MID MORNING MARKETS 30-04-19

The ASX 200 is down 25 points in mid-morning trade after a quiet night. IT and H’care slightly +ve,  all else red.  Macquarie confession conference commences. DHG, JBH, AGL ↓. SUL ↑. VOC class action. NEC sells regional rags. Chinese PMI ahead #ausbiz

m1m2m3TODAY

  • Economic data – Private Sector Credit
  • Chinese data – NBS Manufacturing PMI, Non Manufacturing PMI

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  • Japanese – Construction Orders, Housing Starts

TONIGHT

  • UK – Housing Prices
  • European data – GDP Growth Rate, Unemployment Rate
  • US economic data – S&P Case-Shiller Home Price Index, Chicago PMI, Employment Cost Index, Consumer Confidence, Pending Home Sales

MACQUARIE EQUITY CONFERENCE

  • Domain Group (DHG) Trading Update. Trading in the FY19 March quarter (31 December 2018 to 31 March 2019) saw:  Digital revenue in line with prior corresponding period‒ Total revenue down around 6%; For the FY19 March quarter, total new market listings were down nationally with auction volumes down 30% in Sydney and 36% in Melbourne. In this market context: Domain continued to deliver double digit growth in Residential Digital yield, broadly consistent with FY19 H1, offset by the impact of a 13% decline in Domain’s Residential sale listings. ‒ Residential depth revenue growth was 1%. ‒ Print revenue performance reflects these cyclical conditions; Continued investment in growth initiatives (including product development, marketing, and driving sales performance) is being supported by ongoing cost discipline; For FY19, Domain’s underlying costs (excluding investment in new Consumer Solutions businesses) are expected to be down low to mid-single digit against proforma FY18. Total costs are expected to increase low single digit against proforma FY18. These cost expectations are lower than previous guidance provided in February 2019.
  • JB Hi-Fi (JBH) – JB HI-FI Australia: Q3 FY19 total sales growth was 2.6% (Q3 FY18: 7.5%) with comparable sales growth of 1.5% (Q3 FY18: 4.3%); and YTD FY19 total sales growth was 4.1% (YTD FY18: 9.8%) with comparable sales growth of 2.7% (YTD FY18: 6.7%). JB HI-FI New Zealand: Q3 FY19 total sales growth was -1.2% (Q3 FY18: -4.4%) with comparable sales growth of 4.6% (Q3 FY18: -0.6%); and YTD FY19 total sales growth was 3.7% (YTD FY18: -1.7%) with comparable sales growth of 10.2% (YTD FY18: 1.4%). The Good Guys: Q3 FY19 total sales growth was 2.2% (Q3 FY18: -1.3%) with comparable sales growth of 1.0% (Q3 FY18: -2.9%); and YTD FY19 total sales growth was 2.6% (YTD FY18: 1.2%) with comparable sales growth of 1.3% (YTD FY18: 0.3%). FY19 guidance reaffirmed. Total Group NPAT to be in the range of $237 million to $245 million, an increase of 1.6% to 5.1% on the pcp.
  • Super Retail Group (SUL)

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Oooh Media (OML)

  • thers presenting – CSL. Mirvac Group (MGR), Medibank Private (MPL), Tabcorp (TAH), AGL, Dexus (DXS), Newcrest Mining (NCM), Breville Group (BRG), Nufarm (NUF), Southern Cross Austerio (SXL), ASX

