The ASX 200 is down 40 in early afternoon trade, despite +ve Chinese PMI, dragged down by Energy and Telcos. Nickle rally boosts materials. All else ↓. Ex-divs BEM, FMG, NHF +. IPL downgrade and TLS update on NBN. Big week ahead. #ausbiz
TODAY
- Economic data – Home prices, AIG Manufacturing Index, CommBank Australia Manufacturing PMI Final, Business Inventories, Company Gross Profits, ANZ Job Advertisements
- Ex-dividend – BetaShares Australian High Interest Cash ETF (AAA) 0.0c, Aust. United Investment (AUI) 19.0c, Bendigo Adelaide Bnk (BEN) 35.0c, Credit Intelligence (CI1) 0.1c, Duxton Water (D2O)2.7c, Diversified United Investment (DUI) 8.5c, Eumundi Group (EBG) 2.4c, Fortescue Metals (FMG) 24.0c, Integrated Research (IRI) 3.8c, Kip McGrath (LME) 2.5c, Mortgage Choice (MOC) 3.0c, NAOS Ex-50 Opportunities Company (NAC) 1.2c, NB Global Corporate Income Trust (NBI) 0.9c, NIB Holdings (NHF) 13.0c, NAOS Small Cap Opportunities Company (NSC) 0.5c, National Tyre & Wheel (NTD) 3.6c, Origin Energy (ORG) 15.0c, OZ Minerals (OZL) 8.0c, Qantas Airways (QAN) 13.0c, VGI Partners (VGI) 25.7c
- Chinese Caixin Manufacturing PMI
- Japanese – Jibun Bank Manufacturing PMI Final AUG
TONIGHT
- European data – Markit Manufacturing PMI Final
- UK – Markit/CIPS Manufacturing PMI
COMPANY NEWS
- Incitec Pivot (IPL) – Lowered guidance due to actual pricing and exchange rate. Now $3285-295m. Previous guidance (May 2019) was EBIT $370-$415m. Downgrade mainly due to lower than forecast ammonia production at Waggaman and lower Fertilisers earnings mainly as a result of continued drought impact in NSW and QLD and increased gas costs at Gibson Island. Also announced that it is commencing a strategic review of its Fertilisers Asia Pacific business segment.
- Telstra (TLS) – Updates FY20 guidance for NBN Co’s Corporate Plan 2020. Previous guidance dependant on NBN’s prevous corporate plan. Now updated, including a reduction in the total number of premises forecast to be connected during FY20 from 2 million to 1.5 million. TLS now updated its assumptions, including its FY20 cost reduction target from $660 million to $630 million. Telstra no longer anticipates FY20 being the year of peak nbn headwind and now estimates this will occur in FY21. Confirmed underlying EBITDA excluding in-year nbn headwind is expected to grow by up to $500 million in FY20.
THIS WEEK
- Tariffs – Increase on the first tranche to 15% will began on Sunday. $125bn (watches, TVs footwear). The remaining increase will be Dec 15, phones, computers, toys and clothing
- Trade talks – Trump has said talks to start Thursday
- Domestic – RBA meeting Tuesday (approx. 11% chance of a cut priced in), GDP on Wednesday the focus (0.5%/2.0% expected) after Company profits and business inventories. Also retail sales and trade data Thursday
- China – Official PMI numbers over the weekend, Caixin PMI on Monday/Wednesday,
- Global PMIs across the world
- US holiday on Monday for Labor Day…seen as the end of summer and return to work. Employment numbers Friday the focus (markets expecting just 155K new jobs after +164K last month and for the unemployment rate to remain at 3.7%), but also Fed Beige Book, ISM manufacturing index on Tuesday and factory orders on Thursday.
NEXT WEEK
OVERNIGHT
SPI FUTURES -5
US EQUITIES – S&P500 +2 (+0.06%), Dow Jones +41 (+0.16%), NASDAQ +30 (+0.38%)
Main themes
- Quiet trading ahead of long weekend.
- Oil prices eased and US dollar strengthened
- Large downward revision to consumer sentiment
EUROPEAN MARKETS – Mostly lower. STOXX600 -0.20%, UK FTSE +0.35% the exception, German DAX -0.25%, French CAC -0.34%.
CURRENCIES
- The USD is stronger at 98.83.
- The Aussie is lower at US67.34.
BONDS – 2-yr: -2 bps to 1.50%, 3-yr: -2 bps to 1.43%, 5-yr: -2 bps to 1.39%, 10-yr: -1 bp to 1.51%, 30-yr: -1 bp to 1.97%
COMMODITIES
- Oil – WTI futures were down US$1.61 or 2.8% to US$55.10 ahead of a hurricane near the Florida coast that could dampen demand. In other oil news, OPEC oil output rose 80,000 barrels per day in August, the first monthly increase this year.
- Gold futures fell 0.5% to US$1,529.40 an ounce.
- Iron Ore – CommSec has iron ore up US$4.40c or 5.4% to US$85.85 a tonne.
- LME metals – Mixed. Cu -0.95%, Ni +9.10%, Al +098%. Indonesian government official said it would ban ore exports from December, raising fears of shrinking supplies and deficits.
ECONOMIC DATA, NEWS & POLITICS
- US Economic data – Personal income 0.1% (consensus +0.4%), weaker than expected due to a 1.8% decline in personal interest income, personal spending +0.6% (consensus +0.5%). The PCE Price Index and core PCE Price Index both up 0.2% (as expected) to be +1.4%yoy (prev 1.3%) and core PCE Price Index +1.6% (unchanged). Both are running below the Fed’s 2.0% longer-run target. Chicago PMI 50.4 (consensus 48.2, last 44.4). Fina University of Michigan’s Index of Consumer Sentiment revised down to 89.8 (consensus 92.4, prelim 92.1, last 98.4). The difference in final readings between July and June was the largest point drop since December 2012. Tariffs are weighing more heavily on consumer sentiment)
- Chinese PMI numbers – Non manufacturing rose to better than expected levels, while the manufacturing PMI was disappointing. Typhoons, hot weather and storms were contributors.
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