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The sharemarket went from go to whoa today as early gains in the miners and banks were either whittled away or completely reversed. The ASX 200 index look set to push beyond 5800 points not long after the open, but then traded pretty steadily lower through the session to close 5 points lower at 5755.
BHP dropped 0.9 per cent, Fortescue ended flat and Rio added 0.3 per cent, despite iron ore surging overnight. South32 had a good day, though, climbing 4.3 per cent.
The big banks were initially buoyed by more gains from their Wall St brethrens, but ended lower: CBA by 0.6 per cent, Westpac by 0.4 per cent, NAB by 0.2 per cent and ANZ by 0.3 per cent.
The Aussie dollar received a bump higher after NAB's business conditions survey hit decade-highs, which put the key data point "in rate hike territory," UBS economists said. Our currency climbed 0.4 US cents through the day to last fetch 74.8 US cents.
Worries around tighter monetary policy may have played a role in the sharemarket's sharp drop-off from around 1:30pm on, after stocks had initially rallied on the data. Falling Wall St futures may have also played a role.
Wesfarmers fell 0.5 per cent after revealing its new CEO, and Woolies added 0.1 per cent. Telstra dropped 1 per cent and CSL 0.3 per cent.
A number of companies revealed profit numbers, and investors proved hard to impress, with the notable exception of Nick Scali:
- Challenger -2.2%
- Cochlear -3.6%
- Treasury Wine -4.7%
- SeaLink Travel -4.3%
- GPT Group +1.2%
- Nick Scali +9.6%
What's next for the Trump rally? Allianz chief economic adviser Mohamed El-Erian asks:
In this period when markets are predominantly driven by policy, all it took were some signals from the White House for the major US indexes to end last week at new highs and for the dollar to strengthen to levels not seen for months.
Moreover, with actual data suggesting the Federal Reserve is likely to hold off a March interest rate hike, Treasury yields were well behaved, addressing one of the investor concerns about the sustainability of the "Trump rally."
The feel-good factor was not limited to the US. It spilled over to other stock markets around the world, taking some to levels not seen for quite a while.
President Donald Trump's promise of "phenomenal" tax reform was an important contributor to last week's gains, but it was not the only one. Markets also took heart from the talks between the president and Prime Minister Shinzo Abe of Japan, who was on an official visit to the US. The conciliatory tone tempered general concerns about the risk of US protectionism and global trade wars.
But rather than being viewed as a breakout to the upside, last week's stock gains are better thought of - at least for now - as part of the more volatile period for stocks in the post-Trump election era.
Indeed, the up and down movements last week, including intraday, stood in contrast to the much narrower trading band that prevailed in the prior phase - of consolidation between mid-December and the presidential inauguration - and the overall gains were moderate relative to those of the first phase of the "Trump rally" (from Trump's acceptance speech on November 9 to mid- December).
With asset prices where they are now, the two competing sets of policy influences on stocks -- the set that theoretically offer the prospects of healthy reflation (such as tax reform, infrastructure and de-regulation) versus the one that would increase the risk of stagflation (particularly trade protectionism of the type that triggers retaliatory actions from other countries) - are much more tenuously balanced now.
As a result, any particular policy move is likely to have a more marked price impact. Also, after the president's inauguration and his overall policy activism, it is getting harder to keep traders patient these days.
For the third phase of the "Trump rally" to give way to another big and sustainable leg up in stocks and other risk assets, pro-growth policy announcements would need to give way to detailed careful design and, with the administration working collaboratively with Congress, sound implementation. There would also need to be policy improvements elsewhere - particularly in China, Europe and Japan - lest a consequential appreciation of the dollar pose a significant headwind to corporate performance and fuel protectionist forces within the US.
By contrast, a slip by the US. into protectionist measures would likely fuel stagflationary tendencies, placing considerable downward pressures on stocks and other risk assets. These pressures would be particularly intense if accompanied by European political developments (such as the election of Marine Le Pen as president of France) that put in doubt the integrity and proper functioning of the eurozone.
Here's the whole article at Bloomberg
Speaking of our favourite bulk commodity, Chinese iron ore futures are up for a sixth session in a row and have hit their highest in more than three years, amid firm steel demand in the world's top consumer and tighter supply driven by Beijing's campaign against smog.
