Good morning, it's Monday and time to do it all over again. Thanks to @ttward, @Ravgnome & all the AM loungers.
A new week ahead, positive leads for us on Friday from the US markets, even if serious political issues continue to hang over our heads
The US markets (as well as their government still) are shut on Monday for Martin Luther King Jr. Day, so the potential for low volumes, as well as low conviction positions being taken with 2 days of trading here before the US gets underway.
In the coming week the monthly job figures (released Thursday) dominate the statistical schedule. The week kicks off on Monday when Commonwealth Bank releases its measure on economy-wide sales for December.
Overseas, Chinese economic growth and activity data are amongst the highlights in the coming week. In the US, the economic release schedule is subject to change – a victim of the government shutdown. A bevy of indicators were to be released in the coming week but are now delayed.
Read moreEasing US-China trade tensions have helped Australia's big miners, energy companies, and tech stocks soar as the local bourse closes the week at a new two-month high.
The benchmark S&P/ASX200 index was up 29.5 points, or 0.5 per cent, to 5,879.6 at 1615 AEDT on Friday, while the broader All Ordinaries was 31.4 points, or 0.53 per cent, higher at 5941.2.
The Aussie dollar is also up on news that US Treasury Secretary Steven Mnuchin has discussed lifting tariffs on Chinese imports, with the local currency buying 71.91 US cents from 71.58 US cents on Thursday.
CommSec markets analyst James Tao said the renewed positivity between China and the US was a welcome development after an extended period of volatility in 2018."It really might be a sign that both countries are looking to get a deal," he said.
"Which would be great, especially because there's been enough bad news of late."
The best performing Australian sector was again the tech stocks - up more than 1.5 per cent for the day - building on a recent surge in global investor confidence, as well as a stellar session for Afterpay Touch shares.
Mr Tao said soaring tech confidence was a general reflection of the current global sentiment.
"Tech stocks are growth stocks, so they thrive in scenarios of positivity or optimism," he said.
"Our tech sector is a drop in the ocean compared to the US, but it certainly had a good day."
Afterpay, the buy-now-pay-later vendor, soared more than 14 per cent after announcing a record rise in first half global underlying sales, closing 12.98 per cent higher at $16.10.
Language tech company Appen Ltd rose 4.98 per cent to $15.59, while Altium, Link Admin Computershare each lifted by between 0.89 and 1.95 per cent.
Online retailer Kogan.com.au was another big mover on Friday, gaining another 15.11 per cent to $4.57 after yesterday's bumper Christmas update.
Meanwhile, the opening of a year-long inquiry into the aged-care industry has triggered falls in the share prices of nursing-home operators as investors braced for tighter regulation and a possible sector shakeout.
Aveo Group fell 1.57 per cent to $1.57, Regis Healthcare dropped 2.14 per cent to $2.75, and Japara Healthcare lost 5.35 per cent to $1.15.
For the miners, Rio Tinto closed 0.31 per cent higher at $80.65 after announcing a two per cent rise in iron ore production and shipping for the quarter.
Fortescue Metals was up 1.76 per cent to $4.63, BHP rose 0.73 per cent to $33.11, while Bluescope Steel went even further with a 2.97 per cent gain to $12.47.
South32 dipped 1.16 per cent to $3.41.
Commonwealth Bank led the big four lenders with a 0.63 per cent rise to $73.23, with Macquarie Group also lifting, adding 0.87 per cent to $118.20.
Beach Energy was up 3.31 per cent to $1.715, New Hope Corporation rose 3.86 per cent to $3.77, Viva Energy rose 1.67 per cent to $1.83, and Whitehaven Coal was up 2.55 per cent to $4.83.
The ASX registered four straight days in the black to close the week 1.82 per cent higher.
ON THE ASX:
* The benchmark S&P/ASX200 index was up 29.5 points, or 0.5 per cent, to 5,879.6.
* The All Ordinaries was up 31.4 points, or 0.53 per cent, at 5,941.2
* At 1630 AEDT, the SPI200 futures index was up 33 points, or 0.57 per cent, at 5,821.0
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 71.91 US cents, from 71.58 on Thursday
* 78.67 Japanese yen, from 78.20
* 63.12 euro cents, from 63.19
* 55.40 British pence, from 55.41
* 106.33 NZ cents, from 106.30
GOLD:
The spot price of gold in Sydney at 1630 AEDT was $US1291.45 per fine ounce, from $US1293.44 on Thursday
U.S. stocks rallied on Friday, helping Wall Street’s major indexes advance for the fourth consecutive week, as increased hopes the United States and China would resolve their trade dispute lifted shares across sectors.
