Good morning traders. Thanks to @ttward, @Ravgnome & the Aftermarket loungers.

 

Trump SOU appears to have come and gone without too much drama. I tuned in for a minute back tuned out a minute later, I must be getting a bit jaded when it comes to politics right now... That or it's a bit of a madhouse right now.

 

ASX Market Report

 

Australian shares have finished higher for a third straight day, while the Australian dollar has hit the skids after the Reserve Bank opened the door to a possible rate cut.

 

The benchmark S&P/ASX200 index closed up 20.2 points, or 0.34 per cent, at 6,026.1 points at 1615 AEDT on Wednesday, while the broader All Ordinaries was up 23.7 points, or 0.39 per cent, at 6,091.8.

 

The Australian dollar dropped more than 1.1 per cent, meanwhile, after Reserve Bank Governor Philip Lowe said it was possible Australia's cash rate might be cut further.

 

Lowe indicated a rate cut was just as likely as a rate hike, with a cut warranted if the economy softens, a shift from its longstanding bias towards tightening.

 

The Aussie hit a one-week low on the news, buying 71.54 US cents, down from 72.35 cents on Tuesday.

 

When it come to equities, the ASX200 held steady above 6,000 despite weakness in the financial sector as investors took profits following Tuesday's strong gains.

 

The big banks were down between 1.24 and 1.68 per cent, with ANZ the worst hit. The stock is still up 5.9 per cent on the week, however.

 

It was a better day for most other sectors, with the technology sector and industrials up over 2 per cent.

 

Transportation stocks also did well, with Sydney Airport up 4.26 per cent, Qantas up 4.07 per cent and Virgin Australia up 2.7 per cent.

 

IAG shares jumped 4.25 per cent, to $7.61, even after the insurance company said it was cutting dividends following a freak hail storm.

 

Petrol company Viva Energy stock enjoyed its best-ever daily performance, closing 13.77 per cent higher, at $2.19, after it announced a new 10-year partnership with Coles involving the running of Coles Express stores.

 

Nick Scali recorded its best day in two years after it announced its interim dividend would be lifted to a fully-franked 25 cents per share, from 14 cents a year ago. The furniture retailer's shares closed at $5.55, up 39 cents or 7.56 per cent.

 

Genworth Mortgage Insurance shares jumped 3.98 per cent even as the company announced a subdued housing market had pushed net profit down.

 

BHP gained 1.67 per cent and Rio Tinto was up 1.93 per cent.

 

"It's all looking hunky dory at the moment," said Chris Weston, chief market strategist at Pepperstone in Melbourne.

 

The gains of the past month and a half had come from less restrictive monetary policies in Asia, but it's unclear whether there's the strength to continue, Mr Weston said.

 

"People are seeing economic vulnerabilities in Australia, there's no doubt," he said. "We are quite concerned where the Australian economy sits in 12 months time, or 24 months time."

 

ON THE ASX:

* The benchmark S&P/ASX200 index up 20.2 points, or 0.34 per cent, at 6,026.1 points at 1615 AEDT on Tuesday.

* The All Ordinaries was up 23.7 points, or 0.39 per cent, at 6,091.8.

* At 1630 AEDT, the SPI200 futures index was up 11 points, or 0.18 per cent, at 5,981.0.

 

CURRENCY SNAPSHOT AT 1630 AEDT:

One Australian dollar buys:

* 71.55 US cents, from 72.35 US on Monday

* 78.53 Japanese yen, from 79.56

* 62.75 euro cents, from 63.44

* 55.22 British pence, from 55.86

* 104.17 NZ cents, from 104.96

 

GOLD:

The spot price of gold in Sydney at 1630 AEDT was $US1313.67 per fine ounce, from $US1315.06 on Monday.

