ASX 200 soared 156 points to 6156 (2.6%) as Governor Lowe said things are on track and not as bad as feared. Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News

 

The ASX 200 soared 156 points to 6156 (2.6%) as Governor Lowe said things are on track and not as bad as feared. The government also extended Jobkeeper, Seeker and other stimulus programs helping put a airbag under the September cliff. Dow Futures rallied 136 points too. After a positive start the market kicked and kicked again on economic news from the RBA and Frydenberg.

Banks were back with the Big Bank Basket up to $129.53 as CBA rallied 3.4%. We get to find out how APRA see bank dividends in the next day or so.

Miners too took off like a scolded cat with BHP better by 1.1% after its positive production report, FMG up 2.9% and RIO up 0.9%. Gold miners too up again with out of favour BGL rallying 4.3% and NCM up 2.1%. STO wrote off a lazy billion this morning but still managed a 3.5% rise, WPL up by 2.6% too.

Industrials fell into line with the rally as TCL rose 3.4%, WOW up 0.9% and A2M up 3.2%.

Tech stocks and fintechs were the stars, every big day its good to see these market leaders taking the lead, APT up 8.0%, WZR up 9.1% Z1P up 8.8% and XRO up 5.6%. The All Tech Index had a terrific day rising 5.3% and NEA rallied 11.2% on a nothing announcement. Healthcare stocks were positive with CSL up 3.8% and FPH and RHC doing well too.

In corporate news, KGN updated the market and despite some early selling put on yet another 2.4%. MSB stemmed its recent losses rising 10.4% on better FDA news, PNR rose after 17.4% on some more drill results and ALG is set to answer three charges from the Queensland government over the Dreamworld tragedy.

In economic news, we had consumer confidence from ANZ, but these were overshadowed by the extension of the stimulus and comments from RBA chief that things aren’t as bad as they could have been. The 10-year yield fell to 0.85% and the AUD through 70c to 70.23c. In Asian markets, China unchanged and Japan up 0.8%.

Today’s Highlights

  • ASX 200 soars 156 points to 6156. Took off after ScoMo stimulus extended.
  • High 6161Low 6009. Better volume. The see has sawed. Closed on 19-week high.
  • Big Bank Basket $129.53
  • All Tech Index up 5.3%
  • 73 trading days until the US election.
  • Dow Futures up 136.
  • 10-year bond yield falls to 0.85%
  • AUD steady at 70.23c
  • Aussie gold steady at $2588.
  • Bitcoin steady at US$9182
  • In Asia, China unchanged and Japan up 0.8%.

INSIGHTS FROM THE MARCUS TODAY TEAM

  • MARCUS STRATEGY:
  • Big day for technology stocks today as the NASDAQ hits all-time highs again whilst the ‘old world’ falls – the Dow Jones was unchanged. It’s a technology driven stock market and we ask this question today, “Does Amazon want a vaccine”. And for that matter, does Facebook, does Netflix? Of course not. We’ve been getting it all wrong. The virus is good for the stock market. Cramer is wrong. If you want the stock market to go up, take your mask off, don’t put one on. It doesn’t mean the economy isn’t rooted, it is, and its devastating some industries, but when it comes to the stock market there are some real beneficiaries.
  • The problem for us is that they are almost all in the US and whilst a stock like APT is a clear winner on logic, the share prices in the sector in Australia are caught in the wake of the US, lack the profits and revenue and are more sentiment and herd enthusiasm than they are value. But it could run and run. So, don’t sell yet. We also look at a post-pandemic world, a few charts and make a few revelations about property in Australia.
  • HENRY’S TAKE:
  • Some thoughts on reporting season as the minefield lays ahead. TNT doing really well and starting to take a few profits but 12c looks doable. Also, a look at some valuations in the BNPL sector and cybersecurity stocks in focus. TNT is my preferred exposure, but the ETF HACK has been going well and others offer interest.

STOCKS

  • DEG +19.83% bounces off support.
  • SZL +13.02% relative value
  • NEA +11.16% no news is good news.
  • MSB +10.45% stems the negativity and turns around on FDA news.
  • APT +8.00% Z1P +8.77% SPT +7.29% BNPL back on stimulus.
  • BWX -2.34% placement complete.
  • 5GN +9.13% SPP complete.
  • TPG -2.47% still settling down.
  • TLS unchanged unexciting, better opportunities elsewhere.
  • LEG -7.41% aircore results.
  • PNR +17.39% visible gold.
  • SAR +4.07% quarterly report.
  • Speculative Stock of the Day: Immuron (IMC) +248.98% neutralising activity on SARS and CV2. IMM-124E offers a new potential therapeutic approach to target SARS in the GI Tract. N.B. it is CV2 not CV19.
  • Biggest Rises: DEG, SZL, NEA, MSB, CTD, ORE, PRN and APE.
  • Biggest Falls: ERA, HTA, TPG, BWX, AWC and GMA.

