ASX volatility to continue; Trump pushes for $US1tn in stimulus
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Mirvac withdraws 2020 earnings guidance

Luke Housego

Mirvac withdrew its financial year 2020 earnings and distribution guidance citing uncertainty over the duration and impact of the COVID-19 pandemic.

“Additionally, any forward looking statements, including comments about active and passive earnings, are withdrawn,” the property developer said.

Mirvac added that its balance sheet and debt position continues to remain robust and the group is well positioned with $944 million of cash and committed undrawn bank facilities. Gearing was 20.8 per cent at the end of December.

“We are taking swift and prudent measures across the business to not only protect our employees and stakeholders, but also provide transparency in what is an ever-changing environment,” said Susan Lloyd-Hurwitz.


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SkyCity to expects $NZ55m coronavirus hit

SkyCity Entertainment says the coronavirus has negatively impacted its business and it will take a $NZ55 million earnings hit as a result.

In , the casino’s visitation has been down 15 per cent, gaming machine revenue down 14 per cent, domestic table game revenue down 43 per cent, hotel occupancy down 79 per cent, food & beverage revenue down 32 per cent and SkyTower revenue down 35 per cent.

Auckland

Skycity has five casino, including its flagship Auckland venue. Photo: Bloomberg

The company also said its Hamilton, Queenstown and Adelaide businesses had also taken significant revenue hits.

The company said based on the experience of the past few weeks, earnings would be $NZ55 million lower than previously expected.

SkyCity said it expected EBITDA for the 2020 financial year to be in the range of $NZ230 million to $NZ250 million, with normalised NPAT for the year in the range of $NZ85 million to $NZ100 million.

Oil prices sink further despite stimulus

Luke Housego

Oil prices were hit again overnight amid collapsing demand for crude products as social distancing measures ramp up across the globe.

Brent crude slid 4.9 per cent to $US28.57 a barrel while fell 6.4 per cent $US26.87.

Iraq has reportedly urged OPEC and its allies to convene a meeting in order to re-balance the to stop the price from falling further.

Meanwhile, Saudi Arabia is using natural gas from its new Fadhili gas plant to replace domestic in order to increase its oil exports by a further 250,000 barrels a day.

“Crude has eased dramatically in the last several trading sessions but remains well above GFC levels, according to the CBOE ,” said NAB head of commodity research Lachlan Shaw.

Aussie dollar slumps to 17-year low

William McInnes

The Australian dollar has fallen to its lowest level in 17-years overnight, dropping below US60¢ for the first time since 2003.

The AUD broke through the milestone lowe just before 10pm AEDT on Tuesday night before drifting lower through the session.

“The Australian dollar dipped below $0.60000 overnight against a stronger US dollar following additional FOMC support and the prospect of US fiscal stimulus,” said CBA currency strategist Kim Munday.

CEO

The trade-exposed Aussie dollar has been under pressure since the outbreak began. Fairfax Media

“In Australia, the ABS is increasing the frequency of some key Australian economic data in order to help better understand the impacts of the coronavirus on the Australian economy.

“Today we receive a preliminary estimate of February retail turnover. We expect December and January’s will have extended into February.”

In the last 24 hours, the Aussie dollar has tumbled 2 per cent to US59.94¢, the local currency’s seventh straight decline.

The local currency dipped to a low of US59.60¢ overnight, its weakest level since April 2003.

Britain puts economy on ‘wartime’ footing as businesses cry for help

Hans van Leeuwen

London | Britain has promised a deluge of emergency support to virus-hit businesses, as companies reel from the cliff-edge slump in demand during the country’s slide into de facto lockdown.

“We must act like a wartime government, and do whatever it takes to support our economy,” Boris Johnson told his daily press conference on Wednesday (AEDT).

crude oil volatility index

British Prime Minister Boris Johnson speaking at a press conference on Tuesday. AP

“We must support millions of businesses and tens of millions of individuals and families in the coming months … with a profound sense of urgency.”

Chancellor Rishi Sunak said there would be “government intervention in the economy on a scale unimaginable only a few weeks ago”, including a mammoth £330 billion ($640 billion) scheme of government-guaranteed loans for business.

These would be available from the start of next week and are worth 15 per cent of British GDP. He also promised an imminent assistance package for airlines and airports, and he offered uninsured pubs, restaurants, shops and leisure companies a cash grant of up to £25,000 per business plus a year’s relief from council rates.

Read the full story here.

Overnight market moves

Timothy Moore

  • ASX futures down 7 points or 0.1% to 5279 at 6.59am AEDT
  • AUD -2% to US59.93¢ at 7.04am AEDT
  • On Wall St near 4pm: Dow +5.2% S&P 500 +5.1% Nasdaq +6.2%
  • In Europe: Stoxx 50 +3.3% FTSE +2.8% CAC +2.8% DAX +2.3%
  • Spot gold: +1.2% to $US1531.81/oz at 2.07pm New York
  • Brent crude: -3.1% to $US29.11 a barrel
  • Iron ore +0.4% to $US91.20 a tonne
  • Dalian iron ore +0.9% to 671 yuan
  • LME aluminium -1.4% at $US1651.50 a tonne
  • LME copper -2.8% to $US5144 a tonne
  • 2-year yield: US 0.50% Australia 0.50%
  • 5-year yield: US 0.74% Australia 0.52%
  • 10-year yield: US 1.10% Australia 1.01% Germany -0.44%

‘We’re going big’: Donald Trump details household cash plan

Jacob Greber

Washington | Donald Trump is pressing Congress to approve an aggressive $US1 trillion ($1.67 trillion) stimulus plan that would send cheques to households within two weeks, provide tax relief, and bolster airlines and other hard-hit sectors to keep the economy afloat.

“We’re going big,” said Mr Trump on Tuesday (Wednesday AEDT) on a raft of efforts between the White House and lawmakers to clinch a wide-scale “phase three” support package. “And it’s going to be bold.”

oil consumption

The US President’s rhetoric on the outbreak swung this week. AP

Treasury Secretary Steven Mnuchin and lawmakers from both sides of the political divide were hammering out details of the package as fears mounted about the scale of economic damage inflicted by what may yet turn into a nation-wide shutdown.

“We put a proposal on the table that would inject $US1 trillion into the economy,” Mr Mnuchin told reporters on the Hill, adding that now was not the time to worry about the US budget deficit.

Stocks surged on the news, sending the Dow Jones Industrial Index up more than 1000 points before it pared that surge. It was 1048.9 points or 5.2 per cent higher at 8am AEDT.

Read the full story here.

Good morning

Good morning and welcome to Markets Live for Wednesday.

To follow developments outside of markets relating to COVID-19, you can follow our dedicated live feed here.

This blog is not intended as investment advice.

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