As futures rallied, spot iron ore prices have similarly surged, with the spot benchmark overnight topping $US90 a tonne for the first time since 2014.
"China's positive steel outlook is driven by ongoing supply tightness and sustained demand growth," Argonaut Securities analyst Helen Lau said in a note.
Lau said some Chinese steel mills in Hebei, Beijing and Tianjin have received orders from local governments to suspend steel production from the second half of February to the first half of March.
The most-traded iron ore futures contract on the Dalian Commodity Exchange rose 2.2 per cent and as far as 716 yuan ($US104) a tonne, its strongest since October 2013, but those gains have moderated and the contract is trading up 0.6 per cent at 704 yuan.
On the Shanghai Futures Exchange, rebar was up 0.2 per cent at 3407 yuan a tonne. It also marked the sixth straight day of increase for the construction steel product, which touched 3450 yuan earlier, near Monday's two-month peak.
Amid a torrid rally in steel prices and other raw materials, China's producer price inflation picked up more than expected in January to near six-year highs, adding to views that global manufacturing activity is building momentum.
Besides regular environmental inspections conducted by Chinese authorities that have led to mills temporarily shutting their plants, the government plans to cut steel capacity by at least half in 28 cities across five regions during the winter heating season as Beijing intensifies its war on smog, a draft policy document shows.
Along with tighter supply, steel demand is also picking up after the Lunar New Year break and should strengthen during spring, traders say.
Bids for physical iron ore cargoes have risen as futures rallied.
Analysts' forecasts have struggled to keep up the incredible bounce in iron ore prices over the past six months or so, chronically underestimating the strength of the steelmaking material.
This chart shows the median analyst estimate for the average iron ore price at the start of the past few quarters against the actual figure. It also shows how the expect iron ore prices to evolve from here.
So at the beginning of the 2016 June quarter analysts expected iron ore to fetch on average $US42.50 per tonne over the following three months. Instead it averaged $US55.63.
At the start of the September quarter they expected iron ore on average to fetch $US46, instead it went for $US58.32. Over the three months to December 31 the expectation was for $US51/tonne, but iron ore actually averaged $US70.98.
At the end of 2016, the median estimate was for $US58/t, but so far it's $US81.89. They have updated their forecasts to $US74/t for Q1, but expect iron ore to fetch $US60.31 over the June quarter, $US58/t over the September quarter and $US55/t over the December quarter.
Looks like a five-day rally that has added 150 points to the ASX200 is finally running out of steam.
After a promising start to today's session that pushed the benchmark index close to 5800 points, investors have started to cash in some of their profits.
"Given that our local index ... was approaching the psychological barrier of breaking through 2017 highs, it's not surprising to see a level of profit taking," said Gary Huxtable, client adviser at Atlantic Pacific Securities.
He noted that after some frantic movements, particularly in the top 20 stocks this morning, the local sharemarket is slowly unwinding this afternoon.
"We may still finish in the green today, but it's interesting to note that the bears have gained a semblance of control throughout the day," Huxtable said.
Shares have been on a roll since no other than the US President revived the Trump trade last week, flagging a substantial tax cut announcement over the next few weeks.
Macquarie Bank property borrowers will have to disclose their spending on everything from footy to fashion under tough new credit rules about to be introduced.
Borrowers seeking a loan will be asked for details on their spending in 12 separate categories covering household and discretionary spending to asses eligibility for a loan.
The move is the latest in a succession of lending tightening by the bank extending back to last May involving higher rates, tougher terms and bigger deposits, particularly for buyers in single and multiple apartments in popular high rise postcodes.
Several lenders, including industry giants like CBA, are increasingly willing to sacrifice housing market share to lower risk, stay within regulatory growth speed limits and offset rising wholesale funding and regulatory costs.
From Wednesday, all Macquarie loan applicants will have to provide detailed household expenditure. Interest-only applicants will have to provide a reason and explain why they are choosing interest-only, rather than, say, a principal and interest loan.
Brokers and Macquarie advisers processing applications will be required to explain how interest-only repayments work and the impact on the loan's principal and repayments at the end of the interest-only term.
Clients' requirements and objectives will be recorded.
They will have to provide details on household spending like clothing and personal care, groceries, transport and other household expenses, such as utilities and rates.
