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Tuesday 25

September, 2018 7:25 AM



CommSec Daily Report Wednesday

CommSec Daily Report Wednesday

Local shares shrugged off the mixed tone on Wall Street overnight.

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02.05.2018 01:04 PM

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Local shares shrugged off the mixed tone on Wall Street overnight. After being down as much as 355 points, the Dow Jones ended lower by 64 points or 0.3%. The S&P 500 index rose by 0.3%, while the Nasdaq gained 64 points or 0.9%. The ASX 200 started the session with a loss of 1 point, before trading to a 5 point loss at the low of the morning, thereafter the market found a bid and the ASX 200 was 37 points to the better at session highs.

At lunch there were only 2 sectors in red, Financials, & Telecoms, which shared similar sized declines of around 0.2%. Industrials and Information technology were the leading improvers with each of the sub-indices advancing by circa 1.3%. Healthcare names recovered from the weakness that was a feature of yesterday’s session.

Company moves saw JB Hi-Fi (JBH) lead the declines in the ASX 200 with a fall of 8%. The retreat came after the retailer lowered its earnings guidance for the full year. JBH expects full year earnings of $230 million compared to a previously estimated range of $235 million to $240 million. The group highlighted margin pressure, specifically where The Good Guys business was concerned, a reflection of challenging conditions in the homeappliance market and unseasonable weather. Year to date, total JB Hi-Fi sales rose 9%, while comparable sales rose 6.3%. Total Good Guys sales in year to date terms rose 1.2% and comparable sales increased 0.3%. Notwithstanding the lowered outlook JBH reaffirmed full year group sales guidance of $6.85 billion.

Qantas (QAN) shares rose 6% after reporting strong revenue growth in its third quarter, up 7.5% to $4.25 billion. QAN affirmed its existing outlook for capacity, fuel costs, capital expenditure and transformation benefits in the second half of FY18. As a result of these expectations, the carrier anticipates a full year underlying profit before tax of between $1.55 billion and $1.60 billion

Woolworths shares firmed 1.4% or 38 cents to $28.13 after reporting quarterly sales figures. The grocer said Australian Food sales increased by 4.7% to $9.571 billion. Comparable sales for the same rose by 4.4%, helped by the timing of Easter compared to the same quarter in the prior year. Easter-adjusted comparable sales rose by 4.0%. WOW said online sales in Australian Food continue to grow strongly, by around 30%, reflecting strategic digital initiatives delivered throughout the year. Price deflation remained a factor however: average prices declined 1.3% compared to the same quarter in the prior year, with Fruit and vegetables deflation remaining high at 5.4%. Fruit and vegetables deflation is expected to remain high in Q4’18 as the category cycles the inflationary impact of Cyclone Debbie in the prior year. Excluding Fruit & Vegetables and Tobacco, average prices declined by 2.4%.

The Aussie dollar firmed in early Asian trade having fallen from highs near US75.40 cents to lows near US74.70 cents overnight. The weak tone for the local unit came after cautious comments from RBA Governor Lowe who noted in a speech overnight that it was hard to see an uptick in inflation, given the weak pace of wage growth at present. A short time ago the local unit was at US74.90 cents

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