Short edition today…first day back

The ASX 200 is up 27 points in mid-market trade after another positive overnight session. Defensive sectors drag but most others ↑. TWE OCC out, SM earnings downdate and Chinese GDP later today. Happy to be back…sort of. #ausbiz



Chinese data the main feature

m3US markets closed tonight for the Martin Luther King holiday.


  • Domestically, employment data on Thursday will be the major highlight. Consensus is for 20K new jobs
  • Chinese growth is out today along with retail sales and industrial production
  • Bank of Japan meeting on Wednesday – the BoJ is expected to lower its inflation forecast.
  • US shutdown is delaying the release of some numbers.
  • US earnings results – American Airlines, DR Horton, Intel, Johnson & Johnson, Procter & Gamble, Ford, Freeport-McMoran, ResMed


  • Ausdril (ASL) – Has secured the following mining services contracts totalling $171m
  • Sims Metal Management (SGM) – expects 1H FY19 underlying EBIT of approximately $110m, reflecting fall of 12% of pcp. Will also be providing greater transparency over its North America Metals and Global Trading segments, as well as presenting underlying results to exclude the impact of financial hedges that do not qualify for hedge accounting.
  • Treasury Wine Estates (TWE) – COO Robert Foye has breached TWE’s internal policies and will be leaving the company immediately. Also commented on earnings – happy with the trading performance across all operating regions; results for 1H19 will reflect a performance above consensus EBITS of A$332m, and will be within the range of A$335m to A$340m; andFull year guidance of approximately 25% reported EBITS growth for fiscal 2019 is reiterated.




US EQUITIES – S&P 500 +35 (+1.32%), Dow +336 (+1.38%), NASDAQ +73 (+1.03%)

Main themes

  • Continued strength on yesterday’s Wall Street Journal report, which suggested that tariffs on imports from China could be lifted to hasten negotiations, even though the Treasury Department was quick to refute that claim. Followed by a Bloomberg report that during the recent talks in Beijing, Chinese officials offered to significantly increase China’s imports from the United States for a six-year period in order to eliminate the trade imbalance.

EUROPEAN MARKETS – Strong rallies. STOXX500 +1.80%, UK FTSE +1.95%, German DAX +2.63%, French CAC +1.70%.


  • The USD is 0.1% weaker at 96.36.
  • The Aussie dollar is stronger at US71.71c (Low yesterday of 67.447c).

BONDS – All weaker. 2-yr: +5 bps to 2.61%, 3-yr: +5 bps to 2.60%, 5-yr: +5 bps to 2.62%, 10-yr: +4 bps to 2.78%, 30-yr: +2 bps to 3.10%


  • WTI crude futures were up US$1.73 or 3.3% to $53.80 on positive US-China trade news.
  • Gold is down US$2.20 or 0.17% at $1287.70
  • Iron Ore – IRESS reports iron ore was unchanged at US$74.00 a tonne. CommSec rerpots iron ore up by US$1.20 or 1.6% to US$75.95.
  • LME metals – Mostly stronger. Copper +1.00%, nickel+1.98%, aluminium +0.65%


  • US economic data – December Industrial Production 0.3% (consensus 0.2%; prior 0.4%) and Capacity Utilization 78.7% (consensus 78.5%; prior 78.6%); January Preliminary Michigan Consumer Sentiment 90.7 (consensus 96.0; prior 98.3)
  • Earnings results – Mixed performance from American Express (1.00%) and Netflix (-3.99%). Tesla fell 13% after declaring EPS would decline and intentions to lay off 7% of its workforce
  • Brexit – PM Theresa May has reportedly been warned by up to 20 MPs that mass resignations could happen if she blocks them from trying to prevent a ‘no deal’ Brexit. Meanwhile, Northern Ireland’s DUP has reportedly shown willingness to accept a soft Brexit that would keep the entire UK in the customs union.
  • Confirmation that President Trump plans to meet with North Korea’s Chairman Kim Jong-un at the end of February. The location of the meeting will be announced at a later date.


“If you risk nothing, then you risk everything.” – Geena Davis, American actress born this day in 1956.


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