Discretionary spending on child care, education, insurance, medical and health, investment property outlays, recreation and entertainment, telephone, internet, pay TV and media streaming subscriptions will also be required.
Financial regulators and the RBA are increasingly nervous about interest-only mortgages due to fears that borrowers do not have a clear strategy about repaying the principal. They have been pressing for tougher vetting and more transparent procedures for advising potential borrowers.
Problems could be compounded if rates were to rise from current historic lows, or borrowers' personal circumstances adversely changed, particularly in markets like Melbourne and Sydney where prices are rising five times faster than inflation and wages.
Macquarie Bank's pending announcement is the second time in three months it has tightened interest-only lending.
In December it increased lending rates by up to 10 basis points for interest-only loans up to $750,000 and 5 basis points for higher loans.
The clock is now ticking on the push for a board spill at Hunter Hall Global Value, with the lodgement​ of a formal notice to the company's board to hold a shareholder meeting to consider the matter.
Well known fund manager Geoff Wilson is seeking to removing the company's existing directors who would be replaced by Kym Evans, who is a corporate lawyer, journalist Glenn Burge and Emma Davidson, a London-based investment advisor.
All three of Wilson's nominees are independent both of his group of listed investment companies and also are independent of both Hunter Hall Global Value, and its management company, Hunter Hall International.
Wilson is also seeking to slash directors fees in half, as he pushes the board to provide an equal access share buy back at net tangible asset value.
Wilson Asset Management and other associated entities have accumulated an 11.5 per cent stake in Hunter Hall Global Value.
Wilson is pressing the listed investment company to offer all shareholders the ability to sell out their stake in the company at net tangible asset backing of the shares, a call which Hunter Hall Global Value is resisting.
Since going public with his proposal, Washington H. Soul Pattinson and Co has emerged with a 6.5 per cent shareholding in Hunter Hall Global Value.
Valued in the sharemarket at around $300 million, Hunter Hall Global Value is the largest single asset of Hunter Hall International, which Soul Pattinson is seeking to gain control of.
Say what you will about Donald Trump's economic prescriptions, it's hard to argue he hasn't been a boon for corporate sentiment. A looming question for investors is how that buoyancy will translate when it comes to business spending.
Cheerfulness is spreading -- literally. Executives used the word "optimistic" on a record 51 per cent of earnings calls this quarter, according to an analysis by Bank of America that goes back to 2003. They described things as "better" more often than "worse" or "weaker" at the highest rate in two years.
Other measures of corporate mood turned north since Election Day. The National Federation of Independent Business's index jumped 7.4 points last month to 105.8, the biggest gain since 1980. Fourth-quarter earnings guidance showed signs of life, with the tally of companies raising 2017 forecasts outnumbering those that cut by the most since 2011 at this time of the year.
A logical question is whether improving psychology might lead S&P 500 companies to stop blowing all their cash on buybacks and dividends and start ploughing it back into plants and equipment. Morgan Stanley says it might. An index it compiles tracking the three-month average of capex plans in Federal Reserve surveys climbed in January to hits highest level since 2001.
"Business sentiment surveys have raced higher in the wake of the presidential election while capex plans have inflected higher," economists led by Ellen Zentner wrote. "The increase in capex plans suggests this gain in investment should extend through mid-year."
The Commerce Department's report on the economy in the fourth quarter showed business spending on equipment rose 3.1 per cent for the first gain in five quarters.
Analysts predict expenditures at S&P 500 companies this year will climb to $US76 per share, the highest since 2014, when spending totalled $US78, data compiled by Bloomberg show. Trailing 12-month cap-ex by S&P 500 companies has fallen for two years -- hovering around $72 per share the past six months -- after soaring 61 per cent in the first five years of the bull market.
"Much of the improvement we've seen is in the sentiment indicators, but what we're really looking to see is that coming through in actual corporate activity," Richard Turnill, global chief investment strategist at BlackRock said.
"That's what the market needs to see to move higher."
Inflation is clearly picking up in China, adding to views that Beijing may further tighten monetary policy this year.
Producer prices rose 6.9 per cent in the 12 months through January, near six-year highs as prices of steel and other raw materials extended a torrid rally, adding to views that global manufacturing activity is building momentum.
Consumer inflation rose to near three-year highs, lifting 2.5 per cent, the highest since May 2014 and just above market expectations of a 2.4 per cent rise and following a 2.1 per cent gain in December.
