MID MORNING MARKETS

Today was the first Merricks Capital training session. A ripper of a day and a great workout from the team. Keep up to date with out fitness updates on my other blog…

The ASX 200 is up 11 points in late-morning trade after small moves o/n. Energy worst, Gold, h/care and Utilities best. Qs from Rio (ok) and BKL (ko). COH launches new implant, RBA minutes today and US IP tonight #ausbiz

m1m2m3TODAY

  • RBA Meeting Minutes – the market is expecting a confirmation of the more dovish tone we have been hearning and could reinforce expectations of an RBA cut later this year.
  • Ex-dividend – Katana Capital (KAT) 0.5c
  • Chinese data – House Price Index

TONIGHT

  • UK – Average Earnings incl. Bonus, Unemployment Rate, Employment Change
  • European data – ZEW Economic Sentiment Index, Construction Output
  • US economic data – Capacity Utilization, Industrial Production
  • US earnings Bank of America (BAC), BlackRock (BLK), Charles Schwab (SCHW), Johnson & Johnson (JNJ), UnitedHealth (UNH), After The Close – CSX, IBM, Netflix (NFLX)
  • Fed Speak – Dallas Fed President Robert Kaplan

COMPANY NEW

  • Rio Tinto (RIO) – Downgrade to 2019 guidance to between 333-343mt. “Our iron ore business faced several challenges at the start of this year, particularly from tropical cyclones. As a result, and following the continuing assessment of
    damage at the port resulting from the cyclones and other minor disruptions..;

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  • Cochlear (COH) – Announced the launch of the Nucleus® Profile™ Plus Series cochlear implant, designed for routine 1.5 and 3 Tesla magnetic resonance imaging scans without the need to remove the internal magnet. Commercial availability commences in Germany with other European countries to follow over the coming months. The Nucleus Profile Plus series implant is expected to be launched across other developed markets over the coming months, subject to the timing of regulatory approvals.
  • Blackmores (BKL) – Weaker 3Q but expect FY revenue growth. Profit for the first nine months of $44 million, down 14% on pcp, with revenue up 6% to $460m. Q Profit was down 43% to $10 million, revenue was down 4% to $141m, operating expenses were lower by 1% (and we continue to invest in our brands. “The third quarter has been challenging for the company. However, we firmly believe that this result does not reflect the long-term growth potential of the business…our outlook is for modest full-year revenue growth. We do not expect the second half profit performance to be ahead of the first half result. We are accelerating our plan to streamline the business and target $60 million in savings over three years. This program is now well underway and will help us address changing market dynamics. Implementation will incur some one-off costs in Q4.”
  • Transurban (TCL) – March Q update. Average Daily Traffic (ADT) increased by 2.3%, with growth achieved across all markets.
  • Oil Search (OSH) – March Q report. Total production -3%, sales -15% and revenue -21%. Landmark Papua LNG Gas Agreement signed, Focus on finalising the P’nyang Gas Agreement and other Joint Venture agreements, PNG LNG production remains well above nameplate, Revenues impacted by timing of LNG shipments and lower realised prices, Mid-term LNG sales and purchase agreement signed, Significant gas discovery made at Muruk 2, Alaskan drilling programme confirms oil, with likely resource upgrade, Strong financial position underpins growth project investmen
  • CIMIC Group (CIM) –

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OVERNIGHT

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SPI FUTURES -18

US EQUITIES – S&P 500 -4 (-0.15%), Dow -48 (-0.18%), NASDAQ -16 (-0.20%)

Main themes –

  • Lacklustre results from Goldman Sachs and Citigroup
  • Trade – Treasury Secretary Steve Mnuchin suggested US-China trade talks are nearing a conclusion; US reportedly tempers demand for China to curtail use of industrial subsidies. Still a lot of work left ahead

EUROPEAN MARKETS – All higher. STOXX600 +0.15%, UK FTSE +0.00%, German DAX +0.17%, French CAC +0.11%.

CURRENCIES

  • The USD is little changed at 96.94
  • The Aussie dollar is also little changed at US71.73.

BONDS – 2-yr: +4 bps to 2.39%, 3-yr: +5 bps to 2.36%, 5-yr: +6 bps to 2.38%, 10-yr: +6 bps to 2.56%, 30-yr: +3 bps to 2.97%

COMMODITIES

  • Oil – WTI futures closed down 49c or 0.5% at US$63.40 after Russia’s finance minister saids Russia and OPEC may decide to increase production at their June meeting.
  • Gold – Futures closed down US$3.90 at US$1,291.30
  • Iron Ore – IRESS reports that iron ore was unchanged up US50 at US$95.50. CommSec reports iron ore was unchanged at U$95.80.
  • LME metals – Mostly weaker. Copper -0.30%, nickel -0.23%, aluminium -0.05%

ECONOMIC DATA, NEWS & POLITICS

  • US economic data – Empire State Manufacturing Survey for April 10.1 (consensus 9.0; Prior 3.7);
  • Fed speak – Chicago Fed President Evans (FOMC voter) says inflation is weaker than what he would like and that he can see the fed funds rate remaining unchanged through the fall of 2020.
  • US earnings – Goldman Sachs (-3.6%) reported better-than-expected earnings, but revenue came in below analyst expectations as sales from its institutional clients division dropped by 18%. Citigroup (-0.1%) earnings topped expectations as the company repurchased more than $4bn in stock. There was some disappointment that a 20% fall in its equity trading division contributed to a 2% fall in overall revenue. 85% of those companies that have reported have topped analyst earnings expectations.
  • Central banks – US President Trump continued to criticise the Fed’s handling of monetary policy; ECB President Draghi expressed concerns about political pressure threatening independence of central banks
  • S&P affirmed Germany ‘AAA’/A-1+’ ratings with outlook stable

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