MID MORNING MARKETS 19-08-19

The ASX 200 is up 53 in mid morning trade after a Friday night rebound. IT & Energy ↑, while Gold, Materials and Telcos lag. Result BSL, NHF, SIQ, LLC and NWL. The week Is quiet on data and big on results. RBA and FOMC minutes highlight. #ausbiz

m1m2m3TODAY

  • Results – Altium (ALU), Bluescope Steel (BSL), GWA Group (GWA), nib Health Funds (NHF), Leandlease Group (LLC)
  • Ex-dividend – Credit Corp Group (CCP) 36.0c, Insurance Aust. Grp. (IAG) 20.0c
  • Japanese data – Balance of Trade, Imports/Exports

TONIGHT

  • European data – Current Account, Inflation Rate

COMPANY NEWS

  • WorleyParsons (WOR) – Has been awarded a project management consultancy (“PMC”) contract by Reliance Industries Limited (“Reliance”) for the MJ Field deep-water gas and condensate project.
  • Crown (CWN) – Settlement of Crown Sydney Sight Lines dispute
  • Westpac (WBC) – Q update
  • Austral (ASB) – Royal Australian Navy (RAN) has signed a two year lease extension with the National Australia Bank (NAB) for its two Cape Class Patrol Boats (CCPB), Cape Fourcroy and Cape Inscription. The lease extends the charter from the initial three year minimum term to five years. The vessels’ ongoing in-service support and sustainment is also being delivered by Austal.
  • Bluescope Steel (BSL) FY2019 NPAT $1,015.8 million, and underlying NPAT +17% to $966.3m. Underlying EBIT +6% $1,348.3. Third successive full year underlying EBIT above $1.1 billion. “Despite some softening in commodity steel spreads and domestic volumes in the second half, in FY2019 BlueScope delivered another very good result.” Outlook – Expects weaker commodity steel spreads in North Star and ASP, leading to an underlying EBIT around 45% lower than 2H FY2019 (which was $499 million). Expectations are subject to spread, FX and market conditions. Also announced a $700m expansion o North American key steelmaking mill.
  • GWA Group (GWA) – Normalised EBIT from continuing operations up 1.5% to $77.4m, Normalised NPAT from co +3.2% to $51.8m; Reported NPAT $95.0m from $54.3m pcp; FY 18.5 cents per share, fully franked, up 2.8%; Acquisition of Methven increases presence in renovation and replacement segment, taps & showers and select international markets; Caroma Smart Command® gaining market traction and was awarded the highest award (Best in Class) in product design, hardware and building at the Good Design Awards in July 2019.
  • nib Health Funds (NHF) – Underlying revenue $2.4 billion (+8.3%); Group claims expense1 $1.8 billion (+6.9%); Group underlying operating profit $201.8 million (+9.2%); Net profit after tax2 $149.3 million (+11.8%); Member first approach continues to drive Net Promoter Score (NPS)3 improvement to 32.5 (+3.8); Final dividend of 13.0 cents per share fully franked (+18.2%), POliciyholder growth of 2.1%. Outlook Prospects for further industry consolidation appear reasonable given a range of factors including an increased focus from APRA upon business sustainability risk. nib anticipates for FY20 a Group UOP (underlying operating profit) of at least $200m (statutory operating profit of at least $180m).
  • Lendlease Group (LLC)- Profit after Tax of $467m; Full year distributions 42c; Non core business (Engineering and Services) After tax loss of $337 and Sale process underway; Core business Profit after Tax of $804m,ROE 12.8%, Development pipeline approaching $100bn, FUM +17%; Strategic initiatives: Urbanisation̶ Secured three major urbanisation projects in Milan, Chicago and Sydney; c.$20bn project in the San Francisco Bay Area secured post balance date; Preferred on two projects in London and Birmingham valued at c.$17 billion: Capital partnerships: US residential investment partnership with US$1 billion equity commitment; New asset class for Investments platform following US$1 billion4 data centre partnership
  • Smartgroup (SIQ) – NPATA +5% to $40.5, on revenue +3% to $125.8m. INterm dividend of 21.5c (up 5%).

m1


LAST WEEK

m2m3m4


THIS WEEK

  • RBA meeting minutes
  • Japanese trade data and inflation
  • Europe – Inflation, Flash PMI numbers for August and Consumer Confidence
  • US – FOMC meeting minutes
  • Fed symposium at Jackson Hole starts Friday.

