long days journey into nuight

ASX 200 drops another 340 points to 4953 on big volumes again. From the outset we saw selling which accelerated as Dow futures turned seriously negative again by 600 points. Banks were the focal point again as the Big Bank Basket fell heavily to $112.48 near recent lows. Credit markets and worthiness remain a concern as central banks try to free up the debt markets. NAB down 7% and CBA down 5.5%. Still no news from AUSTRAC fine for WBC down 7.8%. Other financials were also hit hard as MQG fell 12.9% and MFG down 11.6%. Insurers too will be pouring over contracts to wheezle out of pandemic claims with QBE down 12% and IAG down 4.2%. Elsewhere industrials again pressured with WOW down 0.6% and COL down 1.4% despite no food in the house. TLS fell too as everything felt the contagion, dropping 8.4%. Some rare patches of green in RMD up 7.7% as the respirator stocks in demand. Travel stocks again hit hard on the back of an effective closure of the borders, as QAN fell 11.5%, FLT down 4.8% and CTD down 13.7%. In corporate news, many more companies have come out with profit warnings, ALL down 10.8%, MGR down 14.7%, RHC down 8.6% and SIG +17% bucking the trend. In miners, BHP dropped 3.8% as RIO fell 3.7% and FMG down 3.2% despite iron ore stability. Gold miners hit bonanza grades with EVN up 8.8% and NST up 7.8%, off highs but punters will take it. Energy stocks though under the pump with STO down 12.3% and WPL down 8.8%. Tech stocks down heavily ledby APT down 33%, the All Tech Index down 8% Plenty happening on the macro front with 10-year yields up to 1.14%, not a great sign. AUD clings to 60c just and Asian market far better than local ones, Japan up 1.1% and China up 1.6%. Just us really.

  • ASX 200 down 340 to 4953. Big volume and one-way traffic all day.
  • Another volatile close with computers playing games again.
  • High 5280 Low 4888. Dow futures trade 600 points lower
  • Banks slapped back down. Basket falls to $112.48.
  • Travel ban hurts. APT down 33%.
  • Nymex crude down 0.8%. OPEC plus meeting on the cards?
  • 10-year bond yields rise to 1.14%.
  • AUD rallies slightly to 60.15c
  • Aussie gold slips to $2541
  • Bitcoin better at US$5403
  • Asian markets better with Japan up % and China up %.

STOCKS                                               

  • A2M +5.28% cream rises.
  • AIA -0.99% traffic numbers.
  • SCG -16.28% CV19 update. Westfield open still.
  • SIG +16.98% market update
  • PPH +10.74% the digital donations plate gains in shut down world.
  • CKF +15.01% KFC changes no dine in option. Is that really a thing at KFC?
  • MGR -14.75% pulls guidance.
  • WGX +11.76% GOR +4.62% PRU +12.59% gold miners in favour now.
  • APT -33.05% biggest customers are biggest jobs casualties.
  • LOV -25.21% teens go cold on cheap jewellery
  • WOR -22.81% oil companies cut back spending.
  • AMP -5.19% Moody’s ratings.
  • MND -16.67% joins downgrade club late.
  • FLT -4.76% urgent business review.
  • NSR -28.06% trading halt. Bidder withdraws.
  • ALL -10.83% market update on Macau and other pokie environs.
  • CBR -47.81% placement and SPP at deep discount. Misses prospectus.
  • DUB -15.32% home working hots phone recording.
  • BUB +13.54% market update, business holds up.
  • OFX +13.68% market update and takeover approach.
  • MYR -20.93% retail disaster.
  • OSH -7.92% suspends Alaskan sale and cuts capex.
  • Speculative stock of the day: Wellness and Beauty (WNB) +% on large volume. The company has launched a Micro-19 Anti-Bacterial sanitiser.
  • Biggest Rises: SIG, CKF, PRU, WGX, PPH and EBO
  • Biggest Falls: APT, NSR, LOV, EML, WOR, PRN, CCP and KKC

TODAY

  • REA Group (REA) -1.69% has withdrawn its guidance for 2019-20. “It is not possible to predict the impact of the current environment on residential listing volumes.”
  • Ardent Leisure Group (ALG) -8.89% to close Main Event Entertainment centres in the US until the end of March 2020, following the US government’s decision to issue new, stricter guidelines to stop the spread of COVID-19.
  • Oil Search (OSH) -7.92% to suspend or defer certain discretionary activities. Capex guidance to $200 – 300m from $400 – 500m. Suspends Alaskan asset sale.
  • CIMIC Group (CIM) –6.06% Is reportedly slowing and potentially deferring the sale of Thiess due to market uncertainty given the virus outbreak.
  • Mirvac (MGR) -14.75% withdraws FY20 earnings and distribution guidance due to the duration and impact of COVID-19. The group said its balance sheet and debt position remains robust with $944m of cash and committed undrawn bank facilities. Gearing was 20.8% in December last year.
  • OFX Group (OFX) +13.68% reports it recently entered M&A discussions which have been discontinued due to market conditions; guides FY20 underlying EBITDA $36.8-38.3m.
  • Qantas (QAN) -11.54% Australian airlines set to receive $715m relief package from the federal government, to assist businesses following the major hit to tourism from the COVID-19 travel bans.
  • Virgin Australia (VAH) +6.35% to temporarily suspend all international flying. Domestic capacity to be reduced by 50%.
  • Aristocrat (ALL) -10.83% withdraws guidance for continued NPATA growth in FY20′ due to COVID-19. In global land-based markets, softer demand is becoming evident as customers initiate temporary venue closures and adopt a more cautious approach to capital expenditure.
  • Ramsay Health Care (RHC) – 8.61%withdraws FY20 earnings guidance as patients defer elective surgery.

ECONOMIC NEWS

  • Nothing new except moves by government to stimulate and protect.
  • NAB cashless retail sales index rose 0.7% last month. The index is derived from personal transaction data from NAB’s platforms and offers a 2-3 week lead on ABS retail trade data.

BOND MARKET

  • The Australian Office of Financial Management has issued $500m of May 2032 bonds at a yield of 1.28%. The auction had an 3.59 times cover ratio.

ASIAN NEWS

  • All new Chinese Corona cases are imported (from somewhere you’d rather be).
  • Taiwan closes borders to foreigners.
  • SoftBank has threatened to unravel its WeWork rescue package. Hot desks under threat from home desks.

EUROPEAN AND US NEWS

  • Biden the winner in Arizona primary. Here’s a thought if this goes on for a long time could the November election be delayed?
  • The US Federal Reserve announced it has established a new primary dealer credit facility (PDCF) to provide liquidity to market participants that lend to US households and businesses. The Fed also announced it would establish a commercial paper funding facility (CPFF) as a liquidity backstop to funders of households and businesses.
  • The great ETF issue. Vanguards US$55bn fixed income ETF has been hit by liquidity issues as NTA to trading price is a 6.2% discount.
  • ExxonMobil, Pepsi and Verizon are paying much higher interest rates to raise cash.
  • Amazon has stopped accepting non- essential goods into its US warehouses.
  • E-Scooter rentals have plunged in many cities. Plenty of start ups affected.

And finally…please send jokes..I am in need of some light relief…will be working until I’m 80 at this rate!!!

Clarence

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mt_tryforfree

Financial Markets and Political Commentary