OTHER COMPANY NEWS

  • Bubs Australia (BUB) Strong revenue growth driven by infant formula sales to China and domestic Daigou Channel: Q3 gross revenue $11.83M, up 103% prior comparable period (pcp); March FY19 gross revenue $6.91M – the highest of any month on record for the Company; Year-to-date gross revenue $32.87M; Bubs® goat milk infant formula gross sales up 302% pcp, representing 41% of Q3 revenue; Bubs Organic® baby food gross sales up 22% pcp, representing 6% of Q3 revenue; CapriLac® goat milk powder gross sales up 119% pcp, representing 40% of Q3 revenue; Domestic sales up 71% pcp, representing 79% of Q3 revenue; China sales up 884% pcp, representing 20% of Q3 revenue; Emerging export markets up 26% pcp, representing 1% of Q3 revenue
  • Origin (ORG) – Q report.
  • Vocus (VOC) – Served with class action filed by Slater & Gordon. Relates to contraventions of the Corporations Act 2001 (Cth) in relation to misleading or deceptive conduct and continuous disclosure obligations in respect of Vocus’ FY17 earnings guidance.
  • Nine Entertainment (NEC) – Will sell its Australian Community Media and Printing business for around $115m, subject to post-completion adjustments, of which $10m will be paid in 12 months. Will also receive up to $10 million of advertising on ACM properties over the three years from completion.
  • Wisetech Global (WTC) – Has acquired Xware, a leading messaging integration solutions provider in Sweden for ~$12.0m upfront, with a further expected multi-year earn-out potential of ~$11.2m in relation to business integration, strategic objectives and revenue performance. Xware had FY18 annual revenue and EBITDA of ~$3.5m and ~$1.4m respectively, so strategic value but not material
  • Stockland Group (SGP) – Results in line with expectations. Continued improvement in quality of our portfolio, with the divestment of $284.5m of non-core retail town centre assets, on track to achieve $400m target within twelve months;  track to settle over 6,000 residential lots for the full year despite challenging market conditions; Residential sales have declined and are expected to remain weak over calendar year 2019; Solid comparable specialty retail sales growth per square metre of 3.8% for the year to 31 March 2019; Retail leasing conditions remain difficult with negative rental growth associated with remixing; Strong leasing results for Workplace & Logistics, maintaining high occupancy and progressing our development pipeline; Securities buy-back progressing well, completed $169m of $350m target at an average discount to NTA of 8%; In line with our update at the half year, on track to achieve guidance of around 5% FFO growth per security for FY19 which is at the lower end of our original range, reflecting weaker market conditions. This assumes no material deterioration in current market conditions.
  • Bravura Group (BVS) – Guidance reaffirmed

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OVERNIGHT

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SPI FUTURES -1

US EQUITIES – S&P 500 +3 (+0.11%), Dow +11 (+0.20%), NASDAQ +26 (+0.32%).

Main themes –

Quiet ahead of a big week

Alphabet (-5.33% in after hours trade) despite beating on earnings ($11.90 vs $10.61exp) as earnings $36.34bn vs $37.33bn exp). Shares are up 24% this year.

EUROPEAN MARKETS – Mostly higher. STOXX600 +0.08%, UK FTSE +0.17%, German DAX +0.10%, French CAC +0.21%.

CURRENCIES

  • The USD is little changed at 97.84
  • The Aussie dollar is a bit stronger at 70.59.

BONDS – 2-yr: +2 bps to 2.29%, 3-yr: +2 bps to 2.27%, 5-yr: +2 bps to 2.32%, 10-yr: +3 bps to 2.54%, 30-yr: +4 bps to 2.96%

COMMODITIES

  • Oil – WTI futures closed up US20c to US$63.50 a barrel, settling after President Trump said he told OPEC to take action to temper fuel costs.
  • Gld was down 0.6% at US$1,281.50 an ounce.
  • Iron Ore – IRESS has the iron ore price unchanged at US$95.50 a tonne. CommSec reports iron ore was up US55c at U$93.35.
  • LME metals – Mixed. Copper +0.21%, nickel -0.12%, aluminium -0.60%

ECONOMIC DATA, NEWS & POLITICS

  • US economic data – February Personal Spending 0.1% (prior 0.1%), February PCE Price Index 0.1% (prior -0.1%), February Core PCE Price Index 0.1% (prior 0.1%), March Personal Income 0.1% (consensus 0.4%; prior 0.2%), March Personal Spending 0.9% (consensus 0.8%), March PCE Price Index 0.2%, and March Core PCE Price Index actual 0.0%.
  • European stability – Standard & Poor’s affirmed Italy’s BBB rating with a Negative Outlook and affirmed the UK’s AA rating with a Negative Outlook.
  • European economic data – Eurozone’s April Business and Consumer Survey 104.0 (expected 105.0, previous 105.6).
  • Earnings season scorecard – 231 companies (from S&P 500) have reported. Of those, 77.5% have topped analyst expectations, with reported earnings growth rate of around 1%, well above the expected 4.2% drop.

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