Baby Bunting bunts to 3yr high, Cochlear bouches back: Aus shares lose 2.8% this week, steady Friday

Market Reports

by Jessica Amir

The Aussie share market flatlined on Friday, holding steady after the local bourse felt its biggest drop of the year yesterday, taking the market to June levels. It was the fifth biggest fall in the market in nine years. At the closing bell the S&P/ASX 200 index closed 0.04 per cent or 3 points lower at 6,406 points. Over the week, the market has lost 2.8 per cent or 179 points on the yield curve inverting.

However there was plenty of pockets of gold in the local market amid reportING season (i'll touch on that later in the bulletin (below)).

Overnight, US equities mostly rose on stronger than expected US retail sales, better-than expected Wallmart results, plus the Chinese government came out saying it holds “hopes the US will meet China halfway” on the tariff war.

No local economic news today. Yesterday we learnt the headline unemployment rate held steady at 5.2 per cent - still below the RBA target of 4.5 per cent. And we also saw that the number of employed people rose more than expected in July (up 41,000 instead of 14,000).

Futures market

Dow futures are suggesting a rise of 148 points.
S&P 500 futures are eyeing a rise of 18 points.
The Nasdaq futures are eyeing a lift of 63 points.
And the ASX200 futures are eyeing a 0.3 per cent or 20 point fall.

Company news

Baby Bunting Group (ASX:BBN) shares hit an almost three year high with the business cementing itself as the ‘go to destination for baby goods in Australia’. The rally came on the company announcing its net profit after tax (pro forma) rose 58 per cent on the prior 52 week period, to $15.1 million, beating expectations, with CommSec expecting $12.5 million. Shares in Baby Bunting Group (ASX:BBN) closed 11.1 per cent higher at $2.70.

Debt buying company, Credit Corp Group Limited (ASX:CCP) came out of trading halt, announcing it has purchased a debt collector Baycorp Holdings for $65 million, snapping up the the entity from Encore Capital Group (NASDAQ: ECPG). On the back of that, it also charged up its earnings guidance for 2020, with its net profit after tax (NPAT) set to rise 15 to 18 per cent.

Newcrest Mining (ASX:NCM) announced statutory profit for the 12 months to 30 June 2019 to surged 178 per cent, to $561 million. It also completed the purchase of 70 per cent of tier 1 orebody in Canada, the Red Chris copper-gold mine in Canada, for $804 million. As for FY20 its gold and copper production are tipped to be less than FY2019, on lower grade ore and maintenance in the September 2019 quarter.

Cochlear (ASX:COH) saw its net profit rise 7 per cent rise to $265.9 million (excl revaluation of innovation fund). The news saw its shares claw back from selling since 6 August, but it finished 3.9 per cent higher at $209.43, after hitting $213.80 earlier today. 

Seven West Media (ASX:SWM) announced its new Managing Director and Chief Executive Officer, is James Warburton replacing Tim Worner who inked his resignation after being in Seven leadership with over two decades. Chairman Kerry Stokes says James’ passion and energy will reinvigorate the team.

IPOs

Software developer for the life, accident and health insurance industry. FINEOS Corporation Holdings (ASX:FCL) started trading on the ASX today, after issuing shares are at price of $2.50, opening at $2.80 and closing at $2.70. It was underwritten by Macquarie Capital (ASX:MGQ) Limited and Moelis (ASX:MOE).

Best and worst performers of the day

The best performing sector was S&P/ASX Financials adding 0.7 per cent while the worst performing sector was S&P/ASX Communication Services, shedding 2.7 per cent.

The best performing stock in the S&P/ASX 200 was Credit Corp Group Limited (ASX:CCP), rising 13.3 per cent to close at $27.27. Shares in Super Retail Group Limited (ASX:SUL) and The Star Entertainment Group Limited (ASX:SGR) followed higher after the casino giant’s statutory NPAT rose 34 per cent to $198 million in FY19.

The worst performing stock in the S&P/ASX 200 was Ooh!Media Limited (ASX:OML), dropping 27.5 per cent to close at $2.93. It comes as earnings (EBITDA) is expected to drop in FY19 to $125 million and $135 million, down from its prior $152 million to $162 million guidance, on a sharp decline in bookings. Shares in Breville Group Limited (ASX:BRG) and Reliance Worldwide Corporation Limited (ASX:RWC) followed lower.

Asian markets

Japan’s Nikkei has added 0.2 per cent, Hong Kong’s Hang Seng has gained 1 per cent and the Shanghai Composite has lifted 0.8 per cent.

Wall Street

Wrapped up our four trading days this week lower with the Dow seeing its biggest drop of the year falling 3 per cent on Wednesday, after we saw “the 2-10 inversion” (the benchmark 10-year treasury yield fell below the 2-year rate). Yesterday in the US (Thursday) the 30-year treasury bond also fell to a historical low, and the 10-year treasury yield hit its lowest level in 3 years. Over the our days, the Dow Jones lost 2.8 per cent, The S&P 500 lost 2.5 per cent and the tech heavy Nasdaq lost 2.5 per cent.

Commodities and the dollar

Gold is trading at US$1,517 an ounce.
Iron ore price (NYMEX) fell 2.5 per cent to US$88.44 [continuing its fall from its July 2019 five year highs (of $117.76)].
Iron ore futures are pointing to a rise of 0.2 per cent.
Light crude is US$0.62 lower at US$54.63 a barrel.
One Australian dollar is buying 67.91 US cents