RunningMoney

The ASX200 is up 48 points in early trade. Strength is broad-based but led by Gold, Materials and Energy. Result mayhem! TLS ok. SUN, SHL, HSO not so #ausbiz

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TODAY

• Employment Data – Expectations for 15.3K new jobs and for the unemployment rate to remain at 5.5%

• Ex-dividend – Ironbark Capital (IBC) 1.1c, Janus Henderson Group (JHG) 40.8c, Mineral Resources (MIN) 25.0c.
• Japanese capacity utilisation and industrial production

TONIGHT

• European – Balance of trade
• US – PPI, industrial production, capacity utilisation, empire manufacturing index, Phily Fed index

COMPANY NEWS

• ASX Limited (ASX) – Net profit up 5.1% to $230.5m Consensus est $229m, Citi est $226m). Operating revenue up 5.8%. Profit lifted by capital raisings and futures trading. Dividend $1.072.
• Breville Group Ltd (BRG) – Profit up 7.8% to $36.3m (Consensus est $37.2m, Citi est $37.2m)
• 3P Learning Ltd (3PL) – !H net profit more than doubles to $4.8m. No interim dividend.
• Evolution Mining Ltd (EVN) – 1H net profit down 10%
• Healthscope Limited (HSO) – 1H net profit down 13% to $77.5m (Citi estimate $87m). Interim dividned 3.2c. Operating EBITDA to be higher in FY19.  Expects FY18 operating EBITDA from hospitals in line with FY17.
• IPH Limited (IPH) – 1H net profit down 11% to $19.7m. (Consensus est $29m). Dividend 11..5c.
• Mantra (MTR) – 1H net profit down 18% to $25.1
• McGrath (MEA) – 1H net loss of $25.5 versus $2.7m proft a year ago.
• Origin Energy (ORG) – 1H net loss of $207m, better than previous loss of $1.56m. Includes impairment charge of $533m so underlying NPAT was $428m. (Citi est $589m). Revenue up 19%. Forecast for FY Energy Markets underlying EBITDA $1.78-1.85bn. Has affirmed guidance for its share of APLNG of 245-265 petajoules and says its on track to reduce net debt below $7bn before year FY18. Sees CAPEX $360-420m.
• South32 Limited (S32) – 1H net profit down 12% to US$543m. US$93m buy back and special dividend of 3c in addition to 4.3c interim dividned. Net cash balance US$1.4m Group output volume seenmarginally higher in 2H18. Says separation of South Africa Energy well advanced.
• Sonic Healthcare (SHL)- 1H net profit up 16% to $228.6m (Citi est $230m). Dividend 32c. Reflects healthy demand for Australian pathology services and minimal pain from an overhaul of Medicare fees in the US. EBITDA rose 7.9% to $348.6m on a constant currency basis. $20m one-off benefit from US tax law change. Outlook – On track to achieve FY17 earnings guidance
• Suncorp Group Ltd (SUN) – 1H net profit down 15.8% to $452m. (Consensus est $580.33m, Citi est 488m). Hit from Vic hail storms. 1H revenue down 9.2%. Targets cash return on equity 10%. Outlook stronger for the second half. 1H natural hazards were $65m above the allowance for the period. Expects profit rebound after claims hit.
• Telstra Corporation (TLS) – Net profit fell 4.9% to $1.7bn (Consensus est $1148m, Citi est $1473m). Revenue up 0.8%. 1H results in line with guidance. Profit hit by impairment from NBN rollout. Mobile sales revenue grew by 0.8%.  Mobile broadband revenue declined 8.6% despite an increase in customers. Going forward – increased focus on cutting costs and accelerating investment. Has reaffirmed FY2018 guidance income of $27.629.5bn and EBITDA $10.1-10.6bn. Most importantly – dividend was kept at 11c comprising a 7.5c interim and a 3.5c special. Dividend of 22c has been reaffirmed.
• Graincorp (GNC) – Has forecasts underlying NPAT of $50-70m (down from %142m in 2017)and underlying EBITDA of $240-265m.
• Cimic Group (CIM) – Awarded $170m contract for solar farm by Equis Energy