Much of the pick up in consumer prices was likely due to higher food and transportation prices heading into the long Lunar New Year holiday, the National Bureau of Statistics said.
But mounting price pressures in China and many other developed economies have sparked talk of tighter monetary policy this year, after years of super-loose settings aimed at reviving economic growth.
China's central bank raised short-term interest rates in recent weeks as it looks to contain financial risks from an explosive growth in debt.
Producer price inflation accelerated to 6.9 per cent, from December's rise of 5.5 per cent and outpacing expectations of a 6.5 per cent rise.
The producer price index (PPI) rose the fastest since August 2011, driven by a 31.0 per cent increase in mining costs as coal prices rose, the biggest jump in that category since early 2010.
Capital Economics China economist Julian Evans-Pritchard said he expects both consumer and producer prices to peak soon, warning that hopes for a sustained reflation in China will be disappointed.
"The base effects that have boosted inflation in recent months are soon going to go into reverse," he said. "Meanwhile, tighter monetary policy, slowing income growth and cooling property prices should keep broader price pressure contained over the medium-term."
Still, China's massive imports of coal, crude oil, iron ore and industrial materials have helped fuel a sharp rebound in global resources prices in recent months, boosting profits for producers and processors.
And China is again exporting inflation as factories increase prices after emerging from years of deflation.
"There will be a mild reflation throughout this year," said Larry Hu, head of China economics at Macquarie Securities. "Although the PPI may keep rising in the first quarter, this is a relatively healthy inflation, and it probably won't affect the policy stance of the PBoC, which now is clearly focused on cutting financial leverage."
Today's upbeat business survey from NAB has economists pretty excited. Business conditions are "booming", UBS says, and are now in "rate hike territory":
NAB's business survey showed a massive rise in conditions in January to the highest level since before the GFC. This is a key indicator for the outlook. If the spike is sustained over coming months, it would suggest upside risk to the outlook for GDP, inflation and the RBA.
Historically, the NAB survey doesn't tend to provide too many 'false' signals, but we caution extrapolating it given conditions had already been 'average or better' for most of the last 2+ years, yet GDP and underlying inflation still slowed in 2016. Overall, we still see the RBA on hold ahead, but business conditions have now clearly moved into historical 'rate hike territory'.
ANZ's economists say that "businesses have started 2017 with a bang":
This strong result confirms our view that the economy is in fundamentally good shape, and the surprise weakness in Q3 GDP should prove to be only temporary.
The only real downside to an otherwise strong report is the divergence in conditions across industries. Although conditions did improve across most industries in January, some sectors remain soft. The mining sector has seen some recent improvement on the back of stronger commodity prices, but remains weak as investment continues to fall. Meanwhile, the retail sector continues to struggle from heightened competition and squeezed margins.
The business confidence index "exceeded all expectations", and TD Securities wonders if households are feeling as upbeat:
Employment was the standout improvement, at +7 the highest net balance since mid-2011, although we don't yet know the quality of these job opportunities. The RBA watches this survey and will be encouraged by this broad-based improvement. Now for gloomy consumers to keep up (last 97.4, update tomorrow).
Aussie firms are partaking in the "global confidence rally", JP Morgan says:
We suspect at least some of the recent improvement in the business survey is related to the pick-up in business confidence across the developed markets. The close correlation between global business conditions and the NAB survey suggests the fate of the NAB survey is likely to remain closely intertwined with offshore political developments, particularly in the US.
In contrast, there has been little on the domestic front in the past few months to warrant the recorded rise in confidence and conditions. If anything the data argues for a softer tone to the NAB survey given the jobless rate has started to tick higher, a number of retailers have been placed into voluntary administration, the currency remains elevated and Australia's political situation is becoming increasingly fragmented.
While details are limited, the sectoral composition of today's survey supports this view, with confidence readings from key industries such as retail indicating that activity is suppressed and household consumption fragile.
Aus business conditions surging. Labour costs accelerating. Inflation here we come. #RBA pic.twitter.com/5kmUejOtqT
— Felicity Emmett (@felicity_emmett) February 14, 2017
Make of this what you will: The S&P 500 has gone 85 trading days without a decline of at least 1 per cent, the longest such streak since late 2006, and is closing in on the 105-day streak set on Dec 15, 1996, MarketWatch reports, quoting Dow Jones data.
