China fires the latest round of shots in the trade war. The US major indices lose 2.4-3 per cent on Friday and President Donald Trump orders US manufacturers to leave China.
China made the first strike on Friday, saying its Government would enforce tariffs of 5-10 per cent on $75 billion worth of US goods in two batches, 1 September and 15 December. Plus, the Chinese State Council will also add a 25 per cent tariff on US cars and 5 per cent on auto parts and components, (from 15 December). This was initially halted tariffs in April. Those key dates are when Trump’s tariffs on Chinese goods will take effect. And speaking about those, in response to China’s move, Trump rose the tariff on the $250 billion on Chinese goods from 25 per cent to 30 per cent and jacked up the tax on the $300 billion of products from 10 to 15 per cent.
The yield curve also briefly inverted on Friday and bonds around the globe are tracking lower. All this has flowed to our market and all the sectors are the in the red. Energy stocks are down the most as the oil price dropped 2 per cent on the trade war heating up, and tech stocks are following lower after Apple shares in the US dropped 4.6 per cent in the US.
The S&P/ASX 200 index is 1.5 per cent or 99 points 6,425. On the futures market the SPI is 1.6 per cent or 105 points lower. Last week, the benchmark S&P/ASX 200 index gained 118 points or 1.8 per cent last week, including the 0.3 per cent lift on Friday.
Monash IVF (ASX:MVF) reported its full year FY19 results with a return to earnings growth in the 2H19, and its net profit after tax in the HY rose. However, for the full year NPAT fell 2.3 per cent on pcp (before one-off non-recurring items) to $20.9 million. Its full year dividends stayed the same as last year 6 cents per share, and its revenue rose 0.9 per cent to $152 million. In the year the company made a world-first scientific breakthrough, achieving commercialisation of non-invasive genetic screening technology. Shares in Monash IVF (ASX:MVF) are trading 3.3 per cent lower at $0.96 at noon.
Zip Co Limited (ASX:Z1P) has inked a landmark debt funding deal to build the businesses scale. The deal, arranged by NAB, was heavily oversubscribed, and closed at $500 million, (an upsize on its original $400 million mandate). Settlement will take place on 5 September 2019 and will provide cost benefits to Zip in the medium and long term. Shares in Zip Co (ASX:Z1P) trade 1.8 per cent higher at $3.44 at noon.
Best and worst performers
The best-performing sector is S&P/ASX Utilities, losing 0.8 per cent, while the worst performing sector is S&P/ASX Energy, shedding 3.1 per cent.
The best performing stock in the S&P/ASX 200 is Resolute Mining Limited (ASX:RSG), rising 14.7 per cent to $1.83, followed by shares in Saracen Mineral Holdings Limited (ASX:SAR) and Evolution Mining Limited (ASX:EVN).
The worst performing stock in the S&P/ASX 200 is Boral (ASX:BLD),dropping 19.5 per cent to $4.00 (after reporting its profit fell 7 per cent to $440 million on less housing starts), followed by shares in G8 Education Limited (ASX:GEM) (after G8 reported its FY profit fell 20 per cent) and Pilbara Minerals Limited (ASX:PLS).
Japan’s Nikkei has lost 2.3 per cent, Hong Kong’s Hang Seng has shed 3.2 per cent and the Shanghai Composite has lost 1.2 per cent.
Commodities and the dollar
Gold soared on Friday and is trading at US$1,545 an ounce - Feb 2012 levels
Iron ore price bounced 4 per cent higher to US$87.81
Iron ore futures are pointing to a rise of 0.2 per cent.
One Australian dollar is buying 67.35 US cents.