Wednesday 23rd June – Australian Market Wrap

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ASX 200 falls another 44 points to 7298 as banks flop lower and Sydney dons masks. Dow futures up 90. The Big Bank Basket fell to $179.92 with insurers and other financials suffering, QBE down 1.0%, IAG down 2.5% and CCP down 1.1%. Industrials were modestly weaker with travel stocks on the nose as NZ and other states impose restrictions on travellers from Sydney. WEB off 2.3%, FLT down 3.5% and QAN slipping 0.2%. Healthcare stocks mixed with CSL easing 2.1% on a Citi downgrade and RMD up 1.7%. WOW down 1.9% ahead of its divorce absolute tomorrow. Tech was better led by BNPL heroes APT up 3.2% and Z1P up 6.4%. In mining stocks, iron ore miners are in the green, BHP up 1.0% and FMG up 0.4% with gold miners mixed, DEG down3.1 % and NST up 1.5%. Base metals and lithium stocks firing as PLS hit highs up 2.8% and IGO up 2.1%. Energy stocks remain under a carbon cloud with STO down 2.4% and WPL off 2.1%. Not much in the way of corporate news, CGC in a trading halt as it looks to raise $190m, ASB fell 2.4% after a new contract, SFG in a halt to raise $105m, CAT to raise US$35m to buy SBG, a video and data company. In economic news, A record $13.3bn merchandise trade surplus was reported in May 2021 and CBA now sees rate rises in November 2022. 10-year bond yields dip to 1.55%. Asian markets steady with Japan flat and China up 0.8%

Today’s Highlights

  • ASX 200 falls 44 to 7298.
  • High 7344 Low 7293.
  • Dow futures up 77
  • Sydney sees more restrictions and closed borders.
  • Big Bank Basket slips to $179.92.
  • All Tech Index rises by 0.65%
  • Australian Gold slips to $2360
  • 10-year yield dip to 1.55%
  • AUD up to 75.51c
  • Bitcoin steady at US$33782 after a dip below US$30000.
  • Asian markets steady with Japan flat and China up 0.8%

MARCUS TODAY TEAM INSIGHTS


END OF DAY PODCAST – ASX 200 down 44 to 7298 as Sydney restrictions increase and the banks take a hit. The Big Bank Basket falling to $179.92. Miners held up well but energy stocks fell again. BNPL winners in Z1P and APT on US Amazon prime Day perhaps. The All Tech Index up 0.65%. European futures are slightly firmer. Dow Futures up 90 points.


MARCUS STRATEGY – Powell has lowered the risk overnight yet again with comments about inflation and interest rates. Our market taking a breather after the 107 point gain yesterday. The NASDAQ hits a record high. Some iron ore upgrades. Today we talk about whether bitcoin is an investment and look at the meaning of a strategic review and how it often means “Opportunity knocks”. READ MORE


HENRY’S TAKE – A look at the coming earthquake in LICs. SOL/MLT merger sets the scene. Plus, the Ausbiz Small Cap Day was fabulous. Plenty of great ideas on ten stocks and a great insight into the fund manager process. The biggest takeaway is how much work funds do off the ball. Like watching Ronaldo, no wonder goals are scored. And one fund manager’s nine commandments (slightly adjusted since Moses). READ MORE


STOCKS

  • SOL +8.46% MLT +5.17% market likes deal.
  • Z1P +6.44% Amazon Prime day effect.
  • PLS +2.76% good drill results keep coming.
  • AEF +4.11% buyers back in control.
  • APT +3.17% becoming a substantial holder.
  • BGL +5.11% positive drill results.
  • CHN +2.97% ceasing to be a substantial shareholder.
  • ADH -10.96% broker downgrade.
  • STK -5.63% profit taking.
  • CTT +3.15% bouncing back.
  • DTL +3.45% waking from slumber.
  • FLN -16.13% Sydney lockdown perhaps.
  • Speculative Stock of the Day: Only a couple on any volume today, Vanadium Resources (VR8) +24.07% Late news last night on the Steelpoortdrift PFS. Potential to be a world class, large scale and low-cost vanadium producer with competitive opex and capex metrics
  • Biggest Winners: SOL, Z1P, PPC, MLT, BGL, BLD and AEF.
  • Biggest Losers: FLN, ADH, RBL, STX, PME, INR and FCL.

