Good morning traders, happy Friday. Thanks @ttward, @Ravgnome & the aftermarket loungers. Has been good to see a few runners pop up, even some fun to be had at the pointy end of the market, as companies exceed or fall short of earnings expectations.

ASX Market Report

Australian shares have rebounded from a choppy morning to close higher on the backs of the big banks and discretionary consumer stocks.

 

The benchmark S&P/ASX200 index finished up 42.7 points, or 0.7 per cent, at 6,139.2 points at 1615 AEDT on Thursday, while the broader All Ordinaries was up 38.8 points, or 0.63 per cent, at 6,214.6.

 

"It's been a bit of a softer start, but really a pick up in the afternoon, led by the banks," said CommSec market analyst James Tao.

 

"Generally, today's market is really doing quite well. It's really been lifting even though there's been plenty of reasons not to."

 

The big four banks were all up, led by Commonwealth at 2.01 per cent. ANZ was up 1.83 per cent, Westpac up 1.32 per cent, and NAB up 0.69 per cent.

 

Strong earnings results from Wesfarmers, Star Entertainment Group and Webjet also pushed the consumer discretionary sector up 3.91 per cent.

 

Wesfarmers shot up 6.88 per cent after it said it would give $1 billion of the $3 billion it raised from its Coles demerger back to sharesholders in a special dividend.

 

Star closed up 5.68 per cent after the casino operator raised its interim dividend from 7.5 to 10.5 cents and said tis revenue was up 0.9 per cent, to $1.11 billion.

 

And Webjet shares soared 30.61 per cent after the online travel company reported first-half profit rose by more than a third.

 

Competitor Flight Centre was up 2.88 per cent after announcing a special dividend despite first-half profit falling 17 per cent.

 

Mineral Resources was down 5.18 per cent after it reported its normalised profits had dropped 63 per cent, to $34 million. It cut its interim dividend from 25 cents to 13 cents.

 

Origin Energy was up 0.92 per cent after reporting a 52.6 per cent rise in its first-half underlying profit while Santos rose 0.43 per cent after the gas producer reported its full-year underlying profit had more than doubled.

 

Qantas rose 1.94 per cent after first-half profit fell 16.3 per cent to $498 million on higher fuel costs.

 

Nine Entertainment was up 7.17 per cent after reporting a $140.2 million first-half profit and saying it copped $43 million in costs related to its merger with Fairfax.

Mortgage Choice was up 8.51 per cent despite slashing its interim dividend and reporting a 44 per cent fall in first-half profit.

 

On the currency market, the Aussie had a whipsaw day, jumping almost half a cent to 72.07 US cents on strong monthly labour report before falling back to 71.55 US cents after Westpac predicted interest rates would be cut in both August and November.

 

Then it fell more after customs at China's northern Dalian port banned imports of Australian coal.

 

Late on Thursday afternoon the Aussie was down more than a full percentage point on the day, buying 70.90 US cents, from 71.64 US cents on Wednesday.

 

ON THE ASX:

* The benchmark S&P/ASX200 index was up 42.7 points, or 0.7 per cent, at 6,139.2 points at 1630 AEDT on Thursday.

* The All Ordinaries was up 38.8 points, or 0.63 per cent, at 6,214.6.

* At 1630 AEDT, the SPI200 futures index was down 6 points, or 0.1 per cent, at 6095.

 

CURRENCY SNAPSHOT AT 1730 AEDT:

One Australian dollar buys:

* 70.90 US cents, from 71.64 US on Tuesday

* 78.51 Japanese yen, from 79.38

* 62.58 euro cents, from 63.15

* 54.41 British pence, from 54.84

* 104.10 NZ cents, from 104.26

 

GOLD:

The spot price of gold in Sydney at 1630 AEDT was $US1338.87 per fine ounce, from $US1338.24 on Tuesday.

In Asia

Asian trading had been far more eventful though. MSCI’s main Asia-Pacific index rose to a 4-1/2 month high after sources told Reuters U.S. and Chinese negotiators were drawing up six “memorandums of understanding” to solve their trade feud.

 

They include forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, the sources said, adding the sides were pushing for an agreement by March 1, the deadline after which U.S. tariffs on Chinese imports will ratchet up.

 

The big mover though was the Aussie dollar. It slumped more than 1 percent after one of the country’s big banks, Westpac, called for two RBA rate cuts this year and Reuters reported that the Chinese port of Dalian had banned imports of Australian coal. Coal is Australia’s biggest export earner.