 

In Asia

 

In Asian Equity Markets the Nikkei 225 gained 0.24 percent while the Topix index added 0.1 percent. Australian shares retraced early losses as the country’s benchmark ASX 200 rose 0.41 percent. Shares of ANZ were down 1.6 percent, Commonwealth Bank lost 1.07 percent, Westpac shed 1.24 percent and the National Australia Bank fell 1.04 percent.

 

On Tuesday, banking stocks had gained after a special government-appointed inquiry into Australia’s financial sector did not recommend breaking up any of the banks or interfering in the way they lend money.

 

In Currency Marketsthe Australian dollar fell on Wednesday after the country’s central bank opened the door to a possible rate cut as it acknowledged growing economic risks, while the U.S. dollar held steady against a basket of major currencies. In a shift from the Reserve Bank of Australia’s long-standing tightening bias, Governor Philip Lowe said rates could move in either direction, depending on the strength of the labor market and inflation. The Aussie was 1.48 percent lower at $0.713, on pace for its worst one-day decline in a year.

 

The Australian dollar nosedived on Wednesday after its central bank opened the door to a possible rate cut, in yet another indication the global economic slowdown is persuading policymakers to go easy on rate hikes.

Australia’s central bank is only the latest to signal policy easing in the face of economic headwinds — the U.S. Federal Reserve has all but abandoned plans for further rate hikes, while the European Central Bank also sounded less certain that it will start tightening policy later this year.

 

The U-turn pushed the Australian dollar 1.5 percent lower, putting it on track for its biggest daily drop in a year. Australian short-dated bond yields were set for their biggest one-day drop in more than two years, down 10 basis points on the day.

Read more

 
Via Reuters

In Europe

 

European shares inched up to touch 12-week highs on Wednesday, fueled by strong gains in Italian banks and tech stocks, while Ubisoft sank following a revenue warning from U.S. videogame maker Electronic Arts.

 

Europe’s STOXX 600 managed a 0.2 percent gain by the close, having oscillated in and out of negative territory during the day.

 

The regional benchmark hid wide variations at country level: Germany’s trade-sensitive DAX was down 0.4 percent and France’s CAC 40 fell 0.1 percent while Italy’s FTSE MIB jumped 0.8 percent.

 

Bank stocks, which began the day as a drag on the market, reversed course to rise thanks to a rally in Italian lenders after a new 30-year Italian bond drew record demand, a positive sign for government bonds.

 

Data on Wednesday showed that German industrial orders fell unexpectedly on weak foreign demand in December, another sign that companies in Europe’s largest economy are struggling with a slowing world economy and trade disputes.

 

A standout faller was French gaming firm Ubisoft, which sank 9.5 percent after U.S. videogame maker Electronic Arts cut its revenue outlook due to its newest “Battlefield” title selling about a million fewer units than expected.

 

Tech stocks hit a 3-month high thanks to strong results from French software company Dassault Systemes, which shot up 10.1 percent after fourth-quarter revenue topped guidance.

Read more

 

In the United States

 

The three main U.S. indexes retreated slightly on Wednesday from two-month highs, as videogame makers reported disappointing revenue forecasts, while investors waited for more clarity on U.S.-China trade developments.

 

Electronic Arts Inc and Take-Two Interactive Software Inc tumbled more than 13 percent, leading the communication services sector down 1.43 percent, the most among the nine major sectors in the red.

 

The technology sector, up 0.20 percent, was boosted by chipmakers with the Philadelphia chip index rising 2.87 percent.

 

The possibility of the S&P 500 extending its winning streak for the sixth straight day was under pressure.

 

“It’s been a mixed bag of earnings reports and concerns still loom, it’s uncertainty that causes these pauses in the markets,” said Brian Yacktman, chief investment officer at YCG Enhanced Fund in Austin, Texas.

 

“The uncertainty of the ongoing trade negotiations with China has been looming over the markets and once there is certainty on the outcome, there is no question that markets will breathe a sigh of relief.”

 

U.S. Treasury Secretary Steven Mnuchin said trade talks with China last week were “very productive” and confirmed that he and other officials will travel to Beijing for the next round of meetings, as the world’s biggest economies aim to clinch a deal to avert a March 2 increase in U.S. tariffs on Chinese goods.

 

At 12:56 p.m. ET the Dow Jones Industrial Average was down 12.02 points, or 0.05 percent, at 25,399.50, the S&P 500 was down 6.13 points, or 0.22 percent, at 2,731.57 and the Nasdaq Composite was down 27.05 points, or 0.37 percent, at 7,375.04.

 

On Tuesday, President Donald Trump offered no specific economic policy initiatives in his State of the Union address and reiterated his vow to build a wall along the U.S.-Mexico border.

 

Also expected on Wednesday is Fed Chairman Jerome Powell’s address at 7:00 p.m. ET (0000 GMT) in Virginia.

Read more

 

Earnings Reports

 

Via Comsec

Via Earnings Whispers

 

Australian News

 

The Reserve Bank of Australia could slice interest rates to their lowest level since the 1950s just days out from the federal election over fears the economy is slowing. In a move that saw the Australian dollar fall and forced financial markets to price-in an interest rate cut by the middle of next year, RBA governor Philip Lowe used a major address to concede cash-strapped consumers and a slowing property market posed risks to the economy. 
Read more

 

Recession-free era could turn into something quite unpleasant. Philip Lowe’s address to the National Press Club underscores how finely-balanced our current economic circumstances appear to be. So finely-balanced, in fact, that the Reserve Bank governor assesses the probabilities of either an increase or decrease in the cash rate as evenly balanced. 
Read more

 

'It’s starting to bite now': builders worry about slowdown. Buyer defaults, falling housing starts and sliding prices are just some of the signs of weakness in the nation’s property market that may prompt the Reserve Bank of Australia to lower interest rates. 
Read more

 

A freak hailstorm and increased regulatory costs have put a $50 million dent in Insurance Australia Group's (IAG's) earnings with the company cutting its interim dividend after announcing a 9.3 per cent half-year profit drop to $500 million. But an improved underlying result in the six months to December 31 helped lift the company's share price 4.25 per cent on Wednesday. Its stock closed at $7.61, up 31 cents and its highest level since September. 
Read more

 

Royal Commission demands central enforcement database for ASIC, APRA. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry banking has recommended key regulators the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC) establish a new common database to better catch malfeasance in the sector. 
Read more

 

Hayne ends the executive remuneration debate. There’s a recommendation on executive remuneration in the final report of the financial services royal commission that institutional shareholders probably aren’t going to be happy to see being put on the reform agenda. 
Read more

Iron ore prices could be heading back to $US100 a tonne, in the short term at least, according to the Commonwealth Bank. 
Read more

 

Global News

 

Commonwealth Bank’s first-half cash profit has fallen 2.1 per cent to $4.676 billion, weighed down by Australia’s slowing property markets. Australia’s biggest bank said on Wednesday that cash profit for the six months to December 31 fell from $4.871 billion in the prior corresponding period after revenue fell 1.9 per cent to $12.41 billion. 
Read more

 

The former chief of staff of embattled National Australian Bank boss Andrew Thorburn allegedly rorted more than $500,000 from the NAB to fund an extravagant overseas family holiday that included first class travel and luxury resorts. 
Read more

 

CBA boss says heads will roll over financial planning scandal, but it won't be his. Matt Comyn has failed in his first big test to show that the Commonwealth Bank is cleaning up its act, in what he says is an "unacceptable failure" on the part of some bank staff. 
Read more

 

Neometals Ltd (ASX:NMT) has timed the divestment of its 13.8% ownership in the Mt Marion Lithium Project well as product prices have taken a tumble. The sale price for 6% spodumene concentrate shipments for the March 2019 quarter will be $US791.84 per dry metric tonne (dmt), compared with US$930.80/dmt for the prior quarter. 
Read more

