The ASX 200 just flopped today on lower commodity prices falling 18 points to 7430. To be fair it could have been worse given moves in China on coal and iron ore. Seems most of the damage has been done already, BHP fell 1.7%, FMG up 0.1% on its production report, S32 fell 4.0% on a fall in base metals and ORE dropped 5.9% on its quarterly. Energy stocks predictably eased as crude came off the boil, STO down 1.9% and WPL off 2.5%. Gold miners rose slightly with NCM up 0.8% and EVN up 1.1%. Industrials slipped slightly but AGMs and business updates were the focus. WOW continued lower on broker comments down 1.0%, ALL fell 1.3% and REITs under pressure as bond yields continued to affect valuations. Meanwhile in the banks, solid as a rock. ANZ results beat forecasts and even with a sub -par mortgage business managed a 72c dividend and a 0.7% rise. Success was infectious and spread like the ‘rona, CBA up 0.7% and MQG down 0.7% ahead of numbers tomorrow. Healthcare mixed and tech biased with APT down 2.4%. In other corporate news, BLD rose 4.6% after its AGM comments on US business and capital management. Quarterlies fell thick and fast and nothing thicker than PBH which dropped 18.3% on its update showing gaining market share in the US is an expensive business. BBT rose 15.6% on its quarterly. On the economic front, the RBA declined to step into the short-dated bond market to keep a lid on prices, leading some speculation about the Melbourne Cup meeting next week.2-year and 5-year yields rocketed higher. The game is afoot.

MAJOR MOVERS:

  • Winners: FDV, TUA, RWC, NTO, JIN, ABB, BLD, REH
  • Losers: PBH, WAF, IFL, OMH, BET, SYA, NIC, ORE.
  • Positive sectors: Banks. Plumbing supplies. Gold Miners.
  • Negative sectors: Iron ore. Coal. Oil and gas. REITS. Consumer stocks..
  • Hi 7447 Lo 7405
  • Big Bank Basket: Up slightly to $191.14.1(0.6%)
  • All-Tech index: Down 0.3% APT down 2.4%
  • Gold: Rallies to AUD2397
  • Bitcoin: Falls to US$58894
  • Aussie Dollar:  Slightly lower at 75.06c 10-YEAR YIELD: Better at 1.84%
  • Asian Markets: Japan down 1.0% Hong Kong down 0.1% and China down 0.3%
  • US Futures: Dow futures up 59 NASDAQ futures up 37.

STOCKS ON THE MOVE

  • FDV +10.30% positive quarterly.
  • LKE +3.49% nice bounce.
  • NVX +3.65% bargain hunters back.
  • ABB +4.88% AGM Presentations.
  • JIN +5.02% AGM presentations.
  • BLD +4.59% AGM presentations and US plans.
  • EMV +3.17% good quarterly report.
  • BBT +15.61% Sullo kicks some goals.
  • PAR +3.71% quarterly update.
  • PBH -18.28% in the Shaq after big spend in US to gain market share.
  • IFL -8.50% funds drift off.
  • WHC -4.95% coal price falls.
  • BET -6.10% follows PBH lower.
  • CDA -5.84% broker downgrades after numbers fail to excite.
  • PLS –4.07% increased spodumeme production.
  • ORE -5.94% quarterly report.
  • NIC -5.96% quarterly report and commodity prices.
  • RHI -16.88% ex dividend 120c.
  • PEK -7.89% BFS update and target production.
  • DTC -15.76% annual report.
  • BOQ -2.61% completes sale of St Andrews Insurance.
  • MNS -% quarterly report.
  • Speculative stock of the Day: Invion (IVX) +138.46% announcement of complete regression of TNBC Tumours and protective immunity. Huge volume. Could keep kicking too.

IN THE NEWS

  • ANZ Bank (ANZ)- Full-year cash profit (continuing operations) $6.20bn vs consensus $6.12bn. The result was supported by the partial reversal of Covid-related provisions. ROE 9.9% vs year-ago 6.2% and consensus 9.68%. Dividend 72c vs consensus 70.2c, more than double FY20. NIM of 1.65% was ahead of consensus of 1.63%. Management said it is making good progress in the multi-year transformation. Its New Zealand segment is expected to continue to deliver robust returns and maintain its strong market position. The institutional segment is understood to be a better-balanced, more predictable, and higher returning business. On the ESG front, added it was on track to provide $50bn worth of sustainable finance solutions by 2025. On the other side of the equation, said home loan volumes in the second half were hit by a competitive refinancing market and customers paying down their loans faster.
  • Orocobre (ORE) notes very strong demand for spodumene in its Q1 activities update. Production numbers were posted last Friday. The lithium carbonate sales price has increased by over 200% in the last year and guidance for the December quarter has been revised upwards to ~US$12,000/tonne (free on board).
  • Superloop (SLC) expects FY22 underlying EBITDA to be between $23-$25m.
  • Fortescue (FMG) Q1 total ore shipped 45.6m (wmt) vs year-ago 44.3m (wