ASX remains becalmed as we await results, Fed and more stimulus. Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News

 

The ASX remains becalmed as we await results, Fed and more stimulus. The ASX 200 fell 14 points in quieter trade to 6006 (-0.23%).

Dow futures down 90 as summer US doldrums continue. Banks were the major focus today given APRA’s seal of approval to at least pay something to shareholders. Could have been worse than the 50% payout cap and raises the possibility of ANZ and WBC reinstating some dividend.

The Big Bank Basket rose to $127.34 in one of the few bright spots. CBA rose 1.1% and ANZ up 2.1%.

Other financials closed higher too with MQG up 0.3% although insurance is still a tough place to be with record low rates. IAG down 1.0% on more broker downgrades and QBE down 1.5%.

Miners took a well-earned break as RIO reported after hours. BHP down 2.0% and FMG down 0.2% as the stronger AUD is talking its toll. Gold miners too are losing their lustre in the face of higher bullion prices, soothed by a higher AUD. NCM down 0.8% and NST down 2.8%. Seems the fun may be over for the time being.

Elsewhere other USD earners are suffering still, CSL down 0.7%, XRO down 1.9% and even APT now a US earner of course down 1.2% as the SPP price looms into view. Boring domestic business back in demand, TCL up 1.4%, COL up 1.9% and WOW up 0.1%.

The All Tech Index dripped losses, WTC lost 3.6%. The Index fell 1.4%.

In corporate action today were a bunch of quarterlies which upset the apple carts, IGO down 13.2% after a disappointing one and SBM fell 7.6% after its own disappointment, APE rose 13.3% after its AGM comments on how tough the car market is yet it is a cost cutting story perhaps. WBC rose 1.4% after announcing it would bring 1000 jobs back to Australia. Bless. ALG unchanged after admitting guilt in QLD cases.

In economic news, CPI showed deflation for the first time in 72 years as childcare costs fell 95% (basically free) and the AUD moved higher to 71.6c on the back of the data. 10 -year yields back to 0.87% after the blip yesterday. Asian market mixed again with China up 1.7% and Japan down 1.1%.

Today’s Highlights

  • ASX 200 down 14 to 6006(0.23%)
  • High 6051 Low 6001. Average volume.
  • Waiting for Godot. Fed tonight.
  • Big Bank Basket $127.34.
  • All Tech Index down 1.4%
  • 67 trading days until the US election.
  • Dow Futures down 90.
  • 10-year bond yields fall back to 0.86% after blip Tuesday.
  • AUD firms on CPI numbers to 71.63c. Not helpful.
  • Aussie gold better at $2726 but only just.
  • Bitcoin falls to US$10965
  • Asian market mixed again with China up 1.7% and Japan down 1.1%.

STOCKS

  • RIO -0.42% late result:  EBITDA of US$9.6bn. US155c in dividends. 3% higher than 2019 first half.
  • APE +13.33% AGM comments. Cost cutting the focus in tough times.
  • FCL +4.18% quarterly report.
  • CIA +4.35% investor presentation.
  • MXT +2.65% daily fund update.
  • PET +7.27% water clears.
  • IFN unchanged UAC goes to 19.94% to foil full takeover by Iberdrola.
  • NCK +7.67% sofa so good. Maybe helped by TPW result.
  • TPW -2.92% PT lifted 60% by Bell.
  • IGO -13.20% quarterly presentation.
  • BFC +2.27% FIRB approval.
  • SBM -7.63% quarterly report
  • ALK -5.18% demerger tomorrow one for five in new entity ASM.
  • DEG -6.96% sell off continues.
  • SZL -5.27% sell now buy later perhaps.
  • NUF -4.90% yesterday’s winner todays loser.’
  • GMG +0.55% hits record. Post Office going 24/7 too on deliveries.
  • WHK -18.75% Whitehawk down on quarterly.
  • Speculative Stock of the Day: Suda Pharma (SUD) +137.04% TGA has granted approval for ZolpiMist which is a short-term treatment for insomnia in adults…zzzz…zzz…it works.
  • Biggest Rises: APE, NCK, CIA, FCL, MMS, ALQ and PNV.
  • Biggest Falls: OGO, SBM, DEG, ORE, PLS, CMM and SZL

