The ASX surged 222 points to 5942 (3.89%) as US markets rallied. Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News

 

The ASX surged 222 points to 5942 (3.89%) as US markets rallied.

Dow futures kicked again as Fed now goes all in on buying corporate bonds., up 540 points. Do they know something we don’t?

RBA minutes too helped boost the AUD and international punters flooded Asia with buy orders sending stocks spinning higher. The usual suspects were back in the shopping cart as APT rose 10.5% hitting highs, Z1P tagged along for the ride up 9.5%, PBH had a stellar day at the track up 16.7% and the banks rose in unison following US banks higher. The Big Bank Basket basked in its beauty up to $125.26 with CBA up 4.2% and WBC up 4.1%. MQG too put in a fine show up 6.3% with insurers finding buyers too QBE up 6.3%. Bond proxies rallied hard SYD up 1.6% and TCL up 2.0% with TLS dialling in up 2.9%.

Healthcare resumed the advance led by CSL up 1.9% and COH up 3.1%. Miners too were not to be left behind, BHP rose 2.9%, FMG up 4.1% and NCM up 2.1%.

Energy stocks were boosted by higher oil prices and hopes of global growth, WPL up 3.9% and STO putting on 5.0%. Tech stocks led the fun and games squeezed higher with OML up 12.1%, EML up 11.4%, XRO up 3.8% and the

All Tech Index up 5.45%. In corporate news, SUL returned from its capital raise and rose 11.0%, VEA had a great day rising 15.5% on a trading update, WZR stunned shorters rising 35.5% on a loan update and even BET rose 14.8% after its $35m placement.

Plenty happening in economic news, with RBA minutes and Consumer Confidence improving and even jobs number showing some improvement, the 10-year yield hot 0.91% and the AUD is rallying hard up to 69.30c. In Asian markets they caught the Fed love Bug and Japan rose 4.9% after the BoJ said no change. Ever. China was better to the tune of 1.3%.

Today’s Highlights

  • ASX 200 rallies 222 points to 5942 (4.5%)
  • High 5976 Low 5758. Jumps and kicks again after RBA.
  • Big Bank Basket bought back up top $125.26
  • All Tech Index surges 5.45%.
  • 97 trading days until the US election.
  • Dow Futures up another 540 Strong Euro opening in store.
  • 10-year bond yields rally hard to 0.91%
  • AUD steady falls to 69.55c.
  • Aussie gold falls to $2483 as AUD rallies and risk on rally takes hold.
  • Bitcoin rallies to US$9545.
  • Asian market form with Japan up 4.9% and China up 1.34%

STOCKS

  • APT +10.48% hits all-time high
  • Z1P +9.53% follow the leader.
  • DXS +3.23% distribution announced
  • NSR +2.65% distribution announced.
  • VRL +0.46% extends deadline for BGH.
  • SPL +9.28% expands European product offering.
  • SIG +5.13% API +5.41% on new PBS funding scheme.
  • BET +14.81% placement to expand US growth.
  • PET -18.68% cuts guidance.
  • PBH +16.72% momentum stocks on a run.
  • VEA +15.46% positive update.
  • WZR +35.48% trading loan update.
  • LVT +15.56% shareholders letter.
  • CAT +15.45% sports back.
  • OPY +28.50% Shaw buy report.
  • ALG +13.19% rethink on Main Event deal.
  • SUL +10.96% back after placement.
  • AEF +10.76% off to the green races again.
  • WEB +11.41% change in substantial holdings.
  • Speculative Stock of the Day: Rox Resources (RXL) +108.33% after impressive gold hits at Youanmi (Grace). 25m at 34.79g/t Au from 143m. 6m at 140g/t.
  • Biggest Rises: PBH, PAR, VEA, OML, IFL, APE and EML
  • Biggest Falls: GOLD, IFN, SAR, GNE, LIC, PME and IRI.

TODAY

  • Viva Energy Group (VEA) +15.46% 1H underlying EBITDA expected between $257.5m and 287.5m vs year-ago $297.4m. 1H underlying NPAT expected in the range of $20m-50m vs year-ago $50.9m. To start its delayed buyback with a $50m installment. VEA in April said it would delay the return of $680m from the February sale of its stake in Viva Energy REIT due to the uncertainty caused by COVID-19.
  • InvoCare (IVC) +2.99% Appoints Adrian Gratwicke as CFO, effective August 3. Appoints Damien MacRae as deputy CEO, effective July 1.
  • Super Retail Group (SUL) +10.96% Completes institutional entitlement offer, raising $158m at 719c/share. The entitlement offer had a take-up of approximately 95%.
  • Fortescue Metals (FMG) +4.06% Is aiming for net zero operational emissions by 2040 and will also target a 26% reduction to its 2020 Scope 1 and 2 emissions from existing operations by 2030.
  • APN Convenience Retail REIT (AQR) – Launches $50m institutional placement at 320c/new security. Will also offer a non-underwritten Security Purchase Plan (SPP) to eligible security holders targeted to raise up to $5m. Reaffirms FY20 FFO guidance of 21.5-21.8 cps and FY20 distribution guidance of 21.8cps.

ECONOMIC NEWS

ANZ Roy Morgan Weekly Consumer Confidence rose 0.5% to 97.5 points. Follows a 1.3% fall last week.

RBA MINUTES:Click here for the full text.

