Marcus Today End Of Day Report
VIEW MORE ARTICLES BY HENRY JENNINGS
- ASX 200 down 19 to 6278 as early rally fails. Closes on lows.
- High 6307 Low 6277. Up 44 pts for the week (0.7%).
- NEG passes to next stage. Royal Commission winds up.
- RBA issues statement on monetary policy. Rates on hold for a long while.
- Financials better but commodity stocks weaken on Asian falls.
- Healthcare sector rallies but energy runs out of gas.
- AUD weaker to 72.83c as SOMP released.
- Bitcoin weaker again at US$6429.
- Aussie Gold steady at $1649.
- US futures down 92.
- Asian markets weaker again as China down 0.31% and Japan down 1.15%.
FUTURES AND HIGHS AND LOWS
- TRADING IDEAS - Two stop losses raised.
- SMALL COMPANIES - Do we stay or do we go in CVN? And a look at another minnow in the oil and gas space with a big brother and a big prospect. Plus the 'big short' question?
Movers and Shakers
- DMP +3.00% short squeeze ahead of numbers.
- MTS +3.42% short squeeze following MFG results.
- IFN +1.75% bounces after sell-off.
- GEM -3.72% sinks on Mayfield comments in results today.
- DHG -2.15% REA says 'bring it on', taking market share.
- BXB -2.61% acknowledges class action.
- PPH +4.27% oversold.
- AGL -2.32% brokers downgrade after results.
- AJM -5.17% bid rebuffed sees profit taking.
- NGI +6.06% broker upgrades following results.
- BIN -4.93% in the sin bin today.
- ELD -6.01% drought weighs.
- FSF -3.03% weaker on farmgate prices.
- BBN +38.51% competition falling away.
- KGN +5.68% positive momentum.
- BLA -7.44% clouds over.
- Speculative stock of the day: MGM Wireless (MWR) +18.94% thin volume but CEO on charm offensive.
- Biggest risers – NGI, PSI, CIA, PPH, A2M, SEA and REA.
- Biggest fallers – JHX, ELD, AJM, ELD, SGM, KDR and FAR.
- News Corp (NWS) +1.35% FY18 fourth quarter result. Revenue up 29% to $2.69bn, factoring in the Foxtel transaction it rose 5.2%. NWS recorded a net loss of $355m, EBITDA was up 45% to $312m including the results of Foxtel. When leaving out the merger-related charges, the company reported adjusted EPS of 8c.
- Fonterra (FSF) –3.03% Cuts last season's 2017/18 forecast Farmgate Milk Price to NZ$6.70 from NZ$6.75 per kgMS. Previously announced NZ$0.25-0.30 guidance range has been held.
- James Hardie (JHX) –6.55% First quarter FY19 results. Net profit up 58% to US$90.6m. Adjusted net operating profit, which strips out asbestos liabilities, rose by 29% to US$79.9m. For the full-year JHX expects an adjusted net operating profit of between US$300-US$340m, falling slightly below consensus of US$313-US$358m.
- REA Group (REA) +3.63% Annual profit up 23% to $253.1m, a final dividend has been declared at 62c bringing the full-year pay-out to 109c, up 20% on year. Annual revenue rose by 20% to $807.7m, while EBITDA was up 22% to $463.7m. Australian residential listings fell 4% in July compared with a year ago.
- Baby Bunting (BBN) +38.51% FY18 results. Sales up 9% to $303.1m, statutory net profit was down 29.1% to $8.7m. FY19 EBITDA is expected to be in the range of $24-27m, excluding employee equity incentive expenses and the gross profit margin is expected to be +34%. Gross profit margin in FY18 was hit by price deflation at 33.3%.
BEST AND WORST
RBA Statement of Monetary Policy (SOMP) Click here for the full statement.
- The Australian economy remains on track to achieve lower unemployment and higher inflation over time.
- GDP growth is expected to be a little above 3% in both 2018 and 2019, which will reduce spare capacity.
- CPI inflation is expected to be quite low in the September quarter.
- Unemployment at 5.5% by December 2018.
- As the labour market tightens, wages growth and inflation should increase gradually.
- Above-trend GDP growth should result in a gradual decline in the unemployment rate to 5% in 2020.
- Conditions in the established housing markets in Sydney and Melbourne continue to ease, but the declines in prices from their peaks remain modest overall.
- The average rate paid across all mortgages has drifted down over the past year.
- Consumption is expected to increase steadily, at a rate a little above the average of recent years.
- Business conditions remain positive. Surveyed business conditions are above average, especially for goods-related sectors.
- The Bank’s forecasts are for CPI inflation to pick up to be around 2.25% in both 2019 and 2020. Underlying inflation is also expected to increase, from close to 2% over the year to June 2018 to around 2.25% in 2020.
ASIAN MARKET NEWS
- Japanese second quarter GDP came in +0.5% quarter on quarter, above expectations of 0.3%. For the year, the GDP expanded 1.9%, above estimates of a 1.4% lift.
- Japanese producer prices up 3.1% on year in July, beating expectations of 2.9%. It was the highest rate in eight months.
- Morgan Stanley has warned on semi-conductor inventory levels rising. Samsung takes a dive.
- Noble has published a long-awaited restructure.
EUROPEAN AND US HEADLINES
- European markets expected to open lower. UK release 2nd quarter GDP report. FTSE expected to open down 3 Dax down 16 and CAC down 12.
- US Inflation number tonight. A big one.
- Things are getting weird with the lawyer for Stormy Daniels considering running for President.
- Trouble brewing in Europe for the euro and EM currencies as the issues with the Turkish lira are beginning to worry traders. EU banking exposure under scrutiny.
- UK Department store House of Fraser has less than two weeks to avoid collapse. Aerospace sales dominated UK arms exports, making up 87% of the total, compared with just 7% for naval equipment and 6% for land warfare sales.
- UK sales of defence equipment to foreign customers surged 53% last year to £9bn, confirming the UK’s position as one of the world’s top arms exporters.
- Russia vows to retaliate against the US on sanctions. Europe starting to get worried.
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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