 

“It is hard know how much of this is in the price considering the fall we saw from the Aussie dollar last year,” said State Street’s EMEA Head of Macro Strategy, Tim Graf.

 

It is still up this year, however, which means “there is totally scope for further downside”. The Aussie was last trading at $0.7105, down 0.8 percent on the day but it was not the only one struggling. The Kiwi dollar got bundled down 0.5 percent and the euro had given back its early gains to stand at $1.1320.

 

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In Europe

European shares dipped on Thursday, weighed down by several weak earnings updates and after data showed that euro zone factory output unexpectedly fell last month.

 

The pan-European STOXX 600 index ended the day down 0.3 percent, while Germany’s DAX was up 0.2 percent and France’s CAC 40 held flat.

 

Euro zone factory output slammed into reverse last month as activity in Germany declined again amid trade tensions and struggles in the auto sector, surveys showed.

 

“There is still widespread concern about how well the economy in Europe has been performing in recent months,” said Michael Hewson, chief market analyst at CMC Markets.

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In the United States

U.S. stocks edged lower on Thursday after a recent run of gains, pressured by weak economic data and a drop in healthcare shares, while investors kept a close watch on U.S.-China trade talks.

 

The Commerce Department said new orders for key U.S.-made capital goods unexpectedly fell in December, pointing to a further slowdown in business spending on equipment that could crimp economic growth.

 

Another set showed the Philadelphia Federal Reserve’s gauge on U.S. Mid-Atlantic business activity declined in February to its weakest level since May 2016.

 

“There are some concerning bits of data but the reaction is not terribly irrational because we’re up quite a bit for the year now,” said Kevin Divney, senior portfolio manager at Russell Investments in New York City.

 

The soft data threatened to snap the S&P 500’s three-day gain, which was driven by signs of progress in trade talks. Despite the dip, the index continues to hover near two-month highs.

 

The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, sources told Reuters on Thursday.

 

The two sides were trying to reach agreement before March 1, Reuters reported.

“Markets seem to almost be willing to bypass the weak data that we’ve seen for the optimism over a resolution on trade,” said Ryan Detrick, senior market strategist, LPL Financial.

 

At 12:34 p.m. ET the Dow Jones Industrial Average was down 63.59 points, or 0.25 percent, at 25,890.85, the S&P 500 was down 5.60 points, or 0.20 percent, at 2,779.10 and the Nasdaq Composite was down 10.27 points, or 0.14 percent, at 7,478.80.

 

The S&P index recorded 29 new 52-week highs and no new lows, while the Nasdaq recorded 49 new highs and nine new lows.

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Upcoming Earnings Reports

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Via Earnings Whispers

 

Australian News

Australia's jobless rate remained steady at a seasonally adjusted 5.0 per cent in January, but a jump in full-time employment could reassure the Reserve Bank there is positive underlying momentum in the economy. 
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Prime Minister Scott Morrison has been delivered an important economic boost with new figures showing 64,000 full time jobs created across the country in January. The Australian Bureau of Statistics on Thursday reported the national unemployment rate was steady in January at 5 per cent. 
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WA unemployment rate jumps but Treasurer says job market on the right track 
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‘It is worse than being back to square one’: Westpac hit with class action over irresponsible lending. Michelle and Ian Tate were on a single income when Westpac lent them more than $1.8m. Now they’re about to lose it all — and they’re suing the bank. 
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One of Australia’s biggest banks has slashed its expectations for economic growth and now predicts two cuts to official interest rates this year. Westpac has changed its interest rate forecast and now tips the Reserve Bank to deliver a 0.25 percentage point reduction to official interest rates in both August and November. 
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Mortgage Choice, AFG rally amid reports of ALP broker pay backdown. Investors are betting the outlook for the embattled mortgage broker sector may not be quite as grim as feared following the royal commission, after Labor vowed not to introduce policies that would "see the end" of the industry. 
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Customs at China's northern Dalian port has banned imports of Australian coal and will cap overall coal imports for 2019 through its harbours at 12 million tonnes, an official at Dalian Port Group has told Reuters. 
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Australia's largest coal miner Glencore's decision to cap its global coal production has been dismissed by local miners as a public relations exercise dressed up as climate change action. On Wednesday night, Glencore announced that while it will continue mining thermal coal for power stations and coking coal to make steel it will now limit global production to about 145 million tonnes a year. 
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School of Mines jobs set to go as students turn their back on mining industry 
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Australian retailers are currently going under at the rate of about one a month, making everyone in the industry nervous. Over the last couple of years about two dozen chains have collapsed, with the makeup empire of Napoleon Perdis the latest in an increasingly long line of failures. 
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Global News