TODAY

  • Stockland (SGP) –0.91% Acquires Macquarie Park office precinct. The four-hectare site sits adjacent to Stockland’s M-Park commercial office project, which is expected to start later in 2020 and has a potential consolidated development end value of more than $1.5bn.
  • Decmil (DCG) – Group chairman David Saxelby to retire. CFO Peter Thomas will fill the role as chairman and continue as CFO until the end of 2020 at which time a new CFO will be appointed.
  • Retail Food Group (RFG) – Recommences operations at Dairy Country’s Tullamarine facility following deep clean.
  • Karoon Energy (KAR) +0.68% CEO Robert Hosking to retire at the end of 2020 AGM
  • CBA, NAB, WBC and ANZ – APRA said that for the remainder of 2020 banks should retain at least half of their earnings when making decisions on capital distributions, conduct regular stress testing, make use of capital buffers to absorb the impacts of stress, and continue to lend to support households and businesses. Chairman Wayne Byres said that the regulator now believes banks do not need to continue to defer capital distributions, provided they moderate payments to sustainable levels based on robust stress testing.
  • CIMIC Group (CIM) +0.31% In advanced negotiations with Elliott Advisors regarding a 50% interest in CIM’s Thiess, which would provide joint control of Thiess to CIMIC and Elliott.
  • A.P. Eagers (APE) +13.33% Expects to report H1 underlying operating profit from continuing operations of $40.3m, down 23% vs year ago. Working to deliver permanent cost reduction of ~$78m per annum, all achieved within the last three months.
  • IGO Limited (IGO) +13.20% Full-year underlying EBITDA $459.6m vs consensus $461.9m. Revenue $892.4m vs consensus $870.2m. NPAT $155.1m vs consensus $160.4m. Underlying free cash flow $310.8m. Nova production for FY20 above guidance for all metals, at a cash cost of 241c per payable pound of nickel. FY20 nickel production at 30,436t. Tropicana gold production was in line with the prior quarter at 102,007 ounces, with the FY20 full year gold production within guidance at 463,118 ounces.
  • Downer EDI (DOW) -1.90% Awarded $324m in contract wins and extensions in power generation, oil and gas, and industrial sectors.
  • St. Barbara (SBM) -7.63% Q4 Gold production of 108.6Koz vs quarter-ago 91.5Koz. AISC of $1,301/oz vs quarter-ago $1,405/oz. Expects gold production in FY21 between 370-410Koz at an AISC in the range of $1,360 and $1,510/oz. Sustaining capex between $97 -$115m, plus growth capex of between $49-$57m and exploration expenditure between $30-$35m.
  • AMP (AMP) – Advises that a class action proceeding has been filed against AMP Financial Planning. The claim relates to changes made by AMPFP to its Buyer of Last Resort policy in 2019.
  • ALS (ALQ) +3.24% Provides trading update at AGM. Q1 revenue down 9.8% vs year ago. The revenue improved by the end of the quarter as economies reopened and client activity increased. Observed a degree of recovery in activity across all other major markets apart from Latin America. Group underlying EBIT margin maintained for Q1 FY21 vs year-ago. Not providing any formal financial guidance for H1 of FY21.

ECONOMIC NEWS

  • Consumer prices fell 0.3% vs year ago in Q2 vs market consensus of a 0.4% fall and following a 2.2% rise in the prior quarter.
  • The June quarter fall was mainly the result of free child care (-95.0%), a significant fall in the price of automotive fuel (-19.3%) and a fall in pre-school and primary education (-16.2%)
  • Some CPI components recorded notable price rises on the back of increased spending: cleaning and maintenance products (+6.2%); other non-durable household products, which includes toilet paper (+4.5%); furniture (+3.8%); major household appliances (+3.0%); and audio, visual and computing equipment (+1.8%).

COVID-19 NEWS

  • China reported 101 new cases, up from 68 a day earlier.
  • Anthony Fauci, the U.S.’s top infectious disease expert, said expectations for a safe and effective vaccine by December are “reasonable.”
  • Queensland will close its borders to all visitors from Sydney from Saturday.
  • President Donald Trump said the medical community’s widespread warnings against using the anti-malaria drug hydroxychloroquine to treat Covid-19 patients were politically motivated to damage him. All about him.
  • It’s a Kodak moment as the company share price surged on a US$765m government loan to help produce key generic medicines for CV19 treatments.
  • The Moderna vaccine protects Monkeys from CV19 it said in trials.

BONDS

ASIAN NEWS

  • Fitch Ratings cut the outlook on Japan’s sovereign debt rating to negative from stable.
  • The HK government is considering postponing the Legislative Council election to next year due to CV19.

EUROPEAN NEWS

  • Its all about the Fed baby. Stimulus and Fed.
  • Deutsche Bank results surprise to the upside on trading results but has warned on further provisioning. Net loss Q2 EUR77m.
  • Euro futures showing a soft opening.
  • Virtual congressional hearings into behemoth tech stocks kick off.
  • Moderna pitching vaccine at US$50-US$60 a course.
  • Peugeot chief urges radical steps to cut EV prices.
  • Boris Johnson warns of a second wave in Europe.
  • Amazon offering free home delivery in UK for groceries.

And finally….

How old were you when you realised that ”Dammit I’m mad” spelled backwards is ”Dammit I’m mad”.

Even though Jesus was a Carpenter, he never featured on any of the albums.

Bit cerebral….A man has an underground disco. He decides to designate a small seated quiet area with lighting to relieve the general gloom. He decided to have a false wall installed containing a window of amber glass which when illuminated gives the impression of sunlight. He engages a builder to build the wall and a glazier from Harrogate to install the glass. When it is finished, his comment was: “Now is the window of our discoteque made glorious summer by this son of York.”

BREAKING NEWS:

The notorious conman, Ray Dee – who allegedly stole millions from vulnerable people – escaped a lengthy prison sentence due to a legal complication.

However, while giving a victory speech outside the court he was fatally injured by a furious victim who threw a car’s main cooling system at him.

Police later confirmed the deceased was killed by a Ray Dee hater.

Clarence

XXXX

mt_tryforfree
Financial Markets and Political Commentary