Markets Live: ASX blue-chip stocks up

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2:38pm

If you thought banking and financial services stocks were getting a reprieve in the current chapter of Kenneth Hayne's Royal Commission, think again.

Sarah Danckert is covering the opening day looking into the superannuation industry and notes:

Counsel assisting the royal commission, Michael Hodge, QC, "said retail funds operated by the big banks had a far greater number of problems than industry superannuation funds."

"Mr Hodge said the examples of misconduct filed by industry super funds were "extremely minimalist" when compared to issues identified by retail superannuation funds."

2:29pm

Citi Research's North America team is getting more optimistic about earnings per share for US-listed stocks thanks to corporate tax cuts. So far 325 companies in Wall Street's S&P 500 have delivered positive surprises, 52 were negative and 21 neutral.

"Lower tax rates bolstered profits thus far to a greater extent than originally considered as well as buybacks, and the Energy sector has benefitted from more elevated oil prices," Tobian Levkovich wrote in a note to clients.

"The higher earnings this year mean that 2019's outlook is also moving up...we are not adjusting our year-end S&P 500 target of 2,800 at this juncture, but an overshoot of 2,850 is plausible." On Friday the S&P 500 closed at 2,840.

The half-year results for US companies that have come in so far show "better than originally anticipated benefit to earnings from corporate tax cuts with several large companies getting very healthy boosts from extraordinarily low tax payments which allowed for better 'beats'".

1:50pm

Gina Rinehart's offer for struggling junior miner Atlas Iron has reached a key landmark, with the Redstone Corporation/Hancock Prospecting group confirming that it has attained effective control of Atlas.

Shares in the mining stock have not moved from 0.42 cents since July 24, despite more than 700 million shares trading hands late last week.

And in another development in the battle over Atlas, Andrew "Twiggy" Forrest's Fortescue Metals Group revealed on Monday it had sold part of its shareholding in Atlas.

The AFR's Peter Ker reports:

"Fortescue Metals Group will block Gina Rinehart's companies from acquiring 100 per cent of Atlas Iron and keep a seat at the table in future negotiations over port capacity.

Mrs Rinehart's stake in Atlas pushed past 50 per cent on Friday, effectively ending any chance of a rival bid emerging from Fortescue or Atlas' original suitor Mineral Resources Ltd.

Fortescue responded to Mrs Rinehart taking control by revealing on Monday it had trimmed its stake in the loss-making junior from 19.9 per cent to 11.37 per cent.

While the reduced stake effectively concedes the battle for control, it remains large enough to prevent Mrs Rinehart from reaching the 90 per cent shareholding threshold that would allow her companies to move to compulsory acquisition of the remaining Atlas shares."

1:04pm

SEEK is still down close to 9 per cent at $19.96. It is alone among the blue chips dragging on the market, while BHP and the big four banks are working upwards.

In a conference call this morning SEEK's chief executive of Asia Pacific and Americas, Michael Ilczynski, was painting a positive picture despite an earnings downgrade and $180 million impairment.

He told journalists:

"We are only four months into the new structure, we've only had full leadership team in place for six weeks.

"We feel really confident it is the right step for Seek particularly for Seek across ANZ … We do see enormous opportunity.

"We're really encouraged by what we've been doing with our global development team over the past couple of years."

11:32am

ANZ job ads are up 1.5 per cent month on month.

The previous move was a decline of 1.7 per cent.

The S&P/ASX 200 is still higher at 6266 points.

From the ANZ team:

"On a seasonally adjusted basis, ANZ Australian Job Advertisements bounced 1.5 per cent in July, nearly reversing the 1.7 per cent fall recorded last month. On an annual basis, growth ticked up to 7.3 per cent in July (vs 6.9 per cent in June)."

"In trend terms, job ads eased 0.2 per cent month on month in July, the first monthly fall in nearly four years. There has been a clear slowdown in month on month trend growth since February this year."

The banks' head of Australian Economics, David Plank, says:

"Business conditions, while down from record levels, remain well above long term averages. Capacity utilization and profitability also remain at high levels. As such we expect employment growth to continue at a pace consistent with a gradual decrease in the unemployment rate."

"We will be closely watching the Job ads, however, as further weakness in the series may challenge our view. This in turn would have implications for wage growth, consumption and the return of inflation to the target band."

11:19am

Argosy Minerals has jumped 36 per cent this morning to 24.5 cents.

It has a majority stake in the Rincon lithium mine in Argentina and this morning announced production of 99.6 per cent 'battery grade' lithium carbonate.

High demand for battery ingredients has pushed lithium prices up to $US15,000 per tonne, according to Argosy. It also forecasts a tight lithium market in coming years.

11:13am

SEEK Limited is down nearly 9 per cent this morning against a rising market. Currently trading at $19.95.

It has revealed an impairment of $178 million against its Brazilian and Mexican online job sites, off set by a $36 million gain from the sale of Chinese networking site MaiMai.

SEEK's outlook has also changed. Revenue growth for the 2019 financial year is expected to be between 16 per cent and 20 per cent, compared to revenue growth of 24 per cent for the financial year just passed.

And earnings before interest, tax, depreciation and amortisation in 2018-19 is expected to be between 5 per cent and 8 per cent, compared to growth of about 15 per cent for 2017-18.

Regarding Brasil Online SEEK said "deterioration in economic and political conditions have impacted financial performance" leading to a $119 million impairment. And for the OCC platform in Mexico: "Macro and political uncertainty, competitive intensity, operational issues in education and the need to reinvest to evolve the business model have impacted the outlook for future cashflows" leading to an impairment charge of $59 million.

The company is hosting a conference call right now, with more details expected after.

Full announcement can be found here.

10:53am

The Australian stock market is still rising, now up 22 points to 6258. This is a rise of about 0.3 per cent.

Meanwhile trading house Morgans has a dim outlook for reporting season, according to a note released to clients this morning. They cite the latest Thomson Reuters estimate that earnings per share will be around 7.9 per cent for 2017-18, down from 11.3 per cent the previous financial year.

This pace of growth is expected to continue with earnings per share forecast to grow 8.8 per cent in this financial year. Morgans has picked retailers, resources and off-shore earners as the most likely to provide a positive surprise this reporting season.

10:38am

Australian packaging giant Amcor has gone into a trading halt as it edges closer to finalising a multibillion-dollar takeover of a large competitor in the US.

Shares last traded at $15.28.

Amcor on Monday morning lodged a request with the Australian stock exchange for the trading halt pending an announcement in relation to an "all-stock acquisition that is under consideration by Amcor".

It emerged late last year that Amcor, Australia's largest packaging company, is considering a $7 billion buyout of Wisconsin-based plastics business Bemis in a move to dramatically expand its US expansion ambitions.

Bemis runs 57 packaging plants worldwide.

Full AFR background story here.

10:05am

The S&P/ASX200 has opened on a rise and is up 13 points to 6248 already.

ANZ job advertisement data is coming out at 11:30am.

ANZ's research team notes this morning that:

"China delivered a couple of surprises on Friday as markets awaited US jobs data. The PBoC reintroduced a 20 per cent reserve requirement for foreign exchange forwards (giving risk a sudden boost) followed shortly after by an announcement of retaliatory tariffs on US imports (which saw the market turn more cautious)."

"US Treasury yields were lower across the curve as lingering trade concerns likely led to a lift in safe haven demand."