The ASX closes down 42 points to 7207 (0.6%) after a solid start gave way to banking and interest rate jitters. Whether it was APRA moves on local lending or the RBNZ decision to jack up rates, the market turned from solid but uninspiring to just uninspiring. 10-year yields leapt to 1.59%. Banks led the turnaround with the Big Bank Basket falling back to $184.15 (1.5%). CBA fell 2.0% on a broker downgrade. MQG also succumbed off 0.4% and MFG dropped 4.1% on another disappointing FUM number. Industrials eased back, WES fell 1.3%, ALL down 1.0%, TCL off 1.0% and WOW falling 0.5%. Tech was unchanged with APT following square higher by 3% although that may change tonight. The All–Tech Index unchanged, WTC down 3.6% and XRO off 0.7%. Travel stocks slid with FLT off 6.6%  and WEB down 6.2% Miners were pressured but nothing dramatic, energy stocks paused for breath with STO up 2.3%. On the economic front all eyes across the ditch as the RBNZ raised rates. Signalled more to come to fight inflation. In corporate news, A2M fell 7.7% on a class action launched by Slater and Gordon, SWP announced it would acquire Newcastle based telco. US futures eased ahead of crucial debt vote tonight.

HEADLINES

  • Winners: YAL, JRV, ASM, SWM, MGH, STX, ERA.
  • Losers: A2M, FLT, WEB, KED, PNV, KGN, SOL.
  • Positive sectors: Energy. Tech just.
  • Negative sectors: Banks. Financials. Consumer stocks.
  • Hi 7279 Lo 7184
  • Big Bank Basket: Steady at $184.15 (1.5%)
  • All-Tech index:  Unchanged APT up 3.0%
  • Gold: Drifts to AUD2415.
  • Bitcoin: Rallies hard to US$51503.
  • Aussie Dollar: Steady on RBNZ news at 72.63c 10-YEAR YIELD: Higher at 1.59%
  • Asian Markets: Japan flat, Hong Kong down 0.59%. China closed.
  • US Futures: Dow futures down 108. NASDAQ futures down 73.

STOCKS ON THE MOVE

  • ARX +13.43% delivers strong half. Business update.
  • WBT +12.75% announcement due.
  • DUB +2.60% tech bounce.
  • BBN +4.42% AGM presentation.
  • YAL +8.99% coal is the word.
  • VHT +4.41% largest sales quarter to date.
  • DEG +4.72% resource upgrade cheers.
  • PLS -0.27% beats quarterly shipping guidance.
  • WHC +4.06% highest level in two years.
  • AXE -5.54% slips below placement price.
  • PDI -9.62% profit taking.
  • KLL -10.64% profit taking.
  • MMM -6.55% fails to deliver.
  • CBA -1.97% broker downgrades and APRA moves.
  • ABB -1.22% doubles SPP to $20m
  • RF1 – Trading halt $212m entitlement issue and placement.
  • MFG -4.10% says it is client rebalancing. FUM drops again.
  • NXL -2.34% board appointments.
  • A2M -7.67% Slater and Gordon launch class action.
  • FLT -6.63% WEB -6.19% travel stocks unwind.
  • SOL -5.34% MLT wash up.
  • KED -6.04% slide continues.
  • KGN -5.67% enthusiasm continues to wane.
  • VG1 -3.81% big 15% discount.
  • Speculative Stock of the Day: A blast from previous SSOTD Red Dirt Metals (RDT) +25.19% good volume. Mt Idea lithium prospect continues to draw buyers. Trading halt announced at close.

IN THE NEWS

  • Magellan Financial Group (MFG) –Retail FUM down 4.9% in September and Institutional FUM down 3.6%. It blames it on portfolio re-balancing by three major clients and 23% redemptions on the retail side.
  • Slater and Gordon file class action against a2 Milk Co. (A2M). The filing refers to deceptive conduct regarding downgrades posted throughout last year. A2 stands behind its compliance procedures and said it will defend the claim.
  • Pilbara Minerals (PLS) – produced 85,759 dry metric tonnes (dmt) of spodumene concentrate in the quarter, up from 77,162 dmt in the June quarter. This led to spodumene concentrate shipments of 91,549 dmt, exceeding prior guidance of 77,000-90,000 dmt. Its cash balance has now increased to $137.3m.

ECONOMIC NEWS/ BOND MARKETS

  • RBNZ raises rates for the first time in seven years. It also says further rate rises are needed to curb inflation.
  • APRA moves to ‘tap the brakes’ on home lending. It has told banks to lift buffers from 2.5% to 3%. No sign of borrowing to lending ratios being capped as yet though.
  • Job advertisements are 22% higher than January 2020 before the pandemic. Job ad numbers fell 2.8 in September compared to August. Most of the job losses have been in New South Wales with Victoria close behind although the official employment numbers have hidden the number of people working zero hours because they are not counting anybody on support payments. Job vacancies are down 9.8% quarter on quarter in August.

CV19 NEWS

  • Victoria records 1420 new COVID cases, 11 deaths. Four students who sat GAT in Melbourne test positive for COVID-19. 80% of Australians aged 16 and over have had one dose of a coronavirus vaccine.
  • This is scary. In the US Daily infections are still hovering around 100,000 with 1800 people dying every day on average. The current casualty count is now 703,000. The toll for 2021 is now higher than 2020.

ASIAN MARKETS

  • HK Premier Carrie Lam gives last speech of her term.
  • U.S. President Joe Biden said he and China’s Xi Jinping have reaffirmed their agreement on Taiwan. Envoys to meet in Zurich in coming months.
  • New Japanese PM Kishida has suggested a new levy (so don’t buy buy) on capital gains.
  • Another mid-sized Chinese developer has defaulted. Fantasia misses payment.

US AND EUROPEAN NEWS

  • European markets set to open around 0.5% lower.
  • Cathie Wood has sold most of her Nintendo stock before the OLEDlaunch.
  • Senate to vote on debt ceiling today. Yellen warns of October 18th Deadline. 1987?
  • FB Whistle blower Frances Haugen reignites support for curbs on big tech. Haugen says FB chose to maximise engagement at users’ expense.
  • To be truly ethical you have to walk a mile in someone’s shoes, not Allbirds though which has walked back some of its ESG claims ahead of the IPO.
  • Record gas prices in Europe continue and it’s not even winter.
  • Ireland looks close to accepting revised global corporate tax deal.
  • Google’s AI business called DeepMind has made a profit. Just needs to work out now what to do with it.

And finally,

Interviewer: “What’s your greatest weakness?”
Candidate: “Honesty.”
Interviewer: “I don’t think honesty is a weakness.”
Candidate: “I don’t give a stuff what you think.”

A worldwide survey was conducted by the UN. The only question asked was: “Would you please give your honest opinion about solutions to the food shortage in the rest of the world?” The survey was a huge failure. In Africa they didn’t know what “food” meant. In Eastern Europe they didn’t know what “honest” meant. In Western Europe they didn’t know what “shortage” meant. In China they didn’t know what “opinion” meant. In the Middle East they didn’t know what “solution” meant. In South America they didn’t know what “please” meant. And in the USA they didn’t know what “the rest of the world” meant.

Q: Whats the difference between a politician and a snail?
A: One is slimy, a pest, and leaves a trail everywhere and the other is a snail.

Clarence

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