ASX rose 76 to 5405 (1.4%). Up 14 points for the week. Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News. END of DAY REPORT

 

The ASX rose 76 to 5405 (1.4%). Up 14 points for the week. Dow Futures up 35. A good day for the beaten up banks after US financials rose. CBA up 1.2%, WBC up 2.1% after admitting to its sins of the past. The Big Bank Basket rose to $105.76. Elsewhere miners had a good day with stronger commodity prices driving buyers back in. Iron ore miners did especially well, FMG up 4.1% and BHP up 3.5% with gold miners seeing buying across the sector. NCM up 4.3% and NST up 4.1%. Energy stocks were doing well ahead of June WTI expiry next week, WPL up 0.9%, and STO up 0.9%. Healthcare too was in demand led by SHL up 2.7% and ANN up 6.2%. Some enthusiasm in TLS up 1.6% but industrials lagged. Consumer stocks were firmer, A2M up 2.0% and WES up 0.9%. In the tech space, XRO continued to weaken post its results as brokers downgraded PTs. Down 5.6% today dragging others in the sector down. The All Tech Index dropped 0.6%. In corporate news, KGN rose another 2.5% after it bought a furniture company, RHC rose 3.2% after agreeing on an HoA with the NSW government. Nothing on the economic front today locally, but Chinese production numbers beat expectations but no demand as retail sales fell short. Confidence a big issue. The 10-year yield rally to 0.91%  and the AUD increased slightly to 64.60c. Asian markets were slightly firmer, Japan up 0.6%, China down 0.13% though with European futures pointing to a moderately firm opening.

  • ASX 200 up 76 to 5397. Much lower volume.
  • High 5412 Low 5342.
  • Up 14 points for the week.
  • Iron ore and energy stocks shine.
  • Big Bank Basket up to $105.76
  • WBC admits 23m breaches but no sign of an agreed fine.
  • Virgin deadline for bids today.
  • All Tech down 0.65%
  • Dow futures up 35.
  • 10-year bond yields rally to 0.91%
  • AUD rallies to 64.60c.
  • Aussie gold rallies to $2679
  • Bitcoin rallies to US$9450
  • Asian markets mixed with Japan up 0.6% and China off 0.13%

STOCKS                                               

  • WBC +2.07% admits to 23m anti-money laundering breaches.
  • KGN +2.46% buys Matt Blatt.
  • BYE – trading halt. Raising at 13c.
  • BSL +2.76% takes a cyber hit.
  • BLD -2.33% US woes continue.
  • GMA +17.49% Fitch ratings upgrade helps.
  • RMS +8.8% SLR +8.86% RSG +6.90% AQG +7.51% gold rise.
  • CIA +10.33% iron ore price rises.
  • XRO -5.58% broker downgrades.
  • UMG -4.43% capital raising continues to weigh.
  • Z1P -3.13% profit taking continues.
  • MHJ -8.33% business update.
  • LEG -6.67% drilling and broker report.
  • NSR +1.20% Abacus goes to 7% plus.
  • RED +15.56% change in substantial holding.
  • ISX – Appendix 4C – Still suspended.
  • CTX +3.84% name change to Ampol.
  • MQG +1.86% hires ‘Jokin’ Joe’.
  • Speculative stock of the day: Kyckr (KYK) +33.33% it has agreed to a deal with Commerzbank. KYK is a global regulatory tech company that authenticates ID etc and corporate KYC. A bit like a successful ISX.
  • Biggest Rises: GMA, CIA, PBH, SLR, RNS, AQG, GOR and GNC.
  • Biggest Falls: ZIM, TLT, XRO, UMG, ARB, YAL and Z1P..