 

Ironbark Zinc's EM survey identifies broad strong bedrock anomalism at Captains Flat 
Read more

 

Cauldron Energy focused on ‘developing a clear path forward’ in energy metals. Cauldron Energy Ltd (ASX:CXU) is reinvigorating its focus of building a successful energy metalsdevelopment company incorporating project acquisitions with enhanced attention on uranium, battery metals and other energy metals commodities. 
Read more

 

Premier Mark McGowan’s doubts over funding to keep Carnegie Clean Energy’s Albany wave project afloat. Swirling doubts over the ability of Carnegie Clean Energy to deliver a marquee wave power project in Albany have intensified after the Premier described the company’s predicament as “very concerning”. 
Read more

 

Coles has signed a new deal with petrol partner Viva Energy after predicting earnings from its convenience store division to plunge this year more than 60 per cent. 
Read more

 

Leaf Resources Limited (ASX:LER) has received positive progress on its latest integrated demonstration study (IDS) in Delft, The Netherlands from the month of January. The company partnered with Bioprocess Pilot Facility (BPF) to undertake a series of integrated demonstration studies that incorporated the necessary engineering and hardware components in the pilot-scale testing. 
Read more

 

Stock News

 

US President Donald Trump has vowed to end what he described as China's "theft" of American jobs. Giving his second State of the Union address, Mr Trump told the US Congress a trade deal with China would require "structural changes to end unfair trade practices". 
Read more

 

Shares of Snap Inc rose 26 percent on Wednesday, after the maker of Snapchat messaging app arrested a fall in users on Apple devices and drew a series of favorable reviews from analysts for its progress with a new Android app. 
Read more

 

Disney's earnings fell sharply compared to its first quarter a year ago, but it still beat Wall Street's expectations. The company's theme parks and TV networks led the way with growth in the first quarter while the film unit's revenue took a 27% hit, falling to $1.8 billion. 
Read more

 

Tesla cuts Model 3 price for second time this year 
Read more

 

General Motors Co on Wednesday swung to a quarterly profit thanks to high-margin pickup trucks and crossovers in the U.S. market plus cost cutting and maintained its full-year 2019 earnings forecast, lifting its shares 1.7 percent. 
Read more

 

UBS has received approval from a London court to move up to 32 billion euros ($36.44 billion) in assets from Britain to Germany as part of plans to keep business in the European Union after Brexit. UBS, Switzerland’s biggest bank, received approval from Judge Alastair Norris on Tuesday to transfer operations from UBS Limited, its London-based subsidiary primarily handling investment banking activities, to Frankfurt-domiciled UBS Europe SE on March 1. 
Read more

 

European Council President Donald Tusk took a swipe at some Brexit-backers in Britain, wondering aloud what "special place in hell" might be reserved for those who had no idea how to deliver the country's exit from the European Union. With less than two months to go until Britain is due to leave the EU and concern mounting about a potentially chaotic departure, Tusk, who chairs meetings of EU leaders, also appeared to dash any British hopes that the bloc would reopen discussions over the Brexit deal that was overwhelmingly rejected by UK lawmakers last month. 
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A $2 billion (1.54 billion pounds) effort by China’s Huawei to address security issues raised in a British government report last year will take between three and five years to produce results, according to a company letter to British lawmakers seen by Reuters. 
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The European Union has blocked a merger by Siemens and Alstom that would have created the train equivalent of aviation powerhouse Airbus. EU anti-trust regulators said Wednesday that combining the train manufacturing business of the German and French companies would have harmed competition and lead to higher prices in Europe. 
Read more

 

Bet everything on electric: Inside Volkswagen's radical strategy shift. If Volkswagen realizes its ambition of becoming the global leader in electric cars, it will be thanks to a radical and risky bet born out of the biggest calamity in its history. 
Read more

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Went from Summer to Winter in the space of a day here.