Good morning traders. Thanks @ttward, @Ravgnome & the aftermarket loungers. The ASX got quite the wallop yesterday, not doing anything to help those of us that have a hate-hate relationship with Mondays. The major US indices all closed flat after a less wild session than Friday, the DOW even crawled into the green, up 14.51 points, or 0.06%.
ASX Market Report
The Australian stock market has recorded its worst session in 12 weeks amid fears of a worldwide economic slowdown.
The benchmark S&P/ASX200 index closed down 69 points, or 1.11 per cent, to 6,126.2 points at 1615 AEDT on Monday, while the broader All Ordinaries was down 72.2 points, or 1.15 per cent, at 6,208.7.
It's the biggest drop for the local bourse since 1.57 per cent was shaved off the market's value on January 2, the first trading day of the year.
The fall comes amid fears for global growth, with London's FTSE, Germany's DAX and the three US indices all dropping at least 1.5 per cent on Friday following weaker-than-expected manufacturing and services data. "I think volatility is going to be normal in 2019," said Bell Direct equities analyst Julia Lee.
Ms Lee said defensive stocks such as telecom shares, property and trusts and gold miners gained while growth stocks and those exposed to commodity prices dragged.
Tech shares were the biggest loser, down collectively 4.03 per cent, with Wisetech Global down 4.46 per cent to $22.28, Afterpay Touch down 5.33 per cent to $19.55 and Altium down 8.4 per cent to $32.07.
Energy shares were also hard hit, down 3.37 per cent, with Oil Search down 3.76 per cent to $8, Woodside Petroleum down 2.82 per cent to $34.79 and Beach Energy down 5.58 per cent to $2.03
Global miner BHP dropped 1.28 per cent to $37.13, South32 was down 2.84 per cent to $3.76 and Rio Tinto dropped 1.1 per cent to $93.13.
Most gold miners saw gains, with Newcrest up 3.19 per cent to $26.20.
But Dacian Gold dropped 7.35 per cent, to $2.27, after it said its gold production in Western Australia had been hurt by underground equipment availability issues
All the big banks were in the red, with ANZ down 2.26 per cent to $25.92, CBA down 0.91 per cent to $70.78, Westpac down 1.47 per cent to $26.12 and NAB down 0.88 per cent to $24.87.
Telstra gained 0.61 per cent to $3.30 and Spark New Zealand gained 2.88 per cent to $3.57.
Pharma giant CSL dropped 0.96 per cent to $195.30.
Freedom Foods Group gained 4.67 to $4.48 after it said it wasn't interested in buying Kirin Holding's Lion Dairy and Drinks Portfolio. "No one wants to see a spending spree when global growth is down," said Ms Lee.
Real estate company McGrath dropped 7.69 per cent to 24 cents, an all-time low, saying after the close of trading on Friday that weak conditions in the property market were continuing.
The Aussie dollar has recovered some of its losses, buying 70.83 US cents, from 71.08 US cents on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 index was down 69 points, or 1.11 per cent, to 6,126.2 points at 1630 AEDT on Monday.
* The All Ordinaries was down 72.2 points, or 1.15 per cent, to 6,208.7.
* At 1630 AEDT, the SPI200 futures index was flat at 6,108.
CURRENCY SNAPSHOT AT 1630 AEDT:
One Australian dollar buys:
* 70.83 US cents, from 71.08 US on Friday
* 77.90Japanese yen, from 78.76
* 62.66 euro cents, from 62.47
* 53.67 British pence, from 54.09
* 102.92 NZ cents, from 103.17
In Asia
Investors ditched shares on Monday and fled to the safety of bonds as risk assets fell out of favor on growing fears of a U.S. recession, sending global yields plunging.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.5 percent to a one-week trough in a broad equities sell-off in the region.
Japan’s Nikkei hit a five week low after diving 3.1 percent for its largest one-day percentage fall since late December. South Korea’s Kospi index declined 1.7 percent while Australian shares faltered 1.1 percent. Chinese shares was also in the red with the blue-chip CSI 300 index down 1.4 percent.
A yield curve recession model by National Australia Bank is pointing to a 30-35 percent probability of a U.S. recession occurring over the next 10-18 months.