The market was boosted after a Bloomberg report said China sought to raise its annual goods imports from the United States by a combined value of more than $1 trillion in order to reduce its trade surplus to zero by 2024.
A strong rally in January has put the benchmark S&P 500 index on track for its best monthly gain since March 2016. The S&P 500 is now 8.9 percent below its Sept. 20 record close after dropping 19.8 percent below that level - near the 20-percent threshold commonly considered to confirm a bear market - on Christmas Eve.
The Dow Jones Industrial Average .DJI rose 336.25 points, or 1.38 percent, to 24,706.35, the S&P 500 .SPX gained 34.75 points, or 1.32 percent, to 2,670.71 and the Nasdaq Composite .IXIC added 72.77 points, or 1.03 percent, to 7,157.23. For the week, the Dow rose 2.96 percent, the S&P 500 gained 2.87 percent, and the Nasdaq added 2.66 percent. All three indexes registered their biggest four-week percentage gain since October 2011.Read more
Here's something cool from Reuters: 5 themes for the week ahead, read the full thing here.
1. SHOULD I STAY OR SHOULD I GO?
Another week closer to the date Britain leaves the European Union. Or are we? Given how crushingly Prime Minister Theresa May’s Brexit divorce deal was defeated by lawmakers, there is little chance her Plan B — to be presented in coming days — will get away with just minor amendments. So markets now reckon the March 29 deadline will be extended to give parliament more time to negotiate the manner of exit or even to organize a second referendum.
2. MOUNTAINS CAN’T TURN
Coming days will show whether China’s run of weak economic data continues as it releases fourth quarter growth numbers as well as investment and retail sales for December. But if anything, markets could be surprised on the upside after shockingly bad figures on exports and factory output. Growth is expected to print at 6.4 percent for the fourth quarter, the weakest since the global financial crisis. But that would be in line with rates Chinese policymakers may be targeting - sources tell us some have proposed lowering growth targets to between 6.0 and 6.5 percent.
3. DRAGHI-ING ON
ECB bond-buying is officially over but with economic data and inflation both continuing to underwhelm, the central bank has little time to relax. Policymakers have acknowledged the euro zone slowdown could last longer than anticipated but will be hoping nonetheless that upcoming data might bring some relief.
In particular, they will monitor the snapshot of business activity in the bloc in the shape of flash PMIs for January. They are out on Thursday, hours before the ECB meeting, and Reuters polls indicate some stabilization is likely after recent dire readings. Powerhouse Germany, which barely skirted recession in the latter part of 2018, releases its ZEW sentiment survey on Tuesday.
4. SHUTDOWN SLOWDOWN?
Last year at Davos, U.S. Treasury Secretary Steven Mnuchin sent the dollar plunging by saying a weak currency was good for the United States. This year though, with a government in shutdown, President Donald Trump has canceled Mnuchin’s Switzerland trip.
But the longer it continues, the worse it gets. Not only are 800,000 government workers going without pay, a delay to tax refunds for other citizens will hit companies reliant on consumer spending. The government has until early March before the debt ceiling kicks in. It could then also miss some social security payments. But the Democrat-controlled House shows no sign of agreeing Trump’s demands for $5.7 billion to fund a border wall. And a House vote to fund the government through Feb 28 was postponed to the coming week.
5. IT’S COLD OUT THERE...
Yes, it is that time of year again! Movers and shakers from politics, central banks, industry and finance descend onto the Swiss Alpine town of Davos... Japan’s Prime Minister Shinzo Abe and German Chancellor Angela Merkel will join Irish Taoiseach Leo Varadkar and South Africa’s Cyril Ramaphosa, among others. Of course no Davos would be complete without International Monetary Fund chief Christine Lagarde, while Britain’s Prince William will add a splash of royal glamor. And then there are the new(ish) kids on the block: Brazil’s far-right President Jair Bolsanero, Italy’s Giuseppe Conte and his Spanish counterpart Pedro Sanchez.
But more noteworthy may be the list of those who won’t come: U.S. President Donald Trump and his cabinet, Brexit-bound British Prime Minister Theresa May and French President Emmanuel Macron, who will stay at home to deal with the “yellow vest” protests.The United States is pushing for regular reviews of China’s progress on pledged trade reforms as a condition for a trade deal - and could again resort to tariffs if it deems Beijing has violated the agreement, according to sources briefed on negotiations to end the trade war between the two nations.
U.S. consumer sentiment tumbled in early January to its lowest level since President Donald Trump was elected more than two years ago as an ongoing partial shutdown of the federal government and financial market volatility stoked fears of a sharp deceleration in economic growth.
