The Australian share market has dived into the red and remained underwater with selling in most of the sectors dragging down the local bourse on Thursday. From the outset we had negative Wall Street leads with the three main US indices retreating after the 10-year Treasury yield hit its lowest level since 2017. It comes just a week after the 10-year fell below the 3-month rate for the first time since 2007. Investors call it an inverted yield curve and it can be seen as an early indicator of a recession.
The S&P/ASX 200 index is 14 points down or 0.2 per cent lower at 6,122. On the futures market the SPI is 4 points lower.
Citi initiated coverage of Costa Group (ASX:CGC), giving the horticultural stock a buy rating, with a 12 month price target of $5.80. Citi says Costa has positioned itself in ‘lucrative fresh produce categories, which will support strong earnings growth’. Citi expects EBITDA growth of 25 per cent from FY18 to FY21, with mushrooms, berries, and avocados being key growth drivers. Shares in Costa Group (ASX:CGC) are trading 0.5 per cent higher at $5.05.
Local economic news
The Australian Bureau of Statistics estimates for the job market for February indicate vacancies increased by 1.1 per cent over the quarter. Over the year there was growth but it was slower than in 2018. For the year, job vacancies increased by 9.2 per cent.
Meantime, the ABS’ ‘Finance and Wealth’ estimates for the December quarter, show households invested $45.9b, up $3.2b from the previous quarter. The increase was driven by a build-up of farm inventories, typical for this time of the year. Dwelling investment though was weak. National investment increased $9.2b in December quarter to a record high of $123.5b.
A major uncertainty regarding IPH's (ASX:IPH) proposed acquisition of intellectual property business Xenith IP (ASX:XIP) Group has been resolved as the ACCC confirms they will not oppose the merger. The ACCC found that most customers they consulted did not express concerns. In IPH’s view this move confirms that the IPH Offer is a Superior Proposal to the QANTM Merger. IPH’s proposal, made on 12 March 2019, was to combine IPH and Xenith through a scheme of arrangement under which IPH would acquire all of the remaining shares in Xenith. But as previously announced, Xenith still has a number of concerns with IPH about its proposal and will keep the market updated on any progress. Shares in Xenith IP (ASX:XIP) are trading 3.6 per cent higher at $1.88.
Best and worst performers
The best-performing sector is Materials, adding 0.5 per cent, while the worst performing sector is Healthcare, shedding 0.6 per cent.
The best performing stock in the S&P/ASX 200 is Pilbara Minerals (ASX:PLS), rising 4.3 per cent to $0.73, followed by shares in Pact Group Holdings (ASX:PGH) and Incitec Pivot (ASX:IPL).
The worst performing stock in the S&P/ASX 200 is Eclipx Group (ASX:ECX), dropping 6.4 per cent to $0.66, followed by shares in Seven West Media (ASX:SWM) and Adelaide Brighton (ASX:ABC).
Commodities and the dollar
Gold is trading at US$1,311 an ounce.
The Iron ore price is 0.1 per cent lower to US$85.11
Iron ore futures are pointing to a fall of 0.1 per cent.
One Australian dollar is buying 70.83 US cents.