Results

  • Monday – Altium (ALU), Bluescope Steel (BSL), GWA Group (GWA), nib Health Funds (NHF), Leandlease Group (LLC),
  • Tuesday – BHP Group (BHP), SEEK Ltd (SEK), Estia Health (EHE), Oil Search (OSH), Senex Energy (SNX), Tassal Group (TGR), Sonic Healthcare (SHL), Charter Hall Group (CHC), Monadelphous Group (MND), Kogan (KGN), Seven West Media (SWM)
  • Wednesday – A2 Mil (A2M), Crown Resorts (CWN), Nearmap (NEA), Domino’s Pizza (DMP), Iluka (ILU), Emeco Holdings (EHL), Data#3 Ltd (DTL), McMillan Shakespeare (MMS), St Barbara (SBM), WorleyParsons (WOR), Wisetech Global (WTC), Stockland (SGP), Brambles (BXB)
  • Thursday – Growthpoint Properties (GOZ), South32 (S32), Coles Group (COL), Webjet (WEB), Downer EDI (DOW), Scentre Group (SCG), Coca-Cola Amatil (CCL), Southern Cross Media (SXL), Vocus Group (VOC), ERM Power (EPX), Flight Centre (FLT), Qantas (QAN), Qube Holdings (QUB), Santos (STO), Medibank Private (MPL), Zip CO (Z1P), Perpetual (PPT), Alumina (AWC), Origin Energy (ORG), Bingo (BIN)
  • Friday – BWX, Goodman Group (GMG), Ardent Leisure (AAD), IRESS Ltd (IRE), Conventry Group (CYG)

FRIDAY NIGHT MARKETS

m10m11

SPI FUTURES +41

US EQUITIES – S&P500 +41 (+1.44%), Dow Jones +307 (+1.20%), NASDAQ +129 (+1.67%)

Main themes

  • Stocks market advances more than 1%, buoyed by a buy-the-dip mindset
  • President Trump said he will have a call with President Xi soon; governments continued to signal stimulus efforts; an appreciation for the U.S. consumer

EUROPEAN MARKETS – All higher. STOXX600 +1.24%, UK FTSE +0.71%, German DAX +1.31%, French CAC +1.22%.

CURRENCIES

  • The USD is stronger at 98.21.
  • The Aussie dollar is a little higher higher at US67.83.

BONDS – 2-yr: -2 bps to 1.47%, 3-yr: -2 bps to 1.43%, 5-yr: -1 bp to 1.41%, 10-yr: +1 bp to 1.54%, 30-yr: +2 bps to 2.00%

COMMODITIES

  • Oil – WTI futures were up UD40c 0.7% to US$54.87. OPEC cut its global oil demand forecast in a downbeat outlook, and highlighted challenges in 2020 as rivals pump more.
  • Gold futures fell 0.50% to US$1,523.60.
  • Iron Ore – CommSec has iron ore up US75c or 0.8$ to US$89.55 a tonne.
  • LME metals – Stronger. Cu -0.29%, Ni +2.36%, Al -0.06%.

ECONOMIC DATA, NEWS & POLITICS

  • US Economic data – Housing starts -4.0% to 1.191m (consensus 1.245 million). Building permits +8.4% to 1.336m (consensus 1.260 million). Preliminary University of Michigan Consumer Sentiment 92.1 (consensus 97.7, prior 98.4). The August number was the lowest reading since January.
  • German economy – Reports the German government is ready for deficit spending in the event of a recession.
  • Trump/CEO meeting – Major CEOs (including bank CEOs) apparently told Trump that trade is the number one worry about the global economy and he told them that he likes tariffs.
  • Fed Speak – Minneapolis Fed President Neel Kashkari (FOMC voter in 2020) said that it’s much better to be “early and aggressive” in responding to slowdown than late. Cleveland Fed President Loretta Mester (FOMC voter in 2020) says she wouldn’t have cut rates in July; but sees economic risks to the downside and will be closely watching consumer data.
  • Fitch downgraded Argentina to “CCC” from “B”

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