“The risk of a U.S. recession has risen and is flashing amber and this will keep markets pricing a high chance of the Fed cutting rates,” said London-based NAB strategist Tapas Strickland.
As bonds rallied on Monday, yields on 10-year Japanese government bonds slumped to minus 9.2 basis points, the weakest since September 2016. Australian 10-year year yields plunged to a record low of 1.754.
In Europe
Europe suffered a fourth day of losses as persistent worries about the pace of global growth and Brexit uncertainty took their toll on shares in the region.
The pan-European STOXX 600 index closed 0.45 percent lower and is now nearly 3 percent lower than the six-month peak reached on March 19. European stocks pulled back from an initial 0.8 percent fall after an unexpected rise in German business sentiment that eased fears of a recession in the European Union’s largest economy.
London’s FTSE 100 led losses with a 0.42 percent fall, while the more domestically-exposed midcap FTSE 250 lost more than 1 percent to hit a six-week low, dragged down by uncertainty over Britain’s EU exit. Germany, Paris and Madrid fell about 0.2 percent, while Milan lost 0.1 percent, although nearly all major indices were trading below 30-day average volumes.
European stocks last week recorded their steepest drop for the year as weak manufacturing data from Europe and the United States exacerbated fears of a global slowdown.
“Its a lingering fear of the state of the European economy,” said David Madden, an analyst at CMC Markets.
Among the biggest fallers on the pan-region index was Bayer, which was down 2.9 percent after the German pharmaceuticals group and Johnson & Johnson agreed to settle thousands of U.S. lawsuits against their blood thinner Xarelto for $775 million.
In the United States
U.S. stocks slipped on Monday, extending the previous session’s sell-off, hit by worries of a slowdown in global economic growth and as Apple shares fell. But trading was choppy, with stocks moving back and forth between negative and positive territory during the session.
Apple Inc shares dropped 1.8 percent and were the biggest drag on indexes as the iPhone maker unveiled its long-awaited video streaming service.
Weak factory data from the United States, Europe and Japan on Friday led to the inversion of U.S. Treasury yield curve for the first time since 2007, adding to fears of a global economic downturn.
Benchmark 10-year Treasury yields fell to their lowest levels since December 2017, while the yield curve between three-month bills and 10-year notes inverted further as investors evaluated last week’s dovish pivot by the Federal Reserve. The Fed also flagged an expected slowdown in the economy last week and decided against raising interest rates this year.
Friday’s bearish tone has spilled into Monday’s session, said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “The global economy just does not look fabulous. There’s definitely a slowing around the world. That being said, it could be argued that, over the last 10 years certainly, the first quarter has historically been weak, so that potential still exists.”
Australian News
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Nearly a third of small and medium businesses say they're finding it harder to get a loan as Australia's scandal-hit financial sector tightens its purse strings in the wake of the royal commission.
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The national minimum wage will be converted to a higher “living wage” if Labor wins the Federal election, benefiting about 1.2 million workers. Opposition Leader Bill Shorten has confirmed if he becomes prime minister he will increase the minimum wage as soon as practicable.
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Retail superannuation funds had $1.3 billion moved from accounts in December 2018 as the impact of the banking royal commission continues to play out, resulting in the worst half year for retail funds for six years. The data from Strategic Insights shows retail net outflows were particualrly poor in September 2018, with $2 billion of net outflows.
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Financial advisers face $20,000 cost as new standards kick in. Financial advisers are hitting the books to comply with Australia's new minimum study standards but there'sdebate over whether they should receive financial support to cover thousands in course fees. On Monday the Financial Adviser Standards and Ethics Authority (FASEA) released new guidance on approved university courses as it rolled out sweeping changes to financial adviser training
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Westpac is setting aside another $260 million for customer remediation, taking its total to $659 million with fees-for-no-service refunds yet to come. The lender on Monday said about half the provision is related to financial advice and the remainder related to business and consumer banking.
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NAB has scrapped a contentious program under which people including gym instructors and hairdressers were paid commissions for loans they pitched to their customers. The lender said on Monday it would end its so-called introducer program on October 1 as part of its response to the financial services royal commission.
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Hold on tight Melbourne, Australia's first government-compliant motor scooter ride sharing service has arrived. Scooti claims it will change the face of Melbourne's commuter scene by breaking through inner-city gridlock.
