The ASX fell and gathered itself post the RBA announcement with the index closing down only 30 points at 7248 (0.4%). Seems the RBA is not for turning and that helped sentiment. Losses across the board but manageable. Banks weakened with the exception of CBA which rose 0.3% after its buy back result last week. The Big Bank Basket steady at $186.92. MFG slipped hard down 3.7% with PNI following suit down 3.3%. Miners were mixed, golds firmed, GOR up 7.2%, SBM up 5.2% and SLR up 5.7%. Iron ore miners drifted lower, BHP down 1.1%, FMG off 1.3%. Industrials eased in places, healthcare down, CSL off 0.2% and RMD falling another 2.9%. Energy was a bright spot, WPL up 4.0% and STO up 2.5%, KAR rose 3.1% and BPT up 0.7%. Travel stocks were mixed FLT up 2.0% and WEB off 0.6% with QAN down 1.2%. In the tech space, profit taking was the order of the day, APT fell 5.0% to its lowest level since Square deal announced, 2021 gains in the sector are now gone. APX hit a three-year low down 5% and the All-Tech Index was down 2.6%. In corporate news, QAN is on the verge of a huge fleet renewal order. RBA keeps rates unchanged, and timetable remains the same. 10-year yields rise to 1.51%.
- Winners: OMH, DEG, GOR, RBL, WAF, SLR, SBM.
- Losers: DUB, KED, NVX, SYA, VUL, PPK, SZL, MGX.
- Positive sectors: Energy. Gold Miners.
- Negative sectors: Tech. Iron ore miners. REITs.
- High 7270 Low 7203.
- Big Bank Basket: Steady at $186.92.
- All-Tech index: Down 2.6%, APT down 5.0%.
- Gold: Drifts to AUD2425.
- Bitcoin: Rallies hard to US$49202.
- Aussie Dollar: Rallies on RBA news to 72.65c.
- 10-YEAR YIELD: Higher at 1.51%.
- Asian Markets: Japan down 1.60% Hong Kong up 0.17%. China closed.
- US Futures: Dow futures up 16 off lows. NASDAQ futures up 30.
STOCKS ON THE MOVE
- DEG +9.84% Mallina scoping study.
- GOR +7.23% WAF +6.34% SLR +5.67% SBM +5.19% second liners rising.
- RED +4.55% KOTH mine development contract awarded.
- TIG +21.74% Mongolian coal play.
- PDI +13.04% Investor update.
- IXU +16.67% enters US online gaming world.
- SMR +15.79% coal price rises.
- SZL -7.94% BNPL under pressure on Square share sell off.
- PPK -8.24% JV with Sun Metals to develop protective coatings.
- VUL -8.29% SYA -8.82% INR -7.20% lithium and battery stocks depressed.
- RF1 -4.28% premium comes back to earth.
- AT1 -11.76% renegotiates contract with Access Bio.
- DYL -7.07% uranium stocks under pressure.
- KLL +14.63% first shipment of sulphate of potash.
- BGA +1.32% rumours of interest in Fonterra.
- WOR +1.11% WPL gas project win.
- EVN +2.49% sells Mt Carlton mine for $90m.
- SOL/MLT +1.17% merger completed.
- Speculative Stock of the Day: Nothing on any volume.
IN THE NEWS
- Kalium Lakes (KLL) – Trading halt awaiting an update on Beyondie milestones. The Beyondie Sulphate of Potash Project has produced its first batch of Sulphate of Potash during the product commissioning process. Product commissioning will continue until EBTEC completes its performance test – Scheduled commercial production ramp-up remains on track.
- Washington Soul Pattinson (SOL) – Merger complete with MLT.
- Evolution Mining (EVN) has entered into a binding agreement with Navarre Minerals (NML) to sell Mt Carlton gold mine for up to $90 m. Evolution Mining will retain upside exposure to Mt Carlton through a 19.9% holding in Navarre Minerals.
- IXUP Technology (IXU) – the company has entered the US online gaming and sports betting markets with a pilot collaboration with Conscious Gaming and GeoComply Solutions. Key focus is development of the next generation of online betting and impermissible bettor exclusion product.
ECONOMIC NEWS/ BOND MARKETS
- Dominic Perrottet new Premier of NSW.
- RBA policy unchanged – The board will continue to purchase government securities at the rate of $4 billion a week until at least mid-February 2022. In its central scenario, the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year. Noted while disruptions to global supply chains are affecting the prices of some goods, the impact of this on the overall rate of inflation remains limited. Observes credit growth driven by property demand is being looked at by the Council of Financial Regulators.
- September new vehicle sales of 83,312, +21% vs year ago according to FSCI. Federal Chamber of Automotive Industries Chief Executive Tony Weber said that the global microprocessor shortage, compounded by local COVID restrictions, was continuing to impact demand across Australia. The highest selling model was the Ford Ranger which recorded sales of 4,192. This was followed by the Toyota Hilux with 3,635 vehicles sold and the Toyota Corolla with 3,487.
- ANZ Job Ads for September fell 2.8% to 189,272 available positions to be up 60.8% on a year ago. Lockdowns weighing on the release.
- Trade balance for August increased $2,427m to a surplus of $15,077m in August. Exports +4% and imports -1%.
- Consumer confidence rose 0.9%, marking the fourth consecutive week of gains. Inflation expectations remain elevated at pandemic highs.
- Conspiracy theorists are having a field day with this news, PPE equipment purchases shot higher before the Chinese authorities were notified the rest of the world of the CV19 outbreak.
- ScoMo said international tourists will not be welcome until 2022. Australians returning, skilled migrants and international students are the priority.
- Victoria set a new CV19 case record today with 1763 cases and 4 deaths.
- Chinese markets closed for a week. Golden Week holiday.
- Philippine inflation cools – CPI for September eases to 4.8%, vs estimate for 5.1% increase.
- China is stepping up fighter patrols over Taiwan. Slightly worrying but given China believes that Taiwan is part of China, it thinks it is doing nothing wrong.
- China is starting to unload Australian coal despite bans.
US AND EUROPEAN NEWS
- Facebook back online thankfully. What did we do without it?
- Oil hits 7-year high after OPEC plus keeps production tight.
- Citadel Securities would be happy to end payments for order flow. He reckons it will cut costs. Robinhood may have an issue with it though. That is the whole Robinhood model, no bro, just sell the orders.
- Government watchdog has launched an investigation into trades by Fed Officials.