The ASX 200 is up 15 points at midday (but fading) after +ve leads o/night. REITS the worst, IT & Telcos best. Results starting filter through. CCP below guidance EPS, CCV write-downs, BUB. Big week for data, earnings and central banks and I ran a half #ausbiz
- Japanese data – Retail Sales
- UK data – Nationwide Housing Prices, BoE Credit and Lending/Mortgages
- Lynas (LYC) – Q report
- Credit Corp (CCP) – Results. 9% increase in Net Profit after Tax (NPAT) to $70.3 million; 16% increase in the consumer loan book to $212 million; Acceleration in US debt buying (69% increase in collections; 40% increase in investment; 69% increase in year-end headcount); A near tripling in segment NPAT; A return to investment growth in Australian/New Zealand debt buying. Outlook: Expected increases in earnings from the US debt buying and consumer lending divisions will drive strong profit growth in 2020, with guidance for profit growth in the range of 7% to 10%. A return to investment growth in Australian/New Zealand debt buying and signs of competitor stress in that market create the prospect of increased investment across all three business segments. The company retains significant debt headroom and will invest as opportunities arise. At this point the company provides PDL investment guidance in the range of $220 – $240 million.
- Cash Converters (CCV) – Strong revenue growth of 8% with increases in retail sales, pawnbroking interest and demand for financial services products. But growth of the auto lending and personal loan books has meant higher bad debt expense. In 2H, there was a review of its credit scorecards which has tightened approval criteria. Underlying fundamentals of the business remain sound but 2H adjustments will results in a statutory net loss after tax of $2 – $4m (FY2018 $22.5 million profit).
- Bubs (BUB) – FY19 gross revenue totalled $51.3m, a 179% uplift over prior year. Q4 STRATEGIC DEVELOPMENTS: Joint Venture established in China with Beingmate, a leading producer of infant nutrition products; Strategic equity-linked alliance with Chemist Warehouse, securing national ranging of 28 products; Major equity investment by C2 Capital Partners, of which Alibaba Group is an anchor investor; 100% acquisition of Australia Deloraine Dairy, a CNCA licensed infant formula processing facility; Strategic eCommerce partnership with Alibaba Tmall for BubsÒ products; Channel partnership with Kidswant, China’s largest mother and baby store chain; Development of organic grass-fed cow milk infant formula in partnership with Fonterra Australia
- Afterpay Touch (APT) – AUSTRAC update. AUSTRAC has appointed Mr Neil Jeans of Melbourne based specialist AML/CTF firm Initialism as the external auditor to undertake the audit. Mr Jeans was one of the three specialist auditors nominated by Afterpay in accordance with the notice issued by AUSTRAC on 12 June 2019 (“Notice”). As per the timeframes outlined in the Notice, the interim audit report is due by 24 September 2019 and the final audit report is due by 23 November 2019.
- US/China trade talks start Tuesday
- Domestic data – Inflation (a pick-up to 1.5% annually is expected from 1.3% previously)
- Chinese data – Official PMI numbers, Caixin manufacturing index
- Japan – BoJ meeting as well as unemployment, IP
- Bank of England meeting
- Europe – Flash GDP, inflation and unemployment
- US economic data – PCE prices, ISM manufacturing index, trade balance and unemployment
- Investor Days- Orica (ORI)
- Earnings – Alacer Gold (AYC), Credit Corp (CCP), CYB, Genworth Mortgage (GMA), James Hardie (JHX), Uniball-Rodamco-Westfield (URW), Rio Tinto (RIO)
- AGMs – Australian Agriculture (AAC), ALS (ALQ)
- Q production – Infigen Energy (IFN), Independence Gold (IGO), Northern Star (NST), Origin Energy (ORG)
- Tuesday – D.R. Horton (DHI), MasterCard (MA), Merck (MRK), Procter & Gamble (PG), Ralph Lauren (RL), Xerox (XRX). After The Close – Apple (AAPL)
- Wednesday – General Electric (GE), Janus Henderson Group (JHG), Peabody Energy (BTU)
- Thursday – Amcor (AMCR), Archer-Daniels (ADM), General Motors (GM), Kellogg (K), Verizon (VZ), Yum! Brands (YUM). After The Close – Fluor (FLR), U.S. Steel (X)
- Friday – Chevron (CVX), Exxon Mobil (XOM)
SPI FUTURES +19
US EQUITIES – S&P500 +22 (+0.74%), Dow Jones +51 (+0.19%), NASDAQ +92 (+1.11%)
- Stronger than expected GDP
- Alphabet (9.62%), Twitter (+8.92%), Starbucks (+8.94%) surge on positive earnings results
- Amazon (-1.56%) caps broader gains as shares decline after missing earnings estimates
EUROPEAN MARKETS – Mostly higher. STOXX600 +0.31%, UK FTSE +0.80%, German DAX +0.47%, French CAC +0.57%,
- The USD is stronger 97.97.
- The Aussie dollar is lower at US69.12
BONDS – 2-yr: +2 bps to 1.87%, 3-yr: +1 bp to 1.83%, 5-yr: +1 bp to 1.86%, 10-yr: +1 bp to 2.08%, 30-yr: UNCH at 2.60%
- Oil – WTI futures was up US18c to US$56.24 a barrel on better GDP.
- Iron Ore – CommSec has iron ore up US$1.75 or 1.5% to US$118.75a tonne.
- LME metals Cu -0.40%, Ni +0.75%, Al +0.00%.
ECONOMIC DATA, NEWS & POLITICS
- US economic data – Advance Q2 GDP 2.1% (consensus 1.8%; prior 3.1%) and advance Q2 GDP Deflator 2.4% (consensus 1.8%; prior 1.1%)
- US dollar – Reports President Trump asked his cabinet for ideas to weaken the dollar but chose not to act at this time.
- French digital tax – Trump tweeted that “substantial reciprocal action” will be introduced to counter France’s decision to impose a digital tax on large US tech companies. Also tweeted that he asked US Trade Representative Lighthizer to stop the World Trade Organization from granting a special status to developing countries.
- Spanish politics – Prime Minister Pedro Sanchez failed to form a ruling coalition, increasing the likelihood of a general election being called.
- Brexit – British Prime Minister, Boris Johnson, spoke with European Commission President, Jean-Claude Juncker. Mr. Juncker said that the withdrawal agreement is not up for renegotiation while Mr. Johnson called attention to the fact that the current agreement was rejected by the British Parliament on three separate occasions.
- European data – German June Import Price Index -1.4% (expected -0.8%; last -0.1%) to be -2.0%yoy (expected -1.5%; last -0.2%); Italian July Business Confidence 100.1 (expected 100.6, previous 100.7) and Consumer Confidence 113.4 (expected 109.6, previous 109.8).