The ASX200 is up 23 points in mid-morning trade after a strong US market performance. Banks and materials both leading the way. Telcos and Energy lagging. VRL trading halt ahead of raising, MFG FUM, TGR court result. #ausbiz



  • Japanese data – Current account and bank lending


  • ECB Draghi speech
  • US consumer credit
  • US Fed Speak – Kashkari


  • Village Roadshow (VRL) – Trading halt in relation to a capital raising.
  • Magellan Financial (MFG) – Total FUM +3.2%. Net inflows were $218m, which included net retail inflows of $4m and net institutional inflows of $214m. MFG distributions $755 million in July, which will be reflected in the FUM figures in next month’s announcement. Performance fees $40m for FY18.


  • Tassal Group (TGR) – Has won a Federal Court Case brought by Huon Aquaculture (against the Commonwealth Minister) regarding expansion of salmon farming in Macquarie Harbour. TGR was a party to the case
  • Independence Group (IGO) – Preliminary metal production for the quarter.


  • Infigen Energy (IFN) – June production


  • Thorn Group (TGA) – Responds to media speculation, saying there is no substance to the story in The Australian’s Business Review section to the effect that it is moving to sell its consumer leasing division, Radio Rentals.


  • Class (CL1 $2.27) – Morgans has an Add recommendation with a target price of $2.73 (from $2.77) – The analyst notes that June Q new customer additions were the weakest since 2015 and they’ve lowered forecasts, pointing to accountants still struggling with last year’s changes to the superannuation regime.


  • Link Administration (LNK $7.53) – Morgan Stanley has an Overweight recommendation with a target price of $9.00. The analyst thinks that AustSafe Super and Sun Super merging will be negative – and SunSuper will end its outsourcing relation ship with LNK. They expect a 1% impact on FY20 EPS.


  • Elders (ELD $7.06) – Morgans has a Hold recommendation with a target price of $7.05 (from $7.70). The analyst notes that the recent trading update reinforces sensitivity to seasonal conditions and commodity prices and they’ve cut earnings forecasts by 4.5%. They point out that the possible acquisition of PG Wrightson would probably require a significant capital raising, so share price affects the attractiveness of any deal.


  • Nextdc (NXT $7.31) – Morgan Stanley has an Overweight recommendation with a target price of $9.20. NXT has announced greater connectivity with Google Cloud, with domestic public cloud computing power given directly to an Australian data centre, rather than just offering an on-ramp to all but enterprise customers. The MS analyst believes this will improve connectivity, bandwidth and latency for the bulk of NextDC customers.








US EQUITIES – S&P500 +23 (+0.85%), Dow Jones +100 (+0.41%), Nasdaq +102 (+1.34%).

Main themes

  • Broad-based gains – all sector higher
  • The US implemented tariffs on $34bn wroth of Chinese goods on Friday
  • Employment report – Strong increase in payrolls (+213k), but average hourly earnings growth remained subdued (2.7%yoy) and the unemployment rate ticked up

EUROPEAN MARKETS – All stronger. STOXX 600 +0.20%, UK FTSE +0.19%, German DAX +0.26%, French CAC +0.18%.


  • The US dollar was weaker at 93.967
  • The Aussie dollar was stronger at US74.36c.

BONDS – 2-yr: -3 bps to 2.53%; 5-yr: -2 bps to 2.72%, 10-yr: -1 bp to 2.83%, 30-yr: -1 bp to 2.94%


  • WTI crude futures closed up US86c or 1.2% to US$73.80. The Baker Hughes rig count rose by 5 rigs to a total of 863.
  • Gold futures were down US$3.00 at $1,255.80.
  • Iron Ore – IRESS reports iron unchanged at US$67.00 a tonne. The CommSec site says China Import (Fines 62% Fe) was up 15c at US$62.65/dry ton. (CFR Tianjin port)
  • LME metals – Mixed. Cu -0.99%, Ni -1.76% and Al flat


  • US economic data – June Nonfarm Payrolls 213K (consensus 195K; prior 244K revised from 223K), Nonfarm Private Payrolls 202K (consensus 192K; prior 239K), Unemployment Rate 4.0% (consensus 3.8%; prior 3.8%), Average Hourly Earnings 0.2% (consensus 0.3%; prior 0.3%), Average Workweek 34.5 (consensus 34.5; prior 34.5), and May Trade Balance -$43.10bn (consensus -$43.60bn; prior -$46.20bn)
  • European data – German May Industrial Production +2.6% (expected +0.3%; prior -1.3%); French May Trade Balance Report -€6.0bn (expected -€5.10bn; prior -€5.20bn); Italian May Retail Sales +0.8% (expected +0.3%; prior -0.6%); UK June Halifax House Price Index +0.3% (expected +0.3%; prior +1.7%) to be +1.8%yoy (expected +1.8%; prior +1.9%)
  • Biogen (+19.6%) surged after announcing encouraging Phase II trial results for its Alzheimer’s drug.


“If we were to select the most intelligent, imaginative, energetic, and emotionally stable third of mankind, all races would be present.” – Franz Boas, German-American anthropologist born this day in 1858. Died 22 December 1942


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