  • Exports from China had also returned to more typical levels by April, but at least some of this recovery appeared to have reflected exporters catching up with their backlog of orders. External demand was expected to be weaker in coming months because the pandemic had continued to constrain demand elsewhere in the world.
  • Economic activity in Australia had contracted very significantly in late March and April, but more recent data had suggested that it had begun to recover over the course of May.
  • While some categories of discretionary household spending had contracted in March. Members noted that the large increase in retail spending was expected to have partly offset this, in contrast to the experience of many other countries.
  • The contraction in spending in late March and April had been accompanied by significant job losses, with total hours worked falling by 9% in April.
  • Some indicators suggested conditions in established housing markets had stabilised in recent weeks, although turnover remained low and housing prices had fallen in some parts of the country.
  • Members noted that the Australian Government and state governments had committed to higher spending across a range of programs, including the JobKeeper program; these measures were expected to deliver significant support to the economy.
  • The functioning of government bond markets had improved, with bid-offer spreads returning to more typical levels.
  • Housing loan payments (which include payments into offset accounts) had increased sharply in April, consistent with many borrowers saving for precautionary reasons and the curtailment of opportunities for spending.
  • The refinancing of loans remained high as borrowers sought to take advantage of competition among lenders for borrowers with low credit risk.
  • The Board recognised that the substantial, coordinated and unprecedented easing of fiscal and monetary policy in Australia was helping the economy through this difficult period. It was likely that this fiscal and monetary support would be required for some time. The Board remained committed to supporting jobs, incomes and businesses and to making sure that Australia is well placed for recovery. Its actions were keeping funding costs low and supporting the supply of credit to households and businesses. This accommodative approach would be maintained as long as required.
  • Notwithstanding these developments, it was possible that the downturn would be shallower than earlier expected. The rate of new infections had declined significantly and some restrictions had been eased earlier than had previously been thought likely. However, the outlook remained highly uncertain and the pandemic was likely to have long-lasting effects on the economy.
  • The Board affirmed that the target for three-year yields would be maintained until progress is made towards the Bank’s goals of full employment and the inflation target, and that it would be appropriate to remove the yield target before the cash rate itself is raised. The Board determined that it would not increase the cash rate target until progress is made towards full employment and it is confident that inflation will be sustainably within the 2–3% target band.

Jobs Payroll Numbers – Recovery in payroll jobs continued through May

  • Total payroll jobs increased by 1.0% through May, according to the latest release of weekly payroll figures from the Australian Bureau of Statistics (ABS) today.
  • Head of Labour Statistics at the ABS, Bjorn Jarvis, said: “The latest data showed that the total payroll job losses since mid-March were greatest in the week ending 18 April (8.9%) and had recovered to a 7.5% loss by the end of May.”
  • Payroll jobs worked by females increased by 1.4% through May, compared with 0.4% for males. However, total female job losses since mid-March were still greater (8.0%, compared to 6.3% for males).
  • Analysis showed jobs worked by multiple job holders were heavily over-represented in job losses. Around 29.0% of jobs lost since mid-March were previously worked by people as a secondary job. JobKeeper support can be sought for only one job for each eligible employee.
  • House prices rose by 1.6% in the March quarter, coming in below consensus forecasts for a 2.5% increase.
  • In the December quarter, house prices rose 3.9 %.

COVD-19 NEWS

  • Singapore said it won’t use a contact-tracing system jointly developed by Apple  and Google to fight the coronavirus, opting instead for its own domestic technology.
  • Only 0.1% of people in Tokyo tested positive for antibodies against the coronavirus.
  • New Zealand’s Ministry of Health said two new connected cases of Covid-19 resulted from recent travel from the U.K.
  • Efficacy data for Moderna’s Covid-19 vaccine could be available by Thanksgiving in a best-case scenario.
  • One in five people worldwide have an underlying health condition that puts them at risk for a severe Covid-19 illness if they contract the virus, scientists found.
  • Texas set its fourth-consecutive record for people hospitalized with the virus.
  • A second experimental Covid-19 vaccine from the U.K. is starting tests in humans this week.

BONDS

ASIAN NEWS

  • Hong Kong will allow gatherings of 50 people.
  • Beijing struggling to contain virus beyond the capital.
  • North Korea says it may send troops to the DMZ.

EUROPEAN NEWS

  • Very strong bounce expected in European markets.
  • UK April jobs number: Unemployment better than expected 3.9% (forecast 4.7%) in April v 3.9% in March. Data collection is not easy, and clarification is hard too. May not be too reliable. Average weekly earnings 1.0% rise v 1.4% forecast. 9m people have some form of government support.
  • Boris sees EU trade deal in July. UK will not extend Brexit deadline beyond year end. Good luck Boris. You will need it.
  • The Trump administration is preparing a nearly US$1 trillion infrastructure proposal to be spent on roads and bridges, but some would be spent on 5G wireless infrastructure and rural broadband.
  • The Federal Reserve said that it will begin buying individual corporate bonds under its Secondary Market Corporate Credit Facility (SMCCF), an emergency lending program that to date has purchased only exchange-traded funds. The Fed is creating a diversified portfolio of US corporate bonds and will create an index to track it.

And finally….

I hate housework,  …you do the dishes, make the bed, vacuum,…

…and then six months later you have to do it all over again!

Wife says to husband, “I’m so stressed out… hell of a day! But I finally got things fixed…….Darling, Just to make me feel good…  Can you please tell me those magic words I love to hear??”

Husband says, “Yeah sure,…. You were right!…”

Wife,  “No no ..you know the ones I really love!…”

Husband, ….”  Umm?…Oh yeah!……I was wrong.”

Clarence

XXX

mt_tryforfree
Financial Markets and Political Commentary