The drop in confidence reported by the University of Michigan on Friday is the clearest sign yet that the impasse in Washington over Trump’s demands for $5.7 billion to help build a wall on the United States’ border with Mexico was negatively impacting the economy. Trump has touted high consumer confidence as an indication of the good job he is doing on the economy.
While consumer sentiment remains relatively high, the gathering dark clouds over the economy could make households more cautious about spending, leading to slower growth. Consumer spending accounts for more than two-thirds of the U.S. economy.
Read moreGrowing fears RBA will have to cut rates to stop tumbling house prices.The Reserve Bank could be cutting interest rates within months amid new warnings house prices in Sydney and Melbourne could fall by more than 20 per cent and pull down the national economy. As Opposition Leader Bill Shorten said house prices across the country were already "crashing", analysts from Morgan Stanley and Capital Economics both said the risk of an interest rate cut by the Reserve Bank was growing because of the risk posed by tumbling property prices.
Read more
Afterpay has added 12 per cent to its already soaring share price thanks to record December sales, but the Australian-based company is also defending its risk to consumers ahead of an appearance at an inquiry into buy-now-pay-later vendors.
Read more
You want cash with that?ANZ plugs Apple Pay into eftpos. Millions of ANZ debit card holders will now be able to get cash out with over the counter Apple Pay transactions, after eftpos scored a massive win over the dominance of US credit card companies in smartphone payments.
Read more
The opening of a year-long inquiry into the aged-care industry has triggered falls in the share prices of nursing-home operators as investors braced for tighter regulation and a possible sector shakeout.Aveo Group fell nearly two per cent, Japara Healthcare Ltd slumped nearly three per cent, and Regis Healthcare Ltd was almost one percent weaker, underperforming the broader market which hit a two-month high.Read more
Kmart, Target, Myer:Performance of big name department stores in the spotlight. It’s been adored by customers and loved by shareholders but Kmart is one of a number of big-name retailers that are starting to look shaky.
Read more
WA farmers are threatening a lawsuit against the Federal Government if it does not abandon new rules they believe will kill the live export industry, as lobby groups demand an investigation of allegations animal activists conducted “industrial sabotage” by paying for vision of suffering animals.
Read more
How blockchain tracking technology could revolutionise Australia's food industry
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Digital-only banks are being rolled out in Australia putting pressure on bigger lenders. Digital-only banks are creeping into the banking space and giving customers more choice on who they do transactions with. Read more
The liquidator of fallen tech outfit Appster has revealed a number of "red flags" in the company's demise particularly the payment of hundreds of thousands of dollars from customers in the days leading up to its collapse. On the sidelines of a creditors meeting on Friday, liquidator Paul Vartelas said the speed of Appster's collapse was unusual and pointed to the plight of several customers who made payments just before the company went under.
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Vodafone is teaming up with IBM to offer businesses a way to link different cloud computing systems to support the next wave of digital advances, such as machine learning, on super-fast fifth-generation telecoms networks.Read more
Adani remains under investigation by the Queensland Government for alleged illegal works on its Carmichael mine site, despite federal authorities ruling out any wrongdoing. State officials have confirmed the ongoing probe into whether the company breached its environmental authority by sinking six dewatering bores last year.
Read more
The offshore safety regulator has decided not to review the versions of reports that damned electrical safety on the offshore facilities of Inpex’s Ichthys LNG project. Last week The West Australian revealed that independent audits of the Ichthys Explorer platform and nearby Ichthys Venturer oil production vessel found workers were at risk of a possible gas explosion ignited by faulty electrical work.
Read more
Aussie-founded tech giant Atlassian's second-quarter revenue has surged to cap a 'ripper' billion-dollar 2018, with its share price in the US rising nearly 10 per cent. The NASDAQ-listed collaboration software maker posted a quarterly revenue rise of 39 per cent, year-on-year, to $US299 million ($A415.5 million), eclipsing market expectations of $US288.3 million, and cementing the rich list status of Australian co-founders Mike Cannon Brookes and Scott Farquhar. Read more
African Gold closes oversubscribed IPO, drilling scheduled for February. The company plans to use the funds for its West African gold exploration as well as seeking out new prospective projects in the region.
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Woodside opts for cheaper North West Shelf gas train upgrades over replacement
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Nelson Resources applies for new exploration tenements in the Eastern Goldfields. New tenements to take Nelson’s landholding from 150 square kilometres to about 450 square kilometres.Read more
Energy company AGL has suspended sales of coal ash and ash by-products from its Bayswater and Liddell power stations in NSW due to elevated signs of heavy metals in the product.
Read more
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It's Mug-Optional Monday for those brazen enough.