TODAY

  • BHP Group (BHP) +1.09% Q4 petroleum production 26.3mmboe vs consensus 27.5mmboe. Copper production 413.9kt vs consensus 402.0kt. Iron ore production 66.7Mt vs consensus 63.6Mt. Expects to achieve full-year unit cost guidance at WAIO, Queensland Coal and New South Wales Energy Coal (NSWEC). Petroleum and Escondida unit costs are expected to be slightly better than guidance. Petroleum production forecast to fall 13-16% in FY21 vs year ago. Copper (kt) production expected to fall 14-15% in FY21 vs year ago. Iron ore production expected to either fall 2% or lift 2% in FY21 vs year ago.
  • Perseus Mining (PRU) +3.14% Q4 gold production of 64,676oz at AISC US$935/oz. Gold sales 78,027oz at an average sale price of US$1,544/oz. Gold production 125.5-139Koz at AISC of $940-1,025/oz. First half guidance gold production 125.5-139Koz at AISC of $940-1,025/oz.
  • Downer EDI (DOW) – Launches $400m entitlement offer priced at 375c/share. Funds will be used to acquire the remaining shares in Spotless. Statutory NPAT loss between $150-160m is expected in FY20. Expects to take a $386m hit in relation to goodwill, restructuring and portfolio review costs. FY20 Underlying EBITA expected between $410-420m. Anticipates annual cost-saving benefits of $15-20m starting from FY21. Currently exploring the potential sale of its mining portfolio (in parts or as a whole) in response to recent enquiries from a number of interested parties. Laundries business performing well. The sale process has been paused.
  • Kogan.com (KGN) +2.36% June trading performance surpassed numbers from April and May. Gross Sales grew by more than 95% to $94m vs year ago. Gross Profit grew by more than 115% to $17m. Adjusted EBITDA grew by more than 149% to $7.9m. Active Customers grew to 2.2m.
  • Santos (STO) +3.49% Expects to recognise non-cash impairment between US$700m-US$800m in its H1 results relating to revised oil price assumptions.
  • Oil Search (OSH) +4.32% Q2 production 7.29mboe per day vs quarter-ago 7.37mboe per day. Total sales (mmboe) 6.79 vs quarter-ago 6.87. Total revenue US$266.2m vs quarter-ago US$359.4m. FY20 production guidance is unchanged.
  • Saracen Mineral (SAR) +4.07% June quarter production of 145,830oz at an AISC of A$1,152/oz. Gold sales over the quarter done at an average price of $2,280/oz. FY20 group production of 520,414oz was ahead of the company’s guidance of ~500,000oz.

ECONOMIC NEWS

  • ANZ-Roy Morgan Weekly Consumer Sentiment Index fell 1% last week to 90.7. Case numbers in Melbourne and Sydney hurting sentiment. The willingness of the government to extend support if required is underpinning resilience.

RBA meeting minutes. Click here to view the full release.

  • Timely indicators of economic activity had generally picked up, suggesting that the worst of the global economic contraction had passed.
  • Negative interest rates in Australia remain extraordinarily unlikely.
  • The board observed a pick-up in consumer spending in response to the decline in infections and the easing of restrictions across most of the country.
  • The nature and speed of the economic recovery remained highly uncertain and, as in other countries, would depend in large part upon the containment of the virus.
  • The policy package was continuing to work broadly as expected.
  • Likely that fiscal and monetary support would be required for some time.

Governor Lowe speech today helping too. Main points on labour market

  • Jobs decline better than expected
  • Jobs recovering- Jun hours worked +4%- reopening positive
  • Confidence in health and economy.

COVID-19 NEWS

  • Dengue Fever cases have overtaken CV19 cases in Singapore this week. Now 1736 active cases, the highest number ever recorded. So far 19 people have died from Dengue and 27 by CV19.

BONDS

ASIAN NEWS

  • The HK SE listing rallied hard today as news that Alibaba’s fintech ANT Group will list in HK with a US$200bn valuation expected. The HK portion is expected to raise around US$10bn in the IPO. The group will have a dual listing in Shanghai and HK no NY listing.

EUROPEAN NEWS

  • The EU has finally thrashed out a EUR750bn rescue package for the economy. More Oliver, more. The agreement required all 27 member states to say Ja, Oui or Si. The emergency fund will dole out EUR 390bn of grants and the rest in low interest loans.
  • Modest gains expected for Europe.
  • UBS results beat expectations.
  • Amazon market cap has risen US$561bn this year. Goldman Sachs has a 20% upside target.
  • European banks braced for another EUR 800bn in loan losses if pandemic gets worse.
  • Florida sued over school reopening.
  • Chevron will buy Noble Group in a US$13bn deal.

And finally..

Why did the Irishman give up internet shopping?
The trolley kept falling off the computer.

Husband: Want a quickie?
Wife: As opposed to what?

“Son, you were adopted”
“I knew it. I want to meet my biological parents!”
“We are your biological parents. Your new ones will pick you up in 20 minutes”

I used to date a girl called Lynsey Doyle…she smelled like a cricket bat…

I just failed my ventriloquists exam…can’t say I was surprised..

Clarence

XXXX

mt_tryforfree
Financial Markets and Political Commentary