buyers return on Microsoft deal.
  • FDV +10.38% progress on a partial sale of digital asset.
  • M7T +12.80% Appendix 2A
  • CSL +1.58% MS upgrades PT 37900c
  • PGC -9.84% broker downgrades
  • MTO -7.87% broker downgrades.
  • Speculative stock of the day: DeGrey Mining (DEG) +106.52% Major discovery at Hemi with 30m width @ 3.7g/t – 7.5g/t defined to 100m depth and open in all directions. Big volume too.
  • Biggest Risers: PNI, NCK, RMC, JHG, KAR, ELD, HUB and AEF
  • Biggest Falls: IFN, SSM, GXY, PLS, CDA, BKL and JIN.

TODAY

  • Nick Scali (NCK) +10.80% reports H1 underlying NPAT $20.3m vs company guidance $17-19m. Revenue came in at $137.5m vs consensus of $135.0m. EBITDA $31.0m vs consensus of $29.8m. Number of stores 58 vs year-ago 55. A 25c interim dividend was declared. No guidance was provided, NCK pointed to uncertainty around the current level of consumer confidence, which has been exacerbated by the coronavirus outbreak and other factors.
  • Pinnacle Investment Management (PNI) +11.18% reports H1 NPAT from continuing ops $13.8m vs consensus of $14.4m. Revenue came in at $11.4m vs consensus of $11.0m. EPS 7.7c vs year-ago 5.7c. Funds under management (FUM) $61.6bn at 31-Dec-19 vs $54.3bn at 30-Jun-19. An interim dividend of 6.9c per share was declared.
  • Dexus Property Group (DXS) -0.08% reports H1 underlying funds from operations (FFO) per security 31.9c vs year-ago 31.3c. Revenue $583.5m vs year-ago $455.6m. NPAT came in at $994.2m vs year-ago $726.4m. A 27c distribution was declared. The company lifts its guidance for distribution per security growth to ~+5.5% from ~+5%.
  • Coles (COL) -0.12% Q2 trading update. The company has seen second-quarter comparative sales rise 3.6% in supermarkets, 2.1% in liquor and 5.1% in Express (c-store) thanks to a stronger than expected Christmas campaign. Provisional 1H EBIT is expected to come in between $710m and $730m, with liquor EBIT down due to margin pressure.
  • ASX (ASX) -1.07% Report January activity. Volatility rose to 0.6% from 0.5% in December, while expected future volatility (measured by the S&P/ASX 200 VIX) decreases to an average of 12.4 from 14.8. Total capital raised for the month was $1.33bn, up from $408m a year ago, while the average daily trades and average daily value rose 21% apiece. The average daily volume on futures and options rose 8%.
  • Speedcast (SDA) – currently suspended amidst results issues and CEO changes, is now being closely watched for any moves by the bond holders. SDA has a high debt burden with around $600m in Term Loan B’s. It is thought that debt holders are attempting to offload their loans at 70c in the dollar. Results due 27th February. It has net debt of $625m. Market cap of $189m. This will not end well.
  • Service Stream (SSM) -9.09% reports H1 adjusted NPAT of $32.3m vs consensus of $32.6m. Revenue came in at $497.8m vs consensus of $512.8m. EBITDA from operations was $58.1m vs consensus of $53.2m. An interim dividend of 4.0 cps was declared. Expects EBITDA from operations for H2 to be in line with the first half.

ECONOMIC NEWS

  • Retail sales for December came in weaker than expected, down 0.5% vs estimates of -0.2%. Bushfires, bankruptcies and droughts not helping. The reading is a stark contrast to the November release that showed consumers were bringing forward their spending habits.
  • Trade balance for December came in at $5.223bn falling short of expectations of $5.5bn

  • Goldman sees RBA on hold for 2020.
  • Tourism the main sector to watch for downward pressure says CBA.

BOND MARKET

ASIAN NEWS

  • Toyota earnings alert. Revenue weaker but profits better. Up around 2% on the news.
  • Corornavirus death toll hits 563. Cruise ships now a problem. Virgin ends flights to Hong Kong. Country in lockdown.
  • China cuts some tariffs due in next week halving tariffs on some goods to eventually scrap all tariffs in bilateral trade.
  • Hong Kong to quarantine all travellers from mainland for two weeks.

EUROPEAN AND US NEWS

  • Stand by your man. US Senate acquits Trump. No surprise here. Mitt Romney votes with Democrats.
  • Casper a US mattress IPO has seen a lacklustre response to its offer cutting it svaluation to a mere US$476m.
  • General Motors took a US$3.6bn hit to earnings from a strike last year and forecast flat profits for 2020.
  • More OPEC + meetings in…Cue Ultravox.
  • I am Spartacus. Vale Issur Danielovitch Demsky . A hero of Telemark

And finally…

I know I am odd but I don’t get Ricky Gervais…what grown man is called Ricky anyway..don’t lose that number!

But here are some of his best jokes from the recent Golden Globes. …Mmmm

  • “I came here in a limo tonight and the licence plate was made by Felicity Huffman.”
  • “Martin Scorsese said the Marvel films remind him of theme parks. I don’t know what he’s doing hanging around theme parks – he’s not big enough to go on the rides.”
  • “Knives Out has three nominations tonight. See what can happen when you don’t dress people up as Cats?”
  • “We were going to do an In Memoriam section, but when I saw the list of people who had died this year, it wasn’t diverse enough. It was mostly white people. And I thought, ‘No, not on my watch.’”
  • “In a moment we’re going to see a short clip from The Irishman. It’s 88 minutes long.”
  • “Once Upon a Time in Hollywood was nearly three hours long. Leonardo DiCaprio attended the premiere, and by the end his date was too old for him.”
  • “Lots of big celebrities here tonight. Legends. Icons. On the same table, there’s Al Pacino, Robert De Niro and Baby Yoda. Oh no, that’s Joe Pesci, sorry.”
  • “Kevin Hart was fired from the Oscars for some offensive tweets. Luckily for me, the Hollywood Foreign Press can barely speak English and they’ve no idea what Twitter is, so I got offered this gig by fax.”

Vale Issur Danielovitch Demsky …I am Spartacus…one of a kind…

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Clarence

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Financial Markets and Political Commentary