Sam Stovall, chief investment strategist at CFRA Research, said investors may be reaching a point millennials refer to as "fear of missing out" or FOMO. That is when the market may finally be getting to its bubblicious heights.
For now, one consideration is how the market's current valuation stacks up against US gross domestic product. Stovall says that the US stock market valuation as a share of GDP is at its highest level since the data series began in 1989.
How high can stocks go? That is certainly a question no one can answer definitively. But those who have been using options to bet that February would be a period of pain and anguish aren't particularly giddy about this latest upturn.
Of course, things can pivot on a dime.
US Treasury yields, which move in the opposite direction of prices, aren't reflating at the same rate they did after Trump's election, with the 10-year Treasury note hanging around 2.43 per cent.
Gold futures have risen, holding on to $US1200 an ounce, which suggests that there are some investors out there guarding against the worst.
When iron ore stockpiles rise, prices are supposed to fall. But not this time around – the two are now soaring simultaneously thanks to Chinese demand for higher grade product.
That's the theory floated by two Australian exporters in recent days, and helps to explain why iron ore prices have surged to a 30 month high of $US92.23 per tonne overnight.
Rio Tinto chief executive Jean-Sebastien Jacques said the curtailment of small, inefficient steel mills in China was driving demand for the higher grade stuff.
"It is absolutely clear that the Chinese government is pushing hard to restructure the high polluting blast furnaces and therefore reduce capacity but when you look at what would happen, it would remove the low productivity, highly polluting blast furnaces in order to drive the productivity of the best blast furnaces, and in that sense it could be an opportunity for us because we would see a switch from low grade iron ore to higher grade iron ore," he said.
"Currently the utilisation rates across all the blast furnaces is around 70 per cent, but as and when they remove the smaller ones, the high polluting ones, they will push harder on productivity of the other ones...that is where you have got to bring a higher quality of ore."
For the first time in recent memory, Rio has found agreement from US miner Cliffs Natural Resources, which exports about 11 million tonnes of iron ore per year from the Port of Esperance on the south coast of Western Australia.
Cliffs chairman and chief executive Lourenco Goncalves said the drive for higher grade ore was ensuring the low grade iron ore producers were finding it harder to find buyers.
He said that low grade ore was the cause of the large stockpiles at Chinese ports.
AFR Chanticleer columnist Michael Smith writes on Wesfarmers' unlikely new CEO:
Rob Scott was a late favourite for one of the biggest chief executive roles in the country. Despite his status as a former Olympic rower, the new Wesfarmers boss has kept a low profile as he quietly climbed the ranks of Australia's biggest employer.
His appointment as Wesfarmers's eighth chief executive in 103 years in November was well flagged but it surprised many back in August 2015 when he suddenly emerged as a serious contender following a senior management reshuffle.
Scott, a former investment banker, does not have front-line retail experience and he has not presided over the kind of earnings growth than another former candidate John Gillam has.
But that is not necessarily important when your job is to oversee a major conglomerate and all the regulatory, governance and political responsibilities that come with the job. He is seen as a safe pair of hands with the right experience to steer the conglomerate through the next decade.
He will have John Durkan at Coles and Target's Guy Russo on the frontline to deal with the challenges coming in the retail sector from online giants like Amazon and increased competition in supermarkets.
Scott, 47, was promoted to a new role heading Wesfarmers' Industrial Division in August 2015 which gave him responsibility for the group's chemicals, energy and fertilisers and resources operations. The move was clearly setting him up as a candidate for Goyder's job, widening the field from two to three.
Wesfarmers has one of the best chief executive succession plans in the country. Goyder will have spent 12 years in the top job when he departs at the end of the year and past chief executives usually stay on for a decade or more. Wesfarmers has also refused to break with tradition and appoint an outsider as chief executive.
Wesfarmers shares were little changed on the move which had been well flagged. Wesfarmers had been expected to announce the appointment at its half-year results on Wednesday. The timing indicates Wesfarmers may have good news to report or else it would make more sense to bury a bad result with news of the management change.
The stars are aligning for the Australian economy: hot on the heels of the surprise surge in iron ore prices comes news that business conditions unexpectedly jumped.
NAB's monthly index jumped six points in January, from an already strong 10 points to 16, well above the long-term average and indicating very strong levels of business activity.