Stocks are on fire in 2019, but the IPO market is still in hibernation mode because of a chill caused by the government shutdown and market mayhem. Just seven IPOs have come to market so far this year, a 71% plunge from the same period in 2018, according to market intelligence firm IHS Markit. 
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The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to sources familiar with the negotiations. 
Read more

 

The city of Philadelphia has filed an antitrust lawsuit accusing seven major banks of conspiring to inflate interest rates for a type of bond used by cities, towns and other public entities, costing them potentially billions of dollars. 
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Johnson & Johnson in US probe over baby powder claims 
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Not there yet but closer: Britain and EU haggling over Brexit compromise. Britain and the European Union on Thursday played down the chances clinching an immediate Brexit divorce deal but diplomats said they were moving closer to a legal compromise that Prime Minister Theresa May hopes will win over the British parliament. 
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Huawei will present a plan to address British security concerns about its equipment by the end of the first half of this year, a senior company executive said on Thursday, following criticism the Chinese firm has not moved fast enough to fix the issues. 
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For Sainsbury and Asda, watchdog's analysis leaves merger in serious doubt. Sainsbury’s planned 7.3 billion pound ($9.5 billion) takeover of Walmart’s Asda can only be salvaged if Britain’s competition regulator fundamentally changes its analysis of Britain’s grocery market, experts said on Thursday. 
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Germany said Wednesday it would hold firm on its decision to halt weapons exports to Saudi Arabia, shrugging off British warnings that the embargo could hurt European credibility and efforts to bring peace in Yemen. "The stance of the government is that we won't deliver weapons to Saudi Arabia at the moment," Foreign Minister Heiko Maas said after talks with his British counterpart about the decision taken in October over the murder of dissident journalist Jamal Khashoggi. 
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Sweden’s and Estonia’s financial watchdogs have opened a joint investigation following a media report linking Swedbank to a Baltic money laundering scandal involving Danske Bank, they said on Thursday. Swedbank said separately it had launched an external review, after some of its top investors urged it to ensure the allegations were independently examined. 
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Russian investigators have charged US investor Michael Calvey with large-scale fraud, in a case that has further strained ties between the two nations. Mr Calvey, the founder of the Baring Vostok investment fund, is suspected of embezzling 2.5bn roubles ($38m; £29m) from a Russian bank. 
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Samsung unveiled a 5G phone but the network has a long way to go 
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Stock News

Flight Centre will hand $211 million back to shareholders through a special dividend despite reporting a 17 per cent dip in first-half profit. Net profit of $85 million in the six months to December fell on the previous corresponding period, following a tumultuous two years at the travel centre. 
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Webjet shares soar as hotel business shines. John Guscic's online travel agency may be called Webjet, but for the first time, its booking arm WebBeds generated more than half of its earnings. 
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Coca-Cola Amatil's first-half profit has slipped 37 per cent after a year of challenges at home and abroad, and a $146.9 million writedown of fruit and vegetable canning business SPC. 
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A big increase in bad debt charges has overshadowed further sharp loan growth at Cash Converters, which has been dragged back into the red by its latest class action settlement. The lender and pawn chain’s half-year results today show that profit from its core lending business slumped 23 per cent in the six months to December 31 as bad debt charges more than doubled to $23 million. 
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Shares in entertainment giant Nine have surged after it posted a $140.2 million first-half post-merger profit and said streaming service Stan would soon be making money. The company copped $43 million in costs related to December's merger with Fairfax Media, but its pro forma net profit rose one per cent, helped by a $93 million increase in Stan's carrying value and the sale of the NBN station in Newcastle. 
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More people are tuning in to Southern Cross Austero's podcasts and radio shows, but the media network slumped to a first-half loss on a $227 million writedown against its regional television assets. The Triple M and 2DayFM owner recorded a net loss of $120 million for the six months to December 31, down from a $38 million profit a year ago. 
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Australian casino giant Star Entertainment Group has experienced a sharp pullback in spending by wealthy foreign high-rollers, as China's economic slowdown and simmering trade tensions with the United States heighten caution among top-end punters. Star declared an interim dividend if 10.5¢, fully franked, up 40 per cent from the previous year. 
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Hope none of ya get caught out by Cyclone Oma, take care over the weekend if you are in its path.