BROKER CHANGES

• Woodside Petroleum (WPL) – UBS has raised its target price by 7.6% to $35.3. Citi has cut its target price by 2.6% to $25.85. Shaw & Partners raised its target price by 5.7% to $37.00
• Insurance Australia Group (IAG) – Bell Potter has upgraded to a Buy (from Hold) recommendation and raised its target price by 5.2% to $8.15.UBS has raised its target price by 4.3% to $7.30. Citi has raised its target price by 3.4% to $7.50
• Goodman Group (GMG) – UBS has raised its target price by 1.8% to $8.45. Citi has raised its target price by 2.5% to $9.66. Shaw & Partners raised its target by 3.5% to $8.48
• Orora (ORA) – Citi has raised its price target by 2.8% to $3.70.
• Fletcher Building (FBU) – UBS has cuts its target price by 7.2% to NZ$7.75
• Domino’s Pizza (DMP) – UBS has cut its target price by 4.2% to $57.50. Citi has raised its target price by 4.8% to $43.60. Bell Potter has cut its target price by 4.4% to $54.00
• CSL – UBS has raised its target price by 5.4% to $155.00. Citi has raised its target price by 6.1% to $175.00. Macquaire has raised its target price by MAcquarie
• Computershare (CPU) – UBS has raised its target price by 13% to $17.10.

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OVERNIGHT

SPI FUTURES +55

US EQUITIES – S&P500 +36 (+1.34%), Dow Jones +253 (+1.03%). Nasdaq +130 (+1.86%)

Main themes –

• Sold off again with the 10 yield up 8 basis points after stronger CPI data…although retails sales data was worse than expected.
• Stocks didn’t sell off however on the inflation/rate-hike concerns.

EUROPEAN MARKETS – All higher. STOXX +1.07%, UK FTSE +0.64%, German Dax +1.17%, French CAC +1.10%.

CURRENCIES

• The US dollar closed down another 0.76% at 89.02 – an interesting move in light of the higher CPI read. Shows prices are driven by liquidity rather than valuation.
• The Aussie dollar has rallied 0.86% to 79.25.

BONDS –2-yr: +8 bps to 2.17%, 5-yr: +11 bps to 2.64%, 10-yr: +8 bps to 2.91%, 30-yr: +3 bps to 3.17%

COMMODITIES

• WTI oil rallied 2.4% or US$1.41 to US$60.60. Weekly Crude Inventories +1.8MB compared to expectations of a 2.8MB increase
• Gold was up 1.68% at US$1352.70
• Iron ore up US40c to $78.30.
• LME metals saw considerable strength – copper +2.52%, aluminium +1.78%, nickel +4.83%

ECONOMIC DATA, NEWS & POLITICS

• Inflation data – January CPI 0.5% (consensus 0.4%; prior 0.2%) and is up 2.1% over the year (which is down from 2.2% for the year ending in December). Core CPI 0.3% (consensus 0.2%; prior 0.1%). Core CPI was up 1.8% and has now been up 1.7% or 1.8% for nine consecutive months.
• Other US economic data – January Retail Sales -0.3% (consensus 0.2%; prior 0.0% revised from 0.4%), and Retail Sales ex-auto -0.2% (consensus 0.4%; prior 0.1%), Weekly MBA Mortgage Index -4.1% (prior 0.7%), December Business Inventories 0.4% (consensus 0.3%; prior 0.4%)
• European data – Eurozone Q4 GDP +0.6% as expected (last 0.6%) and +2.7%yoy as expected (last 2.7%). December Industrial Production +0.4% (expected 0.1%; last 1.3%) and +5.2%yoy (consensus 4.2%; last 3.7%); Germany’s Q4 GDP +0.6% as expected (last 0.7%) and +2.3%yoy as expected (last 2.2%). German CPI -0.7% as expected (last -0.7%) and +1.6%yoy as expected (last 1.6%)
• Market closures – Markets in China, Hong Kong, and South Korea will be closed tomorrow and Friday for Lunar New Year celebrations.

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QUOTE OF THE DAY

“I have never met a man so ignorant that I couldn’t learn something from him.” – Galileo Galilei, Italian scientist born this day in 1564. Died 8 January 1642