Meanwhile, business confidence, which had been lagging behind the improvement in conditions over the past months, also posted a stronger result in the month, rising 4 points to +10, following the tone set by financial markets since late last year.
NAB chief economist Alan Oster said recent strength in the monthly survey was consistent with an anticipated rebound in economic activity, following the surprise 0.5 per cent contraction in third-quarter GDP.
"With that said, a confluence of seasonal factors suggests it is unwise to get too carried away with the result just yet, especially as some key industries remain fairly weak," he warned.
Oster reckons that the recent bullishness in financial markets has helped boost local business confidence, and, if sentiment remains at these upbeat levels could lead to companies ramping up their investment and hiring plans.
Among the components of the business conditions index, there was a noticeable jump in employment conditions, indicating a pick-up in the labour market.
"The employment index has now hit its highest level since 2011, having previously been stubbornly muted for some time," Oster said. "This month's jump in employment conditions bodes well for the generally underperforming labour market, and suggests stronger job creation than we have seen from the ABS in their labour force survey lately."
Overall, NAB expects the economy to have bounced back from the 0.5 per cent contraction in the third quarter, as the temporary factors that weighed on the economy wash out.
That echoes the view of the Reserve Bank, which last week in the statement following its decision to keep rates on hold said it expected a "return to reasonable growth" in the fourth quarter.
But unlike the central bank, which remains upbeat about the mid- to long-term prospects for the economy, predicting economic growth of around 3 per cent for the next years, NAB has doubts about the longevity of the recovery.
The bank's economists fear that the contribution of LNG exports, commodity prices that it reckons are only temporarily elevated as well as a fading residential construction boom will keep pressure on the labour market.
Despite the doubts, NAB said that it is reviewing its economic forecasts as well as RBA cash rate predictions - unlike financial markets, which are signalling the RBA is done with easing, NAB currently still has two more cuts pencilled in for this year.
Solid returns from the Kangaroo Island ferry off South Australia along with a lift in passengers boarding a paddlewheel vessel on the Murray River have helped SeaLink Travel Group to post record profits and deliver a higher dividend to shareholders.
SeaLink, which also operates the Captain Cook Cruises business on Sydney Harbour and ferry services in Queensland and the Northern Territory, has been a robust investment for people who bought shares in the float in late 2013, with the shares now more than four times the issue price of $1.10. Today they are down 2.2 per cent at $4.54.
SeaLink managing director Jeff Ellison said that dining cruises were increasingly popular on Sydney Harbour with tourists from Asia, and although there had been a slight slowdown in customers from China this had been offset by a pick-up in demand from Japanese tourists. International tourist demand overall was growing at 11 per cent. He said there had been a rise in "sales and margins for the lunch and dinner cruise market on Sydney Harbour".
Overall, SeaLink generated a 52 per cent rise in net profit after tax for the first half of 2016-17 to $13.1 million. Revenues were up 42 per cent to $106 million.
The company will pay a fully franked final dividend of 6¢ per share on April 14, up from 4.5¢ a year ago.
Lucy Turnbull, the wife of Prime Minister Malcolm Turnbull, resigned as deputy chair of SeaLink in October, 2015 after two years as a director because of the rising number of commitments related to her husband's new role after he ousted Tony Abbott in September, 2015 to become Australia's leader.
A big lift in property values and improving income from office markets in Melbourne and Sydney have delivered one of the country's largest diversified real estate investment trusts a substantial boost in profit.
GPT Group, which lists shopping centres, high-rise city offices and industrial estates in its property portfolio, said it earned $1.153 billion in net profit after tax for 2016.
The result delivered security holders a 5.6 per cent increase per unit to 29.88¢.
Chief executive Bob Johnston said a combination of rising rents and a $612 million revaluation contributed like-for-like income growth of 4.5 per cent across the property portfolio.
But the group said that after two years of strong growth, speciality sales in its shopping centre portfolio were slowing - increasing by just 2.6 per cent.
The retail portfolio as a whole delivered like-for-like income growth of 3.8 per cent over the year.
The slowdown in speciality sales echoes a broader industry trend where top brands are struggling to survive cut-throat competition from fast-fashion international retailers setting up shop in Australia.
This year well-known brands Marcs, David Lawrence, Rhodes & Beckett and Herringbone have been placed in administration, with the latter two brands closing seven stores on Monday.
