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Marcus Today End Of Report
BY HENRY JENNINGS - MARCUS TODAY COMMENTATOR - 15/05/2018
VIEW MORE ARTICLES BY HENRY JENNINGS

Today’s Headlines

  • ASX 200 down 38 to 6098
  • Quiet trade.
  • Banks steady NAB ex-div.
  • TLS slumps. Resources steady
  • Energy wanes. Industrials slip.
  • RBA minutes cut and paste.
  • Chinese data weaker than expected.
  • AUD steady at 75.09c
  • Bitcoin slips to US$8762
  • AUD Gold $1313 weaker.
  • US futures down 90.
  • Asian markets weaker, Japan -0.04% and China -0.09%.

FUTURES AND HIGHS AND LOWS

MT STUFF

  • MARCUS CALL – Banks are holding their dividends, and another Aussie dollar inspired upgrade.
  • SMALL STOCK PORTFOLIO – LYC had a nasty day yesterday on media reports in Malaysia and we look at the strategy going forward.
  • INSIDERS – We need to talk TLS and the great hope of 5G. Plus an insider offers some thanks for TTT.
  • TRADING PORTFOLIO – Three stop losses raised. No new trades.
  • INSIDERS 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. 

STOCK STUFF

  • APT +7.04% US expansion plans on track.
  • LNK +5.30% clarifies budget impact.
  • IVC +1.80% technical buying.
  • NWS +3.46% bounce after falls yesterday
  • PDL +2.00% wealth managers rally.
  • IGO +1.02% conference presentation.
  • COE +1.39% investor update
  • GWA -4.83% broker downgrades.
  • HSO -2.71% AustralianSuper rejects Brookfield bid.
  • VOC -4.43% telco weakness.
  • EML +8.68% good rally on broker support.
  • LYC -0.81% responds to Malaysian media.
  • Speculative stock of the day: Auris Minerals (AUR) +63.16% after Sandfire (SFR) +4.48% identified massive sulphides at Morck’s Well. AUR has a JV with SFR at the project.
  • Biggest risers – BKL, LNK, SFR, NWS, WTC.
  • Biggest fallers – AHG, SWM, TLS, GWA, VOC.

POINTS

TODAY

  • Afterpay (APT) - US market launch with 'Urban Outfitters', one of the largest portfolios of consumer lifestyle brands in the U.S. It has a total sales volume of US$3bn, which is the equivalent of the entire online fashion market in Australia. The agreement is for five years with a 2-year minimum.
  • Automotive Holding Group (AHG) – Retail margins are challenging and impacted by regulatory changes. Operating NPAT is now expected to be $75m. The performance of the Company’s Truck division remains strong. Management remains focused on margin improvement, revenue growth, and cost control.
  • BlueScope (BSL) – Profit upgrades this morning with EBIT now forecast to be $680 from $606m. Strong steel spreads in the US driven by increases are mainly due to a stronger performance from the mini-mill in Ohio.
  • Santos (STO) – responds to media speculation that ENN Ecological Holdings (ENN) will enter a trading suspension on the Shanghai Stock Exchange in connection with a preliminary agreement with Harbour in relation to the Harbour Proposal. The company says it hasn’t received any confirmation about an agreement between ENN and Harbour and continues to advise shareholders to take no action.
  • Whitehaven Coal (WHC) – Gas received Ministerial Consent and approval for the transfer of Idemitsu’s 30% joint venture interest in the Tarrawonga mine to the company. The acquisition increases WHC’s equity share in annual saleable coal production by about 0.55Mtpa.
  • Link Administration (LNK) – Update on the impact of the budget. An industry consultation period is now underway and is expected to be completed by 29 May 2018. LNK says the first date currently proposed for the assessment of impacted member accounts is 1 July 2019. The first date currently proposed for the transfer of impacted member accounts is 31 October 2019 (Sweep Date), and the impact from any reduction in the number of member accounts on Link Group is therefore not anticipated before FY2020.

BEST AND WORST

ECONOMIC NEWS

  • Consumer confidence lifted 1% to a 14-week high of 120.8, following the budget announcement last week according to ANZ and Roy Morgan.

RBA Minutes:

  • Gradual is the watchword from the RBA.
  • Both wages growth and inflation are expected to see a gradual rise. But very gradual.
  • "Stronger growth was expected over the following couple of years, which would reduce spare capacity in the economy and lead to a further gradual decline in the unemployment rate. This, in turn, was expected to lead to a gradual pick-up in wages growth and inflation."

Inflation to remain low and wage growth low.

  • "Headline CPI inflation was expected to be a little above 2% in both 2018 and 2019. Underlying inflation was also expected to increase from close to 2% currently to above 2% by the end of the forecast period."
  • For full statement click here.
  • Deputy governor Guy Debelle gave a speech today in Sydney. For the full speech click here.

RBA forecasts

BOND MARKET UPDATE

ASIAN MARKETS NEWS

  • Chinese data: Retail sales +9.4%, a slight miss on forecasts of a 10% rise. Production was up 7% beating a 6.3% forecast. Investment also fell short, +7%, expectations were for a 7.4% lift.
  • MSCI, the U.S. index publisher, said that 234 Chinese large caps would be partially included in its global and regional indexes on June 1, following an index review ahead of China’s inclusion in MSCI’s widely tracked equity benchmarks.
  • The 234 yuan-denominated stocks, or China A-shares, will represent an aggregate weight of 0.39 percent in the MSCI Emerging Markets Index at a 2.5 percent partial inclusion factor during the first step of the China entry. The second phase of the entry will take place in September. The MSCI China A Inclusion Index is heavily weighted toward financials, consumer, and real estate.
  • Fitch has upgraded its credit rating for Vietnam.
  • China and the US are still a long way apart on trade disputes according to the US ambassador.

EUROPE AND US MORNING HEADLINES

  • Modigliani masterpiece Nu couche sell for US$157m.
  • Aurora Cannabis has struck a US$2.5bn deal for rival MedReleaf.

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.

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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