The ASX 200 is up 29 points in mid-morning trade on +ve leads. Most sectors ↑ with Energy best and Gold and defensives lagging. A few results SIG, MYR, TPM, MFG FUM and BHP ex-div. Trade data ahead #ausbiz


  • Economic data – Balance of Trade, Imports/Exports
  • Ex-dividend – Air New Zealand (AIZ) 10.4c, Ariadne (ARA) 1.0c, ASX 243.4c, AVJennings (AVJ) 1.5c, BHP Group (BHP) 115.0c, Beacon Lighting Group (BLX) 2.0c, Class (CL1) 2.5c, Corporate Travel Management (CTD) 22.0c, Decmil Group (DCG) 2.0c, Engenco (EGN) 1.5c, FlexiGroup (FXL) 3.9c, GTN (GTN) 3.2c, Monash IVF Group (MVF) 3.0c, Midway (MNY) 9.0c, 1300 Smiles (ONT) 12.5c, Platinum Asia Investments (PAI) 2.0c, People Infrastructure (PPE) 4.5c, Ramsay Health Care (RHC) 91.5c, Resimac Group (RMC) 1.5c, SDI (SDI) 1.5c, Spheria Emerging Companies (SEC) 4.0c, Schaffer Corporation (SFC) 40.0c, Servcorp (SRV) 10.0c, Templeton Global (TGG) 5.0c, Think Childcare (TNK) 2.0c, Whitehaven Coal (WHC) 30.0c, Yancoal Australia (YAL) 10.4c


  • US economic data – ADP Employment Change, Unit Labour Costs QoQ Final, Markit Composite PMI Final, Markit Services PMI Final, ISM Non-Manufacturing PMI, Factory Orders


  • TPG Telecom (TPM) – Heavy impact from the Group’s decision to stop its Australian mobile network rollout in January 2019 – impairment expense of $236.8m and a significant increase in amortisation and interest expense relating to the Group’s Australian spectrum licences. Also includes $9.0m of one-off transaction costs relating to the Group’s planned merger with Vodafone Hutchison Australia (“VHA”). Excluding the impairment and merger transaction costs, the Group’s underlying EBITDA for the year was $818.4m, a 1% decrease on FY18. EBITDA before impairment -2.1% to of $809.4m; Revenue -0.7%; Outlook reflects headwinds of NBN customer migration. EBITDA expected to be in the range of $735-750m.
  • Sigma (SIG) – Wins the worst results spin award for the day. Reported EBITDA of $25.3 million for 1H20, down 19.8% on 1H19, reflecting the net impact of one-off restructuring costs, offset by a favourable litigation settlement and changes to the lease accounting standard. Underlying EBITDA of $31.9 million was down 21.7%. A slight timing delay is likely to see Underlying EBITDA for FY20 at the low end of the $55-60 million previous guidance, with FY21 remaining in line with previous expectations with growth of at least 10%.
  • Magellan (MFG) – Net inflows of $315 million, which included net retail inflows of $162 million and net institutional inflows of $153 million.
  • Myer (MYR) – NPAT +2.2% to $33.2; Total sales -3.5% to $2,991.8m; Comparable store sales down 1.3% excluding sales in Apple products (exited May 2019); Online sales +25.6% to $262.3 million. Digital sales up 21.9% to $292.1 million, now representing our largest store and 9.8% of total sales; Operating Gross Profit margin increased by 65 basis points to 38.85%; Cost of Doing Business improved 3.1% to $1,002.4 million; Operating cash flow (before interest & tax) increased by $8 million to $138 million with total net debt reduced by $69 million; comfortably within financial covenant. “We anticipate the challenging macro environment and subdued consumer sentiment to continue during FY2020





US EQUITIES – S&P500 +32 (+1.08%), Dow Jones +237 (+0.91%), NASDAQ +103 (+1.30%)

Main themes

  • Stronger Chinese services PMI
  • Risk reduction – Hong Kong withdrew the contentious extradition bill at the heart of recent protests.
  • UK parliamentary voted against a no deal Brexit, with PM Johnson call for an election for October 15. Increases chances of another delay to Brexit. Led to US$ weakness.

EUROPEAN MARKETS – All higher. STOXX600 +0.89%, UK FTSE +0.59%, German DAX +0.96%, French CAC +1.21%.


  • The USD is lower at 98.66.
  • The Aussie is stronger at US67.95.

BONDS – Yield curve back to positive slope in the 2-10year.  2-yr: -2 bps to 1.45%, 3-yr: -3 bps to 1.35%, 5-yr: -2 bps to 1.32%, 10-yr: UNCH at 1.47%, 30-yr: +1 bp to 1.96%


  • Oil – WTI futures were up 4.3% to US$56.26 on stronger Chinese data.
  • Gold futures rose US$4.40 to US$1,560.40 an ounce.
  • Iron Ore – CommSec has iron ore up US$1.70c US$91.05 a tonne.
  • LME metals – All stronger. Cu +2.83%, Ni +1.01%, Al +1.03%.


  • Chinese services sector – expansion at its fastest pace in 3 years. Builds on the positive manufacturing number on Monday.


  • Fed Speak – New York Federal Reserve President John Williams said the Fed will act as appropriate to sustain the current economic expansion. He added that low inflation is “is indeed the problem of this era” and that it is “a reflection of the broader economic picture.”
  • Fed’s September Beige Book described overall economic activity as expanding at a modest pace. The majority of surveyed businesses remained optimistic about the near-term outlook, though concerns about tariffs and trade policy remained in place. There was little overall change in tourism trends while transportation activity softened. Agricultural conditions remained weak due to unfavorable weather. Employment and prices grew at a modest pace.
  • Brexit – A cross-party alliance of rebel lawmakers has defeated British Prime Minister Boris Johnson in parliament on Tuesday, moving to prevent the UK leaving the European Union without a formal agreement on October 31. He will call a new election.
  • China’s Ministry of Finance and Ministry of Agriculture will incentivise pork producers to ramp up production due to rising food prices, resulting from low supply.
  • Australian economic data yesterday – Q2 GDP increased 0.5% qtr/qtr, as expected (last 0.5%), growing 1.4% yr/yr, as expected (last 1.8%). Q2 GDP Capital Expenditure fell 1.7% qtr/qtr (last -0.7%), Q2 Chain Price Index increased 1.2% qtr/qtr (last 1.3%), and Q2 GDP Final Consumption increased 1.0% qtr/qtr (last 0.4%). August Services PMI decreased to 49.1 (expected 49.2) from 52.3 while August AIG Services Index rose to 51.4 from 43.9.
  • European economic data – July Retail Sales -0.6% (as expected, last 1.2%) but +2.2%yoy (expected 2.0%; last 2.8%). August Services PMI 53.5 (expected 53.4, last 53.4). German August Services PMI 54.8 (expected 54.4, last 54.4). UK August Services PMI 50.6 (expected 51.0, last 51.4); French August Services PMI 53.4 (expected 53.3, last 53.3); Italian August Services PMI 50.6 (expected 51.6, last 51.7); Spanish August Services PMI 54.3 (expected 53.0, last 52.9)/


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