MID MORNING MARKETS 20-08-18

The ASX200 is up 6 points in mid-morning trade after being up 18 earlier. Positive moves in global markets. Materials stage a recovery, banks mixed and no +ve WOW factor. ECX offer, WES ex-div, AUD on the rise, lots of results but quiet on economic front #ausbiz

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TODAY

  • Ex-dividend – Domino’s Pizza Enterprises (DMP) 49.7c, Flagship Investments (FSI) 4.0c, IOOF (IFL) 27.0c, Wesfarmers (WES) 120.0c

TONIGHT

  • European Construction Output

COMPANY NEWS

  • Eclipx (ECX) – Has received an unsolicited, non-binding and indicative proposal from SG Fleet at $2.00 cash and 0.15 SG Fleet shares, currently values ECX at $2.52, a premium of 17.8% to the last closing price of $2.14 on Friday. The Board has considered the proposal and concluded that the terms, in particular the price, were inadequate and not in the best interests of shareholders. The Eclipx Board has therefore rejected the proposal.
  • Woolworths (WOW) “In Australian Food, sales in the first seven weeks of Q1’19 slowed as customers adjusted to the removal of single-use plastic bags, the impact of a competitor continuity program, meat and fruit and vegetable deflation and the cycling of Earn and Learn in the prior year. We expect sales momentum to improve over the course of the half and are confident that we have strong plans in place to be ‘consistently good’ at the fundamentals and drive further shopping differentiation relative to our competitors.

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THIS WEEK

It’s very quiet on the economic front.

  • Domestically, RBA Meeting minutes on Tuesday, with the Westpac Leading index and construction data on Wednesday
  • Japanese manufacturing PMI index, along with the leading index on Thursday and inflation on Friday
  • European PMI indices and consumer confidence
  • US existing and index home sales and durable goods orders.

Results season – The key ones include Woolworths (WOW), Amcor (AMC), BHP Billiton (BHP), Oil Search (OSH), Newcrest Mining (NCM), Sydney Airport (SYD), WorleyPArsons (WOR), Flight Centre (FLT), Santos (STO), Medibank (MPL),

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LAST WEEK

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RESULTS SEASON SCORECARD

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OVERNIGHT

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SPI FUTURES +28

US EQUITIES – S&P500 +9 (+0.33%), Dow Jones +111 (+0.43%), Nasdaq +10 (+0.13%).

Main themes

  • More reports that US and Chinese officials are working on a plan to resolve trade disagreements ahead of multilateral meetings in November
  • Turkish lira resumes downward trend against the dollar following three-day rebound (USD +3.42% to 6.032)

EUROPEAN MARKETS – Mostly lower. UK FTSE +0.03%, German DAX -0.22%, French CAC -0.08%.

CURRENCIES

  • The US dollar was down 0.5% at 96.13
  • The Aussie dollar is stronger at 73.21.

BONDS – 2-yr: +1 bp to 2.62%, 5-yr: UNCH at 2.75%, 10-yr: UNCH at 2.87%, 30-yr: UNCH at 3.03%

COMMODITIES

  • WTI crude futures closed up US45c higher at US$65.91 a barrel, after touching a session high of $66.39 earlier. Oil was down 2.7% over the week, its longest losing streak in three years. The Baker Hughes rig count was unchanged at 869 rigs.
  • Iron Ore – IRESS reports iron ore down US50c at US$67.50 a tonne. The CommSec site says China Import (Fines 62% Fe) was up US65c at US$67.50/dry ton. (CFR Tianjin port)
  • LME metals – Mixed. Cu -0.20%, Ni +1.16%, Al +-0.88%

ECONOMIC DATA, NEWS & POLITICS

  • US economic data – Leading Indicators 0.6% (consensus 0.5%; prior 0.5%) and preliminary August Michigan Consumer Sentiment Index 95.3 (consensus 97.8; prior 97.9)
  • ECB member Valdis Dombrovskis said I was unlikely a market union would be created by 2019 due to a slow approval process on the part of local governments
  • European data – June Current Account surplus €23.50bn (expected surplus of €23.20bn; last surplus of €24.40bn). July CPI -0.3% (as expected, last 0.1%) to be +2.1%yoy (as expected, last 2.1%). July core CPI -0.5% (as expected, last 0.0%) to be +1.1%yoy  (as expected, last 1.1%)

QUOTE OF THE DAY

“Focus is a matter of deciding what things you’re not going to do.” – John Carmack, American scientist born this day in 1970.

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