TODAY

  • Austal (ASB) -2.39% Awarded US$44.4 U.S. Navy contract modification to previously awarded contract N00024-17-C-2301 to exercise an option for Littoral Combat Ship Class design services and integrated data and product model environment support.
  • Costa Group Holdings (CGC) – Currently in a trading halt as there is a pending capital raising via rights offer. Trading halt to remain until an announcement is released in relation to the completion of the institutional component of the offer or on 28-Jun.
  • Stockland (SGP) -1.46% Estimates second-half distribution for 2021 of 13.3 cps, in line with previous guidance.
  • Catapult Group International (CAT) – Acquires SBG Sports Software Limited for $40-45m ($20m cash and $20-25m in restricted/performance-based shares) and launches capital raise of ~$41m priced at $1.90/share (~13% discount). This will comprise a $35m underwritten institutional placement and a $5 non-underwritten share purchase plan. Two directors of the firm will subscribe for $1.35m of shares.
  • Betmakers Technology Group (BET) -1.69% Acquired the technology platform assets, databases and intellectual property of racing data company Form Cruncher Pty Ltd for $1m cash and performance payment of up to $1m. Has also acquired the technology and intellectual property associated with the Swopstakes for A$635K and performance payment of up to $15m.
  • Woolworths Group (WOW) -1.94% Expects to report $57m pre-tax significant item net gain in FY21 results. Items to be recognised include a Gan on equity interest in Quantium of $220m and Endeavour demerger transaction costs of $69m.

ECONOMIC NEWS

  • CBA see the RBA lifting rates in November 2022 and now forecast the unemployment rate to be 4.5% at the end of 2021 and 4.0% by the end of 2022. The bank expects wages growth to accelerate to 2.4%/yr by the end of 2021 and 2.9%/yr by the end of 2022
  • A record $13.3bn merchandise trade surplus was reported in May 2021, according to preliminary trade data released today by the ABS. ABS Head of International Statistics, Andrew Tomadini said “Iron ore exports continued their strength in May with both values and quantity increasing in the month”.

BOND MARKETS

CV19 NEWS

  • Vaccine Tracker: 2.71bn doses in 180 countries. 41.7m doses a day. Australia 112,591 doses a day. 9 months to herd immunity.
  • Sydney toughens restrictions as new cases appear.
  • Malaysia aims to inoculate 60% of its population by the end of September.
  • The White House acknowledged that the U.S. will likely be a little way short of President Joe Biden’s goal of getting 70% of U.S. adults a first Covid-19 shot by the July 4 holiday.
  • Morgan Stanley is intending to ban non – vaccinated staff from the office.

ASIAN NEWS

  • Japanese Olympics just one month to go. The Tokyo Olympic organizers have dropped plans to sell alcohol at venues.

US AND EUROPEAN HEADLINES

  • European stocks expected to open modestly higher.
  • EU Commission approves another Italian rescue/recovery package for Italy worth around EUR191.5bn.
  • UK begins trade talks to join the CPTPP. Long way away. Raab on a Asian jolly.
  • US House prices driven to record prices with a 23.6% jump YoY.
  • FDA under fire on new Alzheimer drug.
  • Blackstone PE has made a bid for all the houses in the US well all of Home Partners of America anyway. Worth around US%6bn.
  • Bitcoin bounces back hard.
  • Pernod says recovery better than expected and FY profits in line with 2019.
  • Iranian police have seized 7000 crypto mining PCs in a raid. All illegal after ban last month.

And finally…

I’ll never forget my Granddad’s last words to me just before he died. “Are you still holding the ladder?”

It turns out a major new study recently found that humans eat more bananas than monkeys. It’s true. I can’t remember the last time I ate a monkey.

What’s the difference between jelly and jam? You can’t jelly a clown into the tiny car.

“I work with animals,” the guy says to his date.  “That’s so sweet,” she replies. “I love a man who cares about animals. Where do you work?” “I’m a butcher,” he says.

Why was the leper hockey game cancelled? There was a face off in the corner.

Today was a terrible day. My ex got hit by a bus. And I lost my job as a bus driver!

“Just say NO to drugs!” Well, If I’m talking to my drugs, I probably already said yes.

I don’t have a carbon footprint. I just drive everywhere.

It’s important to have a good vocabulary. If I had known the difference between the words ‘antidote’ and ‘anecdote,’ one of my good friends would still be alive.

What’s the last thing to go through a fly’s head as it hits the windshield of a car going 70 mph? Its butt.

An apple a day keeps the doctor away. Or at least it does if you throw it hard enough.

Imagine if you walked into a bar and there was a long line of people waiting to take a swing at you. That’s the punch line.

I have a fish that can breakdance! Only for 20 seconds though, and only once.

Today I decided to go visit my childhood home. I asked the residents if I could come inside because I was feeling nostalgic, but they refused and slammed the door on my face. My parents are the worst.

I have a joke about trickle down economics. But 99% of you will never get it.

Clarence

xxxx