The ASX 200 is up 17 points in mid morning trade after a decline in US/Russia tensions overnight. But the are all subject to to any “tweet” twitters. Banks flattish, Materials  outperform. FBU up on rumours on WES holding and broker upgrade. NEC loses the cricket to SWM #ausbiz


  • RBA Financial Stability Review
  • Exdividend – Turners (TRA) 3.6c
  • Chinese trade data


  • German Inflation Rate
  • US economic data – JOLTS – Job Openings, University of Michigan Consumer Sentiment
  • US earnings – Citigroup, JP Morgan Chase, Wells Fargo
  • Fed Speak – Boston Fed President (alternate voter) Eric Rosengren, St. Louis Fed President (alternate voter) James Bullard, Dallas Fed President (alternate voter in 2019) Robert Kaplan


  • Wesfarmers (WES) – Media reports that it has bought a 3-4% holding in Fletcher Building (FU), which is rallying, but FBU has also received an upgrade from Forsyth Barr.
  • Xero (XRO) – Has appointed UK-based entrepreneur Dale Murray as a non-executive director.
  • Treasury Wines Estates (TWE) – Has appointed Matt Young as Chief Financial Officer (formerly Deputy CFO). He replaces Gunther Burghardt, who is transitioning from CFO to the role of Executive Vice President, Operations – Americas.
  • CIMIC (CIM) – AGM. Company in sound position for growth, economic growth in Australia boosting Infrastructure spend sustainable returns, Reiterates 2018 profit guidance.
  • Santos (STO)/Oil Search (OSH) – PNG LNG has restarted production ahead of schedule
  • Nine Entertainment (NEC) – Confirms that it has not been granted rights in relation to Australian international cricket matches from the 2018/19 summer. This will have no impact on NEC’s FY18 results. It is not possible for NEC to give an indication of likely impact on FY19 at this time


  • Aurizon (AZJ $4.34( – Morgans has a Hold recommendation with a target price of $4.55 (from $4.81). The analyst thinks the recent decline in the share price can be attributed to the UT5 draft decision, the finalisation of the buyback and the early closure of Cliffs. They see valuation support at current share prices but find it hard to get bullish on the stock.
  • Bubs Australia (BUB 83c) Morgans has a Hold recommendation with a target price of 75c. BUB has reported strong headline growth in the third quarter, supported by the contribution from NuLac Foods, although that business was below the analyst’s expectations because of timing and integration factors. Morgans believes the company is doing a commendable job but requires further organic revenue growth before turning more positive on the stock.
  • Oil Search (OSH $7.59) – Macquarie has an Outperform recommendation with a target price of $8.10. The re-certification of the P’nyang gas field has resulted in a 211% and 84% increase in 1C and 2C resources. The increase in 1C is a key step in justifying the expansion, as Exxon Mobil only usually sanctions projects based on 1C estimates. The analyst believes some of the potential upside is already factored into the share price. The focus now moves to the re-start of PNG LNG, expected in early May.
  • Rio Tinto (RIO $76.70) – Morgans has upgraded to Add (from Hold) recommendation with a target price of $81.51 (from $74.75). The upgrade results from recent share price weakness combined with a lift in earnings. Whilst seeing value at current levels, the analyst retains lingering concerns around the future direction of the company after the exit from coal, amid its interest in entering new markets such as lithium. They also notes that US sanctions banning Americans from dealing with certain Russian entities could result in further tightness in the global aluminium market.
  • G8 Education (GEM) RBC Capital has initiated coverage with a Neutral recommendation and a target price of $3.00. RBC describes GEM as “walking through the valley of darkness” and predict occupancy levels in 2018 will be 150-200 basis points lower than a year ago. Its EBIT forecast is 5% below consensus estimates. “We forecast a weak 1H18 result and await a more attractive entry point once market expectations are rebased.” The analyst says that could come in 2019 if occupancy levels improve as expected, driven by a more favourable child-care funding regime, which is likely to benefit low- and middle-income families




US EQUITIES – S&P500 +22 (+0.83%), Dow Jones +294 (+1.21%), Nasdaq +71 (+1.01%).

Main themes –

  • Markets strengthened after President Trump said US-led attack on Syria could be delayed, but late selling meant markets finished off their highs
  • China’s Ministry of Commerce clarified that the pledge to open economy to foreign investment was unrelated to trade issues with the US
  • BlackRock (1.47% and then +0.56% after hours), Delta Air Lines (+2.93%) beat earnings estimates
  • Financials performed well ahead of key results tonight

EUROPEAN MARKETS – All higher, although the UK underperformed. STOXX 600 +0.70%, UK FTSE +0.02%, German DAX +0.98%, French CAC +0.59%.


  • The US dollar was up 0.23% at 89.78.
  • The Aussie dollar is a little weaker at US77.57c.

BONDS – 2-yr: +3 bps to 2.35%, 5-yr: +5 bps to 2.67%, 10-yr: +4 bps to 2.83%, 30-yr: +3 bps to 3.04%


  • WTI oil rallied a further 0.37% or US25c to US$67.07 supported by increasing tension in the Middle East. OPEC also said the global oil stocks surplus was close to evaporating due to healthy energy demand and its own supply cuts
  • Gold futures were down 1.30% or US$18.10 to US$1,341.90 on strength in the US dollar. Although losses were limited due to geopolitical risks.
  • Iron ore was up US$1.00 at US$66.50
  • LME metals were generally weaker with the exception of aluminium +3.33% which continues to rally. – Copper -0.42%, nickel -1.08%


  • US economic data – March Export Prices ex-agriculture -0.1% (prior 0.2%), Import Prices ex-oil 0.2% (prior 0.5%). While the overall month-over-month changes were on the softer side, the year-over-year changes in core prices reveal a firming inflation trend. Weekly Initial Claims (actual 233K; Briefing.com consensus 230K; prior 242K), and Continuing Claims (actual 1871K; prior 1818K). Nothing in the numbers to disrupt the view that initial claims continue to follow an encouraging trend.
  • In other oil news, OPEC’s monthly report showed oil stocks in the developed world fell by 17.4mb in February to 2.854bb, around 43mb above the latest five-year average. OPEC Secretary-General Mohammad Barkindo told Reuters in New Delhi the global oil glut has effectively shrunk by 90% since the start of 2017.
  • European data – Eurozone February Industrial Production -0.8% (expected 0.1%; last -0.6%) to be up +2.9%yoy (consensus 3.8%; last 3.7%); French March CPI +0.8% (expected 1.0%; last 1.0%) to be up +1.6%yoy (consensus 1.5%; last 1.2%)
  • Indian February Industrial Production +7.1%yoy (expected 7.0%; last 7.4%) and February Manufacturing Output +8.7%mom (last 8.6%). March CPI +4.28%yoy (expected 4.20%; last 4.44%)


“There’s man all over for you, blaming on his boots the fault of his feet.” – Samuel Beckett, Irish playright born this day in 1906. Died December 22, 1989.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s