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Marcus Today End Of Day Report
BY HENRY JENNINGS - MARCUS TODAY COMMENTATOR - 17/07/2018
VIEW MORE ARTICLES BY HENRY JENNINGS

Today’s Headlines

  • ASX 200 slides as resources fold closing down 38 to 6204.
  • BHP leads resources lower.
  • Energy sapped again.
  • Banks hold the line as defensives stable.
  • AUD at 74.31 US cents.
  • Bitcoin stronger at US$6687.49.
  • Aussie Gold weaker at $1675.40.
  • US futures up 4.
  • Asian markets mixed though tensions ease Japan up 0.87% and China down 1.37%.

FUTURES AND HIGHS AND LOWS

MT STUFF

  • MARCUS CALL - Fund Manager check - A look at what some of the mid-cap fund managers have been doing recently.
  • TRADING IDEAS - No new trades. Three stop losses raised.
  • SMALL COMPANIES - Oil in the spotlight following Helsinki, we offload KAR and take a peek under the hood at ATS plus a research piece on PVS, a recent IPO.

POINTS

STOCK STUFF

Movers and Shakers

  • COE +4.65% broker comments and upgrades.
  • AX1 +3.19% bounces hard.
  • BIN +5.14% founder say no to sales.
  • MSB +0.00% broker upgrade.
  • PAN +6.36% going well despite metals down.
  • FLC +5.13% change in substantial holding.
  • AHY -34.87% rolled by downgrade.
  • WTC -3.40% high tech in focus.
  • SIG -4.04% ceasing to be a substantial shareholder.
  • DMP +0.85% CEO highest paid in Australia.
  • TNE +8.22% IFRS Presentation.
  • APA -1.64% takeover faces new Critical Infrastructure Committee hurdle.
  • AAC +4.35% meat market going well in drought.
  • Speculative stock of the day: CCP Technologies (CT1) +18.75% Announcement of a strategic investment by First Growth Funds of $250,000 at 2c with a free option attached at 3c. CT1 uses data from smart tags to monitor critical control points for the supply chain.
  • Biggest risers – TNE, SWM, BGA, NST, AHG.
  • Biggest fallers – SIG, WOR, WTC, IGO, SVW.

TODAY

  • Rio Tinto (RIO -0.31%) - Second-quarter Iron ore shipments lift. 2018 shipments are expected to be at the upper end of guidance between 330-340M/t. RIO also announced a 7% lift in 1H bauxite production to 25.9M/t and a 42% lift in copper output to 296,100t. Aluminium output was down 4% on year, at 1.7M/t.
  • Saracen Mineral Holdings (SAR -0.49%) – Reports record FY18 gold production at 316,453oz. FY19 guidance lifted to 325-345,000oz (previously 300,000oz) at ASIC of $1,050-1,100/oz.
  • Asaleo care (AHY -34.87%) – Warns on FY18 profits. Expects underlying EBITDA of $80-85m revised from $113-119m on the back of significantly higher pulp and electricity costs. First-half underlying EBITDA came in at $46.3m, down 24% on year. First-half Revenue down 9% on year to $267.2m.
  • Oil Search (OSH -2.76%) – Down 1.60% after the open on its June report. OSH maintains its 2018 production target following an earthquake in PNG that halted operations. Total production (mmboe) up 12% on the quarter. Quarterly sales and Revenue were down 9% and 11% respectively.
  • National Australia Bank (NAB +0.22%) - Appoints Geoff Lloyd as CEO of MLC after six years as CEO of Perpetual (PPT).
  • Perpetual Limited (PPT -1.47%) - Funds under management for the fourth quarter up $600m to $30.8bn. Net outflows for the quarter were $300m.

BEST AND WORST

ECONOMIC NEWS

  • ANZ Roy Morgan Weekly Australia Consumer Confidence Index (July 15): +1.2% to 121.5 points.

RBA MINUTES - Full Minutes available here

  • Consumption growth had been fairly subdued in the March quarter, following strong growth in the previous quarter.
  • Growth in household income had remained subdued over the most recent couple of years, with growth in all components of income remaining below average.
  • In established housing markets, housing prices had declined in Sydney and Melbourne following significant increases in previous years. Housing prices had fallen by almost 5% in Sydney over the preceding year.
  • In established housing markets, housing prices had declined in Sydney and Melbourne following significant increases in previous years. Housing prices had fallen by almost 5% in Sydney over the preceding year.
  • The unemployment rate had ticked down to 5.4% in May and had remained in a narrow range around 5½% over the preceding year. This suggested that there continued to be excess capacity in the labour market, as did indicators such as the under-utilisation rate.
  • Export volumes had increased strongly in the March quarter. Coal export volumes had rebounded following resolution of earlier supply disruptions and LNG exports had risen strongly as projects in Western Australia ramped up production.
  • A detailed discussion of the high level of household debt in Australia, informed by a special paper prepared for this meeting. Household debt has increased by more than household income over the preceding three decades in many countries, but particularly so in Australia.
  • A detailed discussion of the high level of household debt in Australia, informed by a special paper prepared for this meeting. Household debt has increased by more than household income over the preceding three decades in many countries, but particularly so in Australia.
  • Much of Australian household debt is owed by higher-income and middle-aged people, who tend to have more stable employment and often larger savings buffers. However, members recognised that a material share of household debt is held by lower-income households, which generally have higher debt relative to their income.
  • Conditions in the global economy had generally remained positive. Members noted that the major central banks were at different phases of their monetary policy cycles.
  • Concerns about rising international trade tensions had weighed on global equity prices, most noticeably in Asian markets. US equity prices had remained high, having risen substantially over 2017, reflecting continued strength in corporate profits.
  • Wages growth was expected to remain low in the near term, stronger labour market conditions and growing skills shortages were expected to lead to wages growth picking up over time.
  • The Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.

BOND MARKET

ASIAN MARKET NEWS

  • Chinese new home prices lift 5% on year, the most in four months after a 4.7% rise May.

  • China’s new blockbuster movie made with its biggest budget ever is officially a flop. Costs of US$100m and box office of just US$7m.

EUROPEAN AND US HEADLINES

  • Amazon Prime Day kicked off in the US beset by technical glitches as Jeff Bezos becomes the world’s richest man. Ever. US shoppers are expected to spend US$3.4bn online during the promotion.
  • BlackRock is feeling the pinch as inflows slow to a two-year low. Analysts blame the higher USD, and the slowdown is forecast to be temporary.
  • More trouble for May as she caves after Brexit deal at Chequers.
  • The world’s economic growth spurt is almost at an end, the International Monetary Fund (IMF) warned as it slashed growth forecasts for most of the developed economies. As a result, overconfident markets could turn from boom to bust, further risking a downturn. Global GDP should hit 3.9% this year, up from 3.7% in 2017, but remain at that level before falling back in the following years.

ANNOUNCEMENTS

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.

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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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