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Marcus Today End Of Day Report
BY HENRY JENNINGS - MARCUS TODAY COMMENTATOR - 12/10/2017
VIEW MORE ARTICLES BY HENRY JENNINGS

 Market summary

  • ASX 200 grinds higher up 22 points to 5795.
  • High 5788 Low 5764. Tight range low volume again.
  • Moves towards the top of the range.
  • Banks pushed up on the close.
  • CSL and WES in demand.
  • Miners wilt as iron ore falls again.
  • Energy stocks rise. Infrastructure better.
  • AUD pushes through to 78.13c
  • US futures down 4.
  • Asian markets slightly higher with Japan up 0.19% and China CSI down 0.15%.

MT Stuff

  • Sydney event free for members. Henry Jennings will be representing Marcus Today next Tuesday evening (17th October) at the Scots College in Sydney. More information in today's newsletter. 
  • MARCUS CALL - Marcus continues the discussion about the risks of a correction in asset prices, looks at the upcoming Bank results session and AGMs for MFG and TCL today.  
  • STOCK OF THE DAY IDEA - A victim of algorithms over results season. Looks like a good trade now - brokers upgrading this morning. See today's newsletter for details.
  • TRADING PORTFOLIO - One new trade, stop losses raised. We are now up 44.2% in 56 in days. All our trades are in profit (a bull market helps everyone look like a God). See today's new trade in the newsletter.

Movers and Shakers

  • IPH +8.53% broker upgrade.
  • SM1 +3.94% continuing interest.
  • MYX +5.11% dogs are barking.
  • LOV +11.19% US Pilot store opens as US expansion beckons.
  • MSB +7.6% as optimism surges.
  • S32 -0.92% downgraded by Credit Suisse.
  • PPH -4.36% some profit taking.
  • FMG -1.81% iron ore weighs.
  • FPH -3.27% after broker downgrade.
  • NVT +3.25% new CEO.
  • WTC +2.70% $10 beckons.
  • MTR +0.26% rolls over and says bien sûr to Accor.
  • BAL +4.60% upgrade from company.
  • BKL +0.76% momentum stalling a little.
  • BOQ +1.16% special dividend cheers.
  • Speculative stock of the day: Canyon Resources (CAY) +34.41% after a ASX query and an update on the state of the Alumina and Bauxite market.
  • Biggest risers – LOV, MSB, IPH, LYC, BAL, MYX and HUB.
  • Biggest fallers – EWC, SSM, FXL, PPH, FPH and BGA.

FUTURES AND HIGHS AND LOWS

POINT CONTRIBUTORS

 

TODAY

  • Whitehaven Coal (WHC) -2.84% said today that its equity coal sales rose 23 percent to 4.7 million tonnes in the September quarter against the same period a year ago amid strong demand from Asian buyers. The figure topped a UBS forecast of 4.2 million tonnes. Whitehaven said it sold its thermal coal for an average $91 per tonne over the quarter, a 3.2 percent discount on the quoted average price of $94 per tonne.
  • Mantra (MTR) +0.26% Agrees to A$1.18bn takeover by Accor, or 396c per share. Mantra may pay a special dividend, deductible from the headline price. The company has rolled over very quickly. A gift horse in the mouth? The deal still needs approvals from FIRB and the ACCC so some way to go yet.
  • Regis Resources (RRL) +2.85% 1QFY18 report announced today. All-In Cost falls to A$861/Oz on the pcp. This was well below guidance. Gold output 91,921oz. Cash, and bullion totalled $131.3ml.
  • Bellamy’s Australia Limited (BAL) +4.60% Early results in FY18 have been positive and the company is now upgrading its FY18 guidance (excluding Camperdown) to a target of 15-20% revenue growth (from 5-10%) and 17-20% EBITDA margin (from 15-20%). Very positive result for BAL which not long ago was staring at a near death experience. The announcement yesterday of the ASIC settlement is also a positive.
  • Bank of Queensland (BOQ) +1.16% Good results this morning. The bank reported annual cash earnings of $378m, above the consensus forecast of $361m. The bank will also pay a special dividend on top of a fully franked final dividend maintained at 38c per ordinary share, in line with forecasts, bringing the total dividend before the special to 76c.
  • Transurban (TCL) +0.91% collected $567 million in toll revenue in the three months to the end of September - up 10.5% on a year earlier. Average daily traffic lifted by 1.1%. It also said it was evaluating the 51% stake the NSW Government is proposing to sell.

BEST AND WORST

ECONOMIC NEWS

  • Housing finance rose 4.3% in investor lending, its biggest gain since November. The gain, combined with a 0.1% tick up in lending commitments to owner occupiers - keeping that total, excluding refinancing of existing mortgages, at $15.2bn - lifted total housing finance 2.2% from July to $33.9bn, a new monthly high.

 

BOND MARKET

ASIAN MARKETS

  • Chinese steel futures dropped more than 2% to two-month lows, pressured by increased stockpiles after the Golden Week holiday as traders anticipated winter production cuts in Beijing's fight against smog.
  • The most-active rebar contract for January delivery on the Shanghai Futures Exchange fell as much as 2.5% to 3512 yuan ($US534) a tonne, its weakest since July 31. 14 steel mills in Wu'an city in China's top steelmaking province of Hebei have been ordered to cut production to 50% of their blast furnace capacity from October 7 to tackle air pollution.
  • BMW is working on a deal to outsource the manufacturing of Mini cars in China to Great Wall, the country’s biggest SUV maker.
  • Kobe Steel parts used in Japan’s bullet trains failed industry standards, officials said.

EUROPE AND US MORNING HEADLINES

  • Donald Trump places a lot of emphasis on the only poll of his performance that he considers matters.

  • Meanwhile the IMF has lifted growth forecasts but also suggests that risks are rising too. Chief risk is the rise in long term rates in the US. The IMF urged China’s economic leaders to accelerate their efforts to curb the expansion of credit.

   

  • The IMF also upset the US with a suggestion that major economies should raise taxes on high earners. 

  • Here is a number to contemplate. Blackrock is the world’s largest fund manager and now looks after US$5.9 trillion. It has taken US$264bn just this year. Most of it is heading into ETF and passive investing. US$5.9 trillion. Pretty soon we are talking real money.

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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