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Marcus Today End Of Day Report
BY HENRY JENNINGS - MARCUS TODAY COMMENTATOR - 16/01/2018
VIEW MORE ARTICLES BY HENRY JENNINGS

 Market summary

  • ASX 200 down 29 to 6049. Closed nearer its low.
  • High 6077 Low 6042.
  • Wall St closed last night.
  • US futures currently up 177.
  • Telcos slip on broker downgrades.
  • Commodity stocks reverse on profit taking and downgrades.
  • RIO production numbers in line. Mongolian tax weighs.
  • Banks barely changed despite Fitch warnings.
  • AUD strengths as USD weakens. AUD 79.64c
  • Bitcoin $US13,074.
  • Asian markets slightly higher with CSI 300 up 0.33% and Japan up 0.54%.

FUTURES AND HIGHS AND LOWS

MT STUFF

  • MARCUS CALL – The golden rules of a bubble, a bet on the British Pound, and some stuff that'll scare the socks off you...like this chart.

  • TRADING PORTFOLIO We put on a new trade today - it closed up 13.95%. Yesterday's trade up 10%.
  • SMALL STOCK PORTFOLIO – Henry updates us on the portfolio. Lithium news, and an upgrade to Mesoblast.
  • INSIDERS - Some new Insiders content. And Henry discusses lithium versus hydrogen batteries.
  • BROKER STUFF - Quite a few changes in recommendations to consider.
  • CONNECT WITH US - We invite you to send us your own stock ideas. We also have the facility for you to email us any questions. Click on the "Ask Marcus Today" button in the newsletter or below - Ask us anything:

Advancers and Decliners

  • BAL +24.82% on profit guidance upgrade.
  • ORE – Trading halt - Capital raising.
  • BRG +3.20% broker upgrades.
  • A2M +6.46% positive on BAL news.
  • BTT +3.21% positive FUM movement.
  • STO -2.20% ORG -2.7% continue to fall on broker downgrades.
  • NGI +2.24% fund manager interest.
  • RFG -4.26% the downward rerating resumes.
  • VOC -2.78% TPM -0.6% on broker downgrades.
  • Biggest risers – AFT, REL, HNR, IBN, SUR, ADV, NML, ADV, NML.
  • Biggest fallers – NIU, IKW, CKA, KRL, RNL, RGP, SMA, RTR, LRS, TMX.

TODAY

  • Rio Tinto (RIO) –0.66%. New record quarterly shipments of 90 tonnes from WA with 2017 exports now 330.1m tonnes beating its goal slightly. Record shipments in the quarter, when exports ran at an annualised rate of 357 million tonnes. Bauxite production of 50.8m tonnes was up 6%. Copper production was 9% lower at 478.1m tonnes due to the impact of the 43-day strike at Escondida. Production and shipment guidance remains unchanged. The company has also been hit with a new $155m tax bill in Mongolia.
  • Orocobre (ORE) - HALTED - The company announced a $361m capital raising with a strategic placement to Toyota Tsusho for $282m at 750c a share being a 17% premium to recent VWAP. The company also announced a 1:20 pro rata accelerated entitlement offer to raise $79m at 655c. A very attractive deal for shareholders and the shares should get a positive reception to the strategic move. The company also has delivered a strong result with December production up 84% to 3,937 tonnes and FOB cash costs of US$3,946 a tonne. This is a good result with record revenue of US$440m up 72% and margins of US$47,604 a tonne up 23%.
  • Bellamy’s Australia (BAL) +24.82% Upgrade to revenue numbers this morning. FY18 guidance is now raised to 30-35% revenue growth versus previous 15-20% growth. EBITDA margins from 17-20% to 20-23% driven by combination of costs management and stringer revenue growth. The company will update the market on the CFDA registration process and has acquired the remaining 10% of Camperdown for a total consideration of $28.5m.
  • Afterpay (APT) +16.87% Underlying quarterly sales of $551m up from $367m. Currently over 1.5m customers. EBTDA expected to be around $11m-$12m.
  • Auckland Airport (AIA) +1.05% has sold its $370m stake in North Queensland Airports to WA billionaire, Stan Perron.

ECONOMIC NEWS

  • ANZ Roy Morgan Consumer Confidence – Headline up 1.2% since last week. Highest level since October 2013.

  • New Motor Vehicle Sales up 4.5% MOM.

  • The number of dwellings approved rose 0.9% in November 2017, in trend terms, and has risen for 10 months. Dwelling approvals increased in November in Victoria (5.6%), Tasmania (3.1%) and South Australia (0.1%), but decreased in the Australian Capital Territory (21.9%), Northern Territory (3.8%), Queensland (1.2%), New South Wales (0.9%) and Western Australia (0.6%) in trend terms.

BOND MARKET

ASIAN NEWS

  • China's central bank lifted the interest rate on 63-day reverse repurchase agreements, or reverse repos, used for open market operations by 5 basis points, bringing it in line with other interbank rates adjusted in mid-December.
  • Hong Kong stocks marched to new 10-year highs today, underpinned by gains for resources and information technology firms, and also encouraged recent gains on Wall Street.
  • China's economy is expected to cool this year as a government-led crackdown on debt risks and factory pollution drag on overall activity, a Reuters poll showed on Tuesday.
  • China Hongqiao Group Ltd, the world's largest aluminium producer, said it plans to raise HK$6.24 billion ($800 million) through the sale of new shares to cut debt.

EUROPE AND US MORNING HEADLINES

  • More trouble in Greece as government approved a new austerity package and changes to union rights to strike as a condition of fresh bail out funds.
  • Carillion fall out to continue in UK following collapse of building and maintenance group. So far Serco the big winner after a 7% rise on the news. Losers seem to be small business with £1bn owed to 30,000 SMEs.
  • New law suit against banks involved in interest rate rigging with the Fire and Police Pension Association of Colorado accusing nine banks of colluding on the Canadian Dealer Offered Rate (CDOR).
  • JP Morgan has raised UK forecasts as it believes Brexit negotiations have lessened uncertainty. GDP forecast raised to 1.8%. Hardly spectacular but stable is the hope.

  • London property prices continue to be pressured. Southwark in real trouble.

 

MARKET MAP



View More Articles By Henry Jennings

Henry Jennings has been involved in financial markets for over 35 years as both a trader and a broker in London and Sydney.

Starting his career in London trading derivatives and moving to Australia in 1989, Henry eventually settled at Macquarie Group, rising to become a Divisional Director responsible for Equity Trading in Australia. For the last decade, Henry has been involved in private client broking and now writes exclusively for the renowned financial newsletter Marcus Today. Henry regularly appears on ABC TV and Sky Business as a market analyst, commentator and strategist and has presented at various conferences most recently for the AIA on the Gold Coast.

To gain further insights from Henry Jennings, Marcus Padley and the Marcus Today team of analysts, click here to register for a free trial of the Marcus Today daily newsletter.



Important note: Any financial product advice contained in this email is general financial product advice only and does not take into account any one person's objectives, financial situation or needs. Therefore, before acting on any financial product advice in this email, you should consider, with or without the assistance of an independent adviser, the appropriateness of the advice, having regard to your objectives, financial situation and needs.
 

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