Patrick Poke

NAB CEO and Chairman taking flak from all sides as the viability of their positions is called into question; bank short-sellers feel the squeeze as banks put on $5b in a day; and Nobel Prize winner, Danny Kahneman talks about why we contradict ourselves. Here's what's happening in markets today. 

What I'm reading

Ken Henry and Andrew Thorburn take flak following Royal Commission results

The final report from the Banking Royal Comission was particularly scathing of NAB's Chairman, Ken Henry and CEO, Andrew Thorburn. Compounding matters, Henry was defensive and critical of Kenneth Hayne in his response yesterday. 

Read article (AFR subscription required)

Bank shorts get squeezed

Despite fears of a washout, bank shares (plus AMP and IOOF) had a huge rally yesterday on the back of the Royal Commission report. Short sellers faced a $5b bill yesterday as share prices shot up 5-10% in a day. 

Read article

Why do we contradict ourselves? 

Nobel Prize winning behavioural economist Daniel Kahneman recent appeared on WNYC radio. Kahneman is one of the creators of the field of behavioural economics, and author of the best seller, Thinking Fast and Slow. In this podcast, he discusses why we contradict ourselves and confound each other. 

Access podcast

Stocks to watch

  • Commonwealth Bank (CBA), Insurance Australia Group (IAG), BWP Trust (BWP), Dexus (DXS), and Nick Scali (NCK) announced half year results this morning
  • I'll single out Genworth (GMA) as a particularly interest result as it offers insights into the current state of mortgage arrears in Australia
  • Coles Group (COL) and Viva Energy (VEA) announced they've extended and updated their alliance partnership. Coles also provided a trading update for its convenience divison, which showed a large drop in division EBIT versus the prior comparable period. 

 

Key market data

  • ASX Futures: 5,961.5 (+1.46%)
  • AUD/USD: 0.7236 (+0.13%)
  • ASX200: 6,005.90 (+1.95%)
  • S&P 500: 2,737.70 (+0.47%)
  • China A50: 11,496.77 (+0.61%)
  • Australia 2-yr bond: 1.847 (+0.27%)
  • Australia 10-yr bond: 2.239 (+0.95%)
  • US 2-yr bond: 2.528 (-0.38%)
  • US 10-yr bond: 2.704 (-0.78%)
  • Gold (USD/oz): 1,319.30 (unchanged)
  • Copper (USD/lb): 2.818 (+0.82%)
  • Brent Oil (USD/bbl): 62.09 (-0.67%)
  • 62% Iron Ore (USD/t): 69.15 (unchanged - market closed)

Upcoming data and events

  • Chinese markets closed for Chinese New Year, NZ markets closed for Waitangi Day
  • The RBA Governor, Phillip Lowe, will make his first speech of the year titled "The Year Ahead" at the National Press Club today in Sydney
  • President Trump will make his State of the Union address today
  • AiG's Construction Performance Index is released tomorrow.


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