Patrick Poke

Royal Commission results handed down as Commonwealth Financial Planning gets hamstrung by the regulator; how the internet could be split in two; and "Bond King" Bill Gross retires from money management. Here's what's happening in markets today.

What I'm reading

The Banking Royal Commission

All the focus yesterday was on the Royal Commission, but earlier in the day, Commonwealth Financial Planning was informed by the regulator that they can no longer charge ongoing advice fees. Meanwhile, ABS building approvals data showed another huge fall. Here's some RC reading for you:

  1. My quick-take on the Royal Commission recommendations
  2. NAB singled out for special treatment
  3. The AFR's complete coverage (subscription required)

The 'splinternet': could China and the US create two separate internets?

As American-Sino relationships continue to diverge, more and more applications will only be available in particular countries. Kaifu Lee, the CEO of China-based venture capital firm Sinovation Ventures, sees Southeast Asia, India, Africa, and others taking China's side.

Read article

The Bond King retires

After a storied four-decade career, Bill Gross has finally decided to pull the pin after struggling to find performance in recent years.

Read article

Stocks to watch

  • The Big Four banks, AMP, and IOOF all begin trading for the first time since the Royal Commission results, and so far they look to be opening up from yesterday.
  • Mortgage Choice (MOC) isn't faring so well, and it's currently crossing ~10% below yesterday's closing price. The company started 2018 at $2.50 per share, and is currently set to open at around 90c.
  • Freedom Insurnace Group (FIG) requested a trading halt this morning to await the release of "a material update on the financial position of Freedom and its subsidiaries."
  • Flexigroup (FXL) announced revised guidance. While underlying cash profit is expected to be up by 3%, a $12m impairment in the Commercial Leasing business will weigh on reported profits.
  • James Hardie (JHX) announced third-quarter results, with sales up 23% and profit up 12% year-on-year.
  • Nickel stocks such as Western Areas (WSA) and Indepedence Group (IGO) could be in for a big day on the back of a nearly 5% rally in the metal overnight.

Key market data

  • ASX Futures: 5,876.0 (+1.28%)
  • AUD/USD: 0.7224 (-0.32%)
  • ASX200: 5,891.20 (+0.48%)
  • S&P 500: 2,724.87 (+0.68%)
  • China A50: 11,496.77 (+0.61%)
  • Australia 2-yr bond: 1.840 (-0.81%)
  • Australia 10-yr bond: 2.243 (+0.04%)
  • US 2-yr bond: 2.538 (+1.13%)
  • US 10-yr bond: 2.725 (+1.26%)
  • Gold (USD/oz): 1,316.45 (-0.40%)
  • Copper (USD/lb): 2.800 (+1.08%)
  • Brent Oil (USD/bbl): 62.80 (+0.14)
  • 62% Iron Ore (USD/t): 69.15 (unchanged)

Upcoming releases and events

  • Trade data and retail sales for December are both due this morning
  • The RBA board meeting is this morning, but expectations are broadly for the board to remain on hold
  • The RBA's statement on monetary policy is released on Friday.

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