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Global News
The Federal Reserve’s stunning about-face on rate increases along with weak economic data has left a key part of the U.S. Treasury yield curve close to levels at which the U.S. central bank has in the past been prompted to cut rates.
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President Donald Trump lashed out at his enemies on Monday, accusing unnamed people of evil actions and treason, a day after his attorney general released a summary of Special Counsel Robert Mueller’s findings clearing the president’s campaign of conspiring with Russia in the 2016 U.S. election.
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Apple prepared to lift the curtain on Monday on a television and movie streaming service that will allow users of its 1.4 billion gadgets to stream television shows and movies, both Apple originals and those from other creators, in a first step to challenge streaming video leaders Netflix and Amazon.
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Attorney Michael Avenatti, who represented adult film star Stormy Daniels in her legal battles against U.S. President Donald Trump, was arrested on Monday and charged with extorting more than $20 million from Nike, federal prosecutors said.
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NASA considers sidelining its Boeing-built rocket for an upcoming Moon mission. In the face of more frustrating delays with the rocket Boeing is building for NASA, the space agency will decide how to launch an upcoming Moon mission. NASA is expected to announce this week whether it will sideline its long-overdue rocket, Space Launch System, and instead use commercial launch vehicles.
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Piling pressure on May, EU executive says no-deal Brexit plans complete. EU officials said on Monday they had completed their plans for what they saw as an increasingly likely no-deal Brexit, piling pressure on British Prime Minister Theresa May as she battled to persuade her own lawmakers to back a divorce agreement.
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The UK's biggest fraud trial gets under way on Monday with US technology giant Hewlett-Packard suing the former head of software firm Autonomy. The civil case is over the £8.4bn sale of the software firm to Hewlett-Packard (HP) in 2011.
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JPMorgan is asking around 300 staff in its London office to sign new contracts that will require them to move to one of the bank’s other hubs in the European Union if there is a no-deal Brexit, according to a person familiar with the matter.
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The boss of German chemicals giant Bayer insisted Sunday its multi-billion dollar takeover of Monsanto was a "good idea", despite huge legal costs piling up over its Roundup weedkiller. "The Monsanto acquisition was and is a good idea," Werner Baumann told newspaper Frankfurter Allgemeine Sonntagszeitung, when asked if he would have changed his mind about buying the US group if he could.
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Xi Jinping is in the City of Light during the next 48 hours as he rounds off the final leg of his European tour. He will probably notice the dark clouds looming on the horizon when it comes to Beijing’s economic model. Later today, China’s head of state will have a tete-to-tete with French President Emmanuel Macron at the Elysee Palace in Paris.
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Stock News
White Cliff Minerals lands maiden 5.7 million tonne nickel-cobalt resource at Coronation Dam
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White Rock Minerals enters $30 million JV agreement with Sandfire Resources
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At last, Shell’s LNG giant Prelude ships first cargo. Shell’s Prelude floating LNG vessel shipped a cargo of condensate over the weekend, its first product offtake since arriving off the Kimberley coast almost two years ago. A Shell spokeswoman confirmed yesterday the shipment of condensate had sailed, and that it marked another step towards steady operations.
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Severe Tropical Cyclone Veronica could have a significant impact on the Australian economy and Chinese steel industry, with iron ore exports temporarily stopped from Port Hedland, the world's largest bulk export port, an analyst has warned.
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Boss Resources increases uranium exploration target at Honeymoon project
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Australian energy giant AGL 'gouged' customers after Hazelwood closure, new research shows
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Artemis Resources Ltd ASX:ARV) has completed a strategic review and reset of its priorities following the appointment of chairman Sheikh Maktoum Hasher al Maktoum. The company is the first in the West Pilbara to consolidate a large package of prospective gold tenements with a processing plant.
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Oklo Resources delivering results from gold assets with $5 million drill campaign
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West Wits Mining Ltd (ASX:WWI) chairman Michael Quinert has purchased 367,401 shares through on-market trades. The purchase has increased Quinert’s total indirect holding in the company to about 23 million shares.
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Following on from ttward, I am trying some positive thinking here. Green, green, green… and some unrelated bacon puff pastry squares just cause they look bloody delicious.