TODAY

  • Boral (BLD) -2.33% revenues down in most businesses in the first four months of H2FY20. Largely due to volume and cost pressures associated with bushfires in January followed by COVID-19 impacts more broadly. EBITDA margins for the period January to April are tracking ~3%-5% lower than H1 margins across BLD’s divisions. For the four months ended April, concrete volumes were down ~16% and revenue was down ~6% vs PCP. Around 25% of the North American workforce has been placed on furlough. Has increased and extended its debt financing facilities with a new US Private Placement (USPP) note issue of US$200m. Now has ~$1.30bn of available cash and undrawn committed funds. Capex reduced to $330m in FY20. Aiming for any USG Boral transaction with Knauf to be on a cash neutral basis. David Mariner, President & CEO, Boral North America (NA), to step down at the end of the month. Darren Schulz, head of BLD roofing NA to step in as acting president & CEO, Boral NA.
  • APN Property Group (APD) +3.19 expects to pay FY20 final distribution of 1.55cps. At the end of April FUM stood at $2.56bn, versus $3.07bn at the end of December. Cost reduction measures on an annualised basis equal ~30% of FY19 operating costs of $14m.
  • Coca-Cola Amatil (CCL) -0.23% appoints Greg Barnes as CFO, effective June 1.
  • Viva Energy REIT (VVR) – to change its name and ASX code to Waypoint REIT Limited (WPR.AU), effective May 18.
  • Michael Hill International (MHJ) -8.33% Nearly 100 Australian stores and 25 New Zealand stores will be operating from May 16, with the balance of Australian and New Zealand stores to progressively open over the coming month. Plans to commence opening progressive tranches of Canadian stores from late May. Notes the Group has delivered strong digital trading growth, with digital sales above previous record Christmas 2019 levels for the past three weeks.
  • Westpac (WBC) +2.07% There is speculation this morning Resolution Life could buy Westpac’s $1.5-2bn life insurance business. There are also reports AMP may be looking to buy Westpac’s Panorama wealth management platform, which could require AMP to raise around $250m of fresh equity.
  • Myer (MYR) -1.96% to open a further eight stores tomorrow – Albury, Dubbo, Wagga Wagga, Erina and Miranda in NSW, Morely and Garden City in WA, and Tea Tree Plaza in SA. Services that require more close contact which include beauty appointments, apparel bookings, and suit and shoe fittings will remain suspended.

ECONOMIC NEWS

  • Nothing today.

CV19 NEWS

  • A shorter containment period of three months coupled with strong policy measures could limit the impact to US$4.1 trillion, or 4.5% of world output, the ADB said.
  • The Abbott CV19 test could be inaccurate. The FDA has produced early data that suggests potential false negative results.
  • U.S. cases rose 1.6% from the day before to 1.4m

BONDS

ASIAN NEWS

  • China’s industrial production continued to rebound but weaker than expected retail sales. Industrial production rose 3.9% year-on-year in April compared to a forecast of 1.5%. It rebounded from a 1.1% fall in March.  April retail sales fell 7.5% compared to the same time last year. This was lower than a forecast fall of 6%. Retail sales are down 16.2% year to date.
  • The jobless rate rose to 6% in April, up from 5.9% in March. Economists had expected a fall to 5.8%.
  • The issue is confidence. No use making stiff if no one has the confidence or the moneyt to buy it.
  • Property investment, which is a proxy for steel demand and iron ore use, fell 3.3%. However, it was better than the forecast decline of 4.5%.
  • Home sales in Singapore fell to the lowest in almost six years in April down 58%. The number of apartments sold was 277 versus 660 in March.

EUROPEAN AND US NEWS

  • London’s Mayor and the PM go to war on how to get commuters back to work.
  • USA has now shed 36m jobs. That is the entire population of Canada. Some perspective.
  • Trump threatens to stop offshore manufacturing of F-35 JSF bits.
  • POTUS doesn’t want to talk to Xi right now either.
  • Jeff Bezos could become the world’s first Trillionaire. If all goes well in five years.
  • The French are in an uproar over Sanofi’s’ plans to give the Americans any vaccine first/ Macron ‘pas heureux’.
  • WTI is up $64 from its May Futures contract lows. In a month. Supply off a little but really? June contract expires next week.
  • NYSE Trading floor set to partially reopen May 26th.

And finally..

A new CEO takes over at a struggling company and decides to get rid of all the slackers.

On a tour of the facilities, the CEO notices a guy leaning on a wall. He can’t believe this guy would just stand around on the job.

The new CEO walks up to the guy leaning against the wall and asks, “What are you doing here?”

“I’m just waiting to get paid,” responds the man.

Furious, the CEO asks “How much money do you make a week?”

A little surprised, the young fellow replies, “I make about $300 a week. Why?”

The CEO quickly gets out his checkbook, hands the guy a check made out to cash for $1,200 and says, “Here’s four weeks’ pay, now get out and don’t come back.”

The man puts the check in his pocket and promptly walks out.

Feeling pretty good about himself, the CEO looks around the room and asks, “Does anyone want to tell me what just happened here?”

From across the room comes a voice, “Yeah, you just tipped the pizza delivery guy $1,200.”

With a sheep under his arm, a man walks into his bedroom and stands in front of his wife.

“This is the pig I have sex with when you have a headache,” he says.

The wife looks at him and replies, “That’s not a pig, it’s a sheep.”

He answers, “I wasn’t talking to you.”

Clarence

XXX

mt_tryforfree
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