MID MORNING MARKETS 18-10-18

The ASX 200 is down 6 in mid-morning trade after weaker leads. Energy ↓ on oil fall, Materials lower and banks and financials ↑. CCP and APT bounce, API results, WPL and STP Q and employment data today #ausbiz

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TODAY

  • Economic data – Employment data

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  • Japanese – Trade data,

TONIGHT

  • US economic data – Philadelphia Fed, Leading Indicators, Existing Home Sales
  • Fed Speak – St. Louis Fed President (alternate voter) James Bullard, Governor (FOMC voter) Randal Quarles

COMPANY NEWS

  • Woodside Petroleum (WPL) – Delivered production of 23.1 MMboe and sales revenue of $1,157 million; Continued to produce ahead of plan at Wheatstone LNG; Entered into three binding domestic gas sales and purchase agreements for 80 petajoules over ten years; Delivered the 5,000th North West Shelf Project LNG cargo; Achieved 99% reliability at the Nganhurra FPSO (Enfield oil).
  • Santos (STO) – SepQ production up 6% to 15 mmboe due to strong performance across the core assets; Sales revenue up 10% to $973 million, including record quarterly LNG revenues of $405 million; PNG LNG achieved record daily rates equivalent to ~9.2 mtpa annualised production
  • Afterpay Touch (APT) – Afterpay welcomes the opportunity to participate in any industry review and is supportive of appropriate regulation; Afterpay’s customer centric service is highly differentiated from other operators; Afterpay supports appropriate regulatory oversight from ASIC; New Zealand Government recognised Afterpay’s model is different to traditional credit and recently decided not to include products like Afterpay under local credit regulations; Our transparent and trust-based approach is reflected by our strong growth (over 2.3m customers and 17,000 merchants) and high levels of customer engagement and satisfaction
  • Steadfast Group (SDF) – Says brokers and underwriting agencies have made a strong start to the year and seeing better than expected first quarter organic growth supported by mid-single digit price rises by insurers. Completed several acquisitions which will make a contribution to FY19 and continue to have a strong pipeline. This has been partially offset by the mark-to-market of our small strategic investment in the ASX listed Johns Lyng Group. Upgrade to FY19 guidance: Underlying EBITA ranging between $190-$200m and underlying NPAT $85-$90m. FY19 first half/second half earnings split is expected to be 42%/48% (43%/47% in FY18) due to seasonality, acquisitions and growing use of the SCTP.
  • Australian Pharmaceutical (APR) – FY results. Underlying1 NPAT of $54.7m, up 0.9% on pcp, Underlying EBIT of $90.5m, down 1.5% on the pcp; Final fully franked dividend of 4.0cps, up 14.3% on pcp; Underlying ROE up 51 bps to 10.29%, from 9.78%. Underlying EPS at 11.1 cents. Underlying return on capital employed was 35 bp slower at 16.54%, from 16.89%; Ongoing cost reductions saw underlying CODB improve 10 bps to 10.3%; Priceline Pharmacy total network sales2 grew 2.1% to more than $2.1bn; Pharmacy Distribution achieved underlying sales growth of 6.4%; Consumer Brands turned around performance with EBIT contribution up $2.1m; Completion of stage 1 of Clearskincare acquisition at end of July
  • Ingham (ING) – AGM

 


OVERNIGHT

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SPI FUTURES -25

US EQUITIES – S&P500 -1 (-0.03), Dow Jones -92 (-0.36%), Nasdaq -3 (-0.04%).

Main themes

  • September FOMC Minutes had hawkish tone

EUROPEAN MARKETS – Mixed. STOXX500 -0.40%, UK FTSE -0.07%, German DAX -0.52%, French CAC -0.54%.

CURRENCIES

  • The US dollar is stronger at 95.66.
  • The Aussie dollar is weaker at 71.11c.

BONDS – 2-yr: +2 bps to 2.88%, 5-yr: +2 bps to 3.04%, 10-yr: +2 bps to 3.18%, 30-yr: +2 bps to 3.35%

COMMODITIES

  • WTI crude futures closed down US$2.17 or 3.0% at US$69.75 after US stockpiles rose by 6.5mb, almost triple what analysts had forecast, while exports dropped to 1.8mbpd. Inventories rose even though production fell 300kbpd to 10.9mbpd.
  • Iron Ore – IRESS reports iron ore was unchanged at US$70.00 a tonne. The CommSec site says China Import (Fines 62% Fe) was up 3.5% to US$74.25/dry ton. (CFR Tianjin port)
  • LME metals – MIxed. Cu +0.06%, Ni -1.75%, Al -0.59%.

ECONOMIC DATA, NEWS & POLITICS

  • US economic data – September Housing Starts 1201K (consensus 1221K; prior 1268K) and Building Permits 1241K (consensus 1273K; prior 1249K)

QUOTE OF THE DAY

“The mark of great sportsmen is not how good they are at their best, but how good they are their worst.” – Martina Navratilova, American athlete born this day in 1956

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