No sign of a Christmas rally today as stocks opened pretty well in early trade only to succumb to strength in the local currency which put pressure on stocks. Westpac’s (WBC) AGM didn’t help sentiment with the bank splashed over most papers + no doubt it will get a good run tonight in the news – Harry covers the AGM below.

The UK election tonight saw volatility priced a touch higher today – investors buying some protection for an unlikely labour win while we also have the ECB decision on rates. At a sector level today, financials usurpingly weak while the materials were again a place or relative strength to be the only sector closing in the green for the session. Telstra’s 2% decline weighed on the communication sector. Overseas markets were mostly higher today, Asian markets up between +0.30% & +1.26% while US Futures were a touch higher during our time zone.

Overall, the ASX 200 lost -43pts /-0.65% today to close at 6708. Dow Futures are trading marginally higher up by +18pts/+0.06%

ASX 200 Chart

ASX 200 Chart

CATCHING MY EYE;

UK Election: Is on tonight and will be the clear driver of markets, of the 5 stocks we talked about in the AM note today (click here) Pendal (PDL) finished down 0.12%, , Iress (IRE) fell -1.13%, Janus Henderson (JHG) -1.28%, Xero (XRO) -1.54% to & Sims Group (SGM) closd +0.27% higher.

The Pound v the Dollar traded higher into the vote.

British Pound v US Dollar Chart

Westpac (WBC) –1.23%; bank shares in general sold off today against the backdrop of a weaker market. Westpac fronted shareholders at their AGM today, spending the bulk of the meeting apologising to investors, stakeholders and anyone impacted by their shortcomings. Interim CEO Peter King was keen to acknowledge that these issues were no longer occurring within the bank although admitted there was some way to go before the bank would be completely comfortable with their processes.

Despite the backlash seen at the event, it appears departing Chairman and the interim CEO managed to woo large institutional investors over such that the remuneration report is accepted and the board is not spilled. A few board members were still up for re-election and all look to have kept their jobs for now. Ex ANZ CFO Peter Marriott who held a position in the risk committee – and notably did not confirm when asked if he had read the Hayne report in full – had a close call but ultimately snuck through with a 58% vote.

The bank also pointed out that earnings were likely to remain under pressure through FY20 with low rates, minimal loan growth and further remediation work required. A lot of this is built into the share prices of the banks, and for that reason we like WBC around currently levels,.

Westpac (WBC) Chart

Lynas (LYC) +9.72%; stormed ahead today on reports they are in the running for a contract with the US Army who are looking for a partner in a rare earths processing facility in the states. Lynas recently announced a processing facility will be built in Kalgoorlie WA near to their Mt Weld mine, however today they are rumoured to be pitching a pilot plant to the US military who are looking to open a facility following threats China will stop exporting. The minerals are a key component in electronics and Lynas is one of a few producers outside of China.

Lynas (LYC) Chart

Broker moves;

· Peak Resources Rated New Speculative Buy at Foster Stockbroking

· Rio Tinto Cut to Neutral at Citi; PT A$100

· Rio Tinto ADRs Cut to Neutral at Citi

· Evolution Raised to Equal-Weight at Morgan Stanley

· Iluka Cut to Equal-Weight at Morgan Stanley

· Iluka Cut to Sell at Citi

· Whitehaven Cut to Neutral at Citi; PT A$2.90

· Harvey Norman Rated New Buy at Jefferies; PT A$4.80

· JB Hi- Fi Rated New Hold at Jefferies; PT A$38

· Seven West Rated New Hold at Jefferies; PT 38 Australian cents

· Nine Entertainment Rated New Buy at Jefferies; PT A$2.07

· GWA Group Reinstated Neutral at Goldman; PT A$3.45

· ALS Cut to Sell at Goldman; PT A$8

· Bingo Industries Cut to Hold at CCZ Statton Equities Pty Ltd.

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