The ASX 200 kicks 39 points higher to 7311 (0.5%) as resource stocks rally hard but a late sell off hurts. Good AGM and business updates fuel a rally. 10-year yields fall back to 1.63% and jobs number comes in as expected. The big miners were all the rage as BHP rallied 0.6% FMG up 2.3% and S32 bought a copper mine in Chile hitting highs up 4.9%. Base metals were also in demand but once again lithium was the highlight with LTR and CXO seriously higher on heavy buying. Gold miners also doing well as bullion rose overnight and held gains in Asia. Higher inflation and lower interest rates, a good combo for gold miners. NCM up 2.4% and NST up 3.3% with PRU up 9.4% on a Yaoure update. Industrials firmed with bond proxies in demand, TCL up 0.2% and REITs finding favour. Healthcare also in the rudest of health led by CSL up 1.0% and RHC rising 1.0%. Tech better, APT up 4.5% on Square dances and the All Tech Index rising 3.1%. Banks were weaker, the big bank basket down slightly to $183.34 %. Insurers and other financials missed out as it was all about risk and growth. In corporate news, NWL went substantially higher 15.6% on FUA rising $4bn in the last quarter, WHC disappointed slightly off 2.1% and led other coal stocks lower, RBL burst down 12.5% as mask sales collapsed. On the economic front, unemployment jumped to 4.6% from 4.5%. Better than expected and Fitch upgraded the local outlook to cloudy with meatballs. Or stable.
- Winners: CXO, NWL, LTR, PRU, INR, HUB, 29M, ASM.
- Losers: ADT, RBL, CRN, YAL, CCX, MYX, CVN
- Positive sectors: Iron ore. Gold miners. Healthcare. Tech..
- Negative sectors: Banks. Insurer. Energy..
- Hi 7359 Lo 7281
- Big Bank Basket: Falls slightly to $183.34(0.8%)
- All-Tech index: Up 3.1% APT up 4.7% Z1P up 4.5%
- Gold: Rallies to AUD2422.
- Bitcoin: Drifts up to US$58031
- Aussie Dollar: Higher at 73.88c 10-YEAR YIELD: Falls back to 1.63%
- Asian Markets: Japan up 1.3% Hong Kong closed. China down 0.3%
- US Futures: Dow futures up 107 NASDAQ futures up 57.
STOCKS ON THE MOVE
- NWL +15.61% gained $4bn in FUM in Sept quarter.
- PRU +9.35% update on Yaoure mine.
- CXO +20.00% technical break higher. Huge volume.
- LTR +13.21% lithium in favour. DFS looms.
- INR +% buyers back for US project.
- MI6 +6.52% recent listing still volatile.
- SRL +13.29% finally moving.
- HCH +10.53% spicy move up.
- BKL +1.10% trouble between board and Marcus Blackmore.
- AXE +9.76% Qubit progress.
- ZNO +26.58% quarterly business update
- ADT -16.52% SFR sell down and cap raise at 280c.
- CRN -6.80% YAL -3.59% coal down.
- ERA -1.14% ardour cools.
- BCB -2.63% coal under pressure.
- KLL -11.36% cap raising weighs.
- RBL -12.50% burst on dwindling masks sales.
- AGL -0.50% continues to slip to two-decade lows.
- Speculative Stock of the Day: Strickland Metals (STK) +23.61% high grade zinc-lead discovery in Earaheeedy Basin.
IN THE NEWS
- Whitehaven Coal (WHC) September quarter managed run-of-mine (ROM) production was up 15% vs year-ago to 5.2mt. Guidance on production, costs and capex unchanged from August. CEO Paul Flynn observed, thermal coal prices were at record highs which he added will translate to significant cash generation over the coming months.
- ARB Corp (ARB) says sales and profit growth are expected to continue for H1. Trading performance remained strong during the quarter with pleasing sales and profit growth despite lockdowns. Order book remains strong, both domestically and internationally.
- Collins Foods (CKF) to acquire nine KFC restaurants in the Netherlands for €10.25m. Last week CKF sets out a framework for the development of up to 130 net new KFC restaurants in the Netherlands over the next 10 years.
- HealthCo Healthcare & Wellness REIT (HCW) to acquire ~ $200m worth of property, lifting the portfolio value by 20%. Upgrades FY22 funds from operations guidance 16% to 5c.
- Orica (ORI) has announced its desire to achieve net zero emissions by 2050 in a plan that broadens its existing ambition to reduce scope one and two greenhouse gas emissions 40% by 2030.
- S32 has announced it will buy the Sierra Gorda copper mine in Chile for $US1.55 billion ($2.1 bn). The deal will be funded through cash on hand an underwritten $US1 billion acquisition debt facility. Sierra Gorda is expected to produce 180kt of copper, 5kt of molybdenum, 54koz of gold and 1.6Moz of silver in 2021.
ECONOMIC NEWS/ BOND MARKETS
- The unemployment rate increased to 4.6% in September. The reading was slightly better than the 4.8-5% some economists had predicted. Hard to read too much into these numbers given the lockdowns in NSW and VIC and recent reopening activity. 138,000 jobs were lost, less than estimates from CBA of 200,000.
- RBA Deputy Guy Debelle has been talking climate change at a conference today. He sounded an alarm on ‘stranded assets’ due to climate change. He cited them as transition risk.
- Another record number of cases in Victoria at 2297 but reopening still happening. Weird really.
- Chinese producer price index climbed 10.7% from a year earlier, the highest since November 1995. The rise in PPI was driven mainly by skyrocketing coal prices and other energy-intensive products
- The consumer price index rose 0.7% last month from a year earlier, lower than a 0.8% gain in the previous month.
- Chinese Pork prices fell 47%. Core CPI, which strips out volatile items such as food and energy, was unchanged at 1.2%.
- The food price index dropped 5.2% from a year ago, slumping for the fourth month.
- Japan has dissolved its Parliament and heading for the polls on Oct 31st.
US AND EUROPEAN NEWS
- European markets opening flat.
- Inflation breaking out everywhere. China the latest although taking out the volatility is not so bad at 1.2%.
- EU scraps most checks on goods heading for Northern Ireland.
- Snap Crackle and Strike at Kellogg’s as workers demand better conditions. Apparently Kellogg’s has been a serial offender.
- US overtakes China as world’s biggest bitcoin miner.
- Vladimir Putin tells CNBC it is not using oil and energy prices as a weapon. It has plenty of real nukes after all.