GPT shares are up 1 per cent at $4.87.
Challenger saw its normalised net profit after tax jump 8 per cent for the half year, helped along by a record $2.2 billion in annuity sales.
The wealth management company has said its normalised net profit after tax was $197 million for the half year to December 31, 2016.
Challenger chief executive Brian Benari attributed its growth to an expansion of distribution relationships and its product offering.
"Our interim results demonstrate strong momentum in both our life and funds management business and our key underlying performance metrics are growing well," he said.
At the same time, Challenger said that its statutory net profit after tax was down 14 per cent to $202 million compared to the previous corresponding period, due to the profit made from the sale of Kapstream Capital in the first half of 2016.
As part of its growth strategy, Challenger also announced a new distribution agreement with BT Financial Group which will see it offer annuities via the BT Panorama platform from first quarter 2018.
It also inked a global bond product partnership with European investment house Standard Life Investments.
These new deals add to the eight existing relationships that Challenger has with companies such as Suncorp and Colonial First State and profit-for-member superannuation funds Local Government Super, Legalsuper and CareSuper.
A deal with AMP to offer Challenger annuities and its CarePlus product on its retail and corporate platforms is expected to launch in first quarter 2018.
Mr Benari said that once the AMP and BT distribution agreements come online, Challenger annuities will be represented on investment and administration platforms used by two-thirds of financial advisers in Australia.
Challenger's total group assets under management were up 12 per cent to $64.7 billion as at 31 December 2016. This growth in AUM delivered an 8 per cent jump in normalised net profit after tax to $197 million.
The company reaffirmed its full-year 2017 cash operating earnings guidance within a range of $620 million to $640 million.
The board declared a 17 cents per share dividend, which represents a six per cent increase.
Challenger shares are 1.6 per cent lower at $11.46.
Shares are predictably higher and the benchmark top 200 measure within a whisker if 5800 points after the overnight action on Wall St boosted banks and the jump in iron ore spurred further gains in the miners.
The ASX 200 is up 31 points or 0.5 per cent at 5792, with investors so far not looking overly impressed with some of the morning's profit results.
A shining exception to that last point is Nick Scali, which has jumped 12 per cent on its earnings numbers. But Treasury Wine is 3.5 per cent lower, while Challenger is down 0.7 per cent and Cochlear -0.3 per cent. GPT Group has added 1.1 per cent.
Miners are doing well, as mentioned. BHP is up 0.8 per cent, Rio 1.9 per cent and Fortescue 0.5 per cent. South32 has climbed 2.9 per cent.
The big four banks are up by between 0.5 and 0.8 per cent, and Macquarie is 0.9 per cent higher.
Dragging on the bourse early is a 2.4 per cent drop in Newcrest Mining as all this optimism weighs on the gold price, while oil producers are also lower following a fall in the price of crude overnight. Aurizon is off 3 per cent on a broker downgrade, and JB Hi-Fi is down 2.3 per cent after a couple of brokers issued moire cautious recommendations on the retailer.
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The sharemarket bull looks unstoppable for now, writes IG strategist Chris Weston:
The focus remains on US equity markets, with the S&P 500 grinding higher yet again amid solid gains in financials, tech and industrial names. And it's certainly positive to see the Russell 2000 join the party with new all-time highs.
Pullbacks in US equities will be bought and this market grinds higher in my opinion and the trade is to be long and trail the stop up when the market moves higher. Perhaps that changes when we get further details on this "phenomenal" tax reform (buy the rumour sell the fact, anyone?), but few want to really be shorting the market with any conviction ahead of the impending announcements.
The other area which has garnered more attention has been the moves in Chinese markets.
The fact we have seen stockpiles of iron ore at Chinese port increase to a new 10-year high of 127 million tonnes (+2.8 per cent on the week) is certainly helpful. But then you also hear that the Chinese Ministry of Environmental Protection has proposed a draft to further cut steel and aluminium producers by as much as 30 per cent in 28 cities across five regions, and this is like a red rag to a bull!
As Rio Tinto CFO Chris Lynch said overnight iron ore prices are not expected to 'fall off a cliff'. If holding a pure play commodity name this is the purple patch. By way of a guide, Cliffs Natural in the US is up 8 per cent.
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