The ASX 200 is up 70 points in mid morning trade, well of the highs, after positive trade developments over the weekend. Gold -ve but the rest strong. GNC takeover, MTS result, houses still falling. Big week ahead with GDP and RBA, anD US jobs.#ausbiz



CoreLogic House Prices – Down 0.7% in the month and 3.8% overall for the year. Dominated by falls in Sydney, Melbourne and Perth.  Sydney house prices down 1.4%, the largest fall since May 20014. Sydney house prices are down 8.1% over the year.



Chinese PMI – Official manufacturing PMI came in at 50.0 suggesting the manufacturing sector has stalled for the first time in 2 years. The lowest since early 2016.

New export orders shrank for a sixth straight month, although there was an improvement from 46.9 to 47.0.

Chinese authorities are taking steps to rein in speculative excess in the Chinese economy. This report will contribute to the market’s thinking about the impact (or lack thereof) of those efforts. A deceleration from the prior month will play into concerns about protectionist trade actions and the relative weakness of major economies outside the U.S.

A weak manufacturing report from China will feed the peak-growth narrative and possibly elicit concerns about weakness in foreign economies spilling over to the U.S.

China’s exports have been surprisingly resilient so far this year as shippers rush out goods to beat US tariffs, but orders have been slumping for months, raising the risk of a sharp drop soon if the U.S. raises tariffs as planned on Jan. 1.


Housing credit – Overall slowed to 5.1%, with OO down to 7.0% from 7.3% and investor lending growth at 1.3% form 1.4%.



  • Economic data – AIG Manufacturing Index, Building Permits, Business Inventories, Company Gross Profits, ANZ Job Advertisements
  • Ex-divided – Morphic Ethical Equities Fund (MEC) 1.0c, NB Global Corporate Income Trust (NBI) 0.9c
  • Japanese data – Capital Spending, Nikkei Manufacturing PMI Final
  • China – Caixin Manufacturing PMI


  • European data – Markit Manufacturing PMI Final
  • UK Markit/CIPS Manufacturing PMI
  • US data – ISM Index, Construction Spending
  • Fed Speak – New York Fed President John Williams (FOMC voter)


  • G20 meeting – Range of issues discussed. Trump agreed to delay (for 90 days) raising rate of tariffs on $200bn worth imports form 10% to 25% on January 1. “Over the next 90 days, American and Chinese officials will continue to negotiate lingering disagreements on technology transfer, intellectual property and agriculture…Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.” The White House said ““China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately,”
  • Graincorp (GNC) – Takeover offer from Long Term Asset Partners at $10.42. The Board hasn’t formed a view.
  • Metcash (MTS) – Revenue up 2.2% to $6.2bn (up 2.3% pre AASB15), Underlying profit after tax up 1.2% to $100.3m (up 2.0% pre AASB15); Statutory profit after tax up 3.0% to $95.8m (up 3.9% pre AASB15); Group EBIT up 1.2% to $158.1m (up 1.9% pre AASB15); Food EBIT up 2.4% to $93.0m (up 1.0% pre AASB15) – Working Smarter program continued to deliver savings; Hardware EBIT up 34.0% to $37.8m (up 37.6% pre AASB15) – additional synergies from HTH acquisition and underlying earnings growth; Liquor EBIT down 1.0% to $29.1m (up 5.4% pre AASB15) – continued growth in IBA network; Working Smarter program on track to deliver ~$125m savings by end of FY19; Solid operating cashflows; Strong balance sheet; $150m Off-Market Buy-Back in August 2018; Interim dividend of 6.5 cents per share, fully franked. Highly competitive conditions expected to continue. 2H19 EBIT to be impacted by ~$8m of incremental investment by the Supermarkets business in growth opportunities.


  • A2 Milk (A2M) – Notes further implementation policy guidance provided by the Chinese Government on 30 November 2018 regarding the new cross border e-commerce (CBEC) law. The new laws come into effect on 1 January. English label products can be sold as long as a Chinese translation is available online, and that consumer acknowledge the product may not comply with China’s regulations. Products must also be traceable and returnable.


  • Primary Health Care (PRY) – Name change to Heaalius Limited (HLS). Code change will occur shortly.
  • Bluescope Steel (BSL) – New buy-Back of up to $250m.


Global markets last week – US 10 year under 3%, $A above 73c. S&P500 +4.9%. Big drop in iron ore (-11.6%), Tech related ↑. Amazon +12.52%.


Local market last week – Huge underperformance. Small companies strong. Tech sector best. Banks OK (2nd week), COL fizzes (as does CCL),



  • RBA meets on Tuesday, followed by GDP on Wednesday. Retail sales and trade data on Thursday and housing data on Friday
  • Chinese – Caixin PMI numbers
  • European – Markit PMI, retail sales, and employment final GDP on Friday.
  • US – ISM and jobs numbers will be the main focus





US EQUITIES – S&P 500 +22 (+0.82%), Dow +200 (+0.79%), NASDAQ +57 (+0.79%)

Main themes

Market strength on optimism ahead of Saturday dinner meeting between President Trump and President Xi Jinping at G20 Leaders Summit. US Trade Representative Robert Lighthizer said he expected the meeting to be a “success,” raising hopes that a trade truce between the world’s largest economies could be struck. But there are concerns due to the attendance at the dinner of Peter Navarro who is seen as contentious in light of his aggressive stance towards China.

EUROPEAN MARKETS – Mostly lower. STOXX500 -0.17%, UK FTSE -0.83%, German DAX -0.36%, French CAC +0.05%.


  • The USD was stronger at 97.20.
  • The Aussie dollar is weaker at US73.09c.

BONDS – 10-yr note testing 3.00% level in a curve-flattening trade. 2-yr: +1 bp to 2.81%, 5-yr: -2 bps to 2.84%, 10-yr: -3 bps to 3.01%; 30-yr: -2 bps to 3.31%,


  • WTI crude futures were down US52c or 1.0% at US$50.93, after briefly trading below US$50.00, despite widespread expectations that OPEC and Russia will cut production at their meeting next week. It has been the weakest month for oil in 10 years.
  • Iron Ore – IRESS reports iron ore was up US$1.50 at US$65.00 a tonne. The CommSec site says China Import (Fines 62% Fe) was downUS65c at US$65.65 dry ton. (CFR Tianjin port)
  • LME metals – Cu -0.23%, Ni +1.31%, Al +0.93%


  • US economic data – Chicago PMI for November 66.4 (consensus 58.0; Prior 58.4)
  • Eurozone data – November CPI +2.0% (expected 2.1%; last 2.2%), Weaker than expected and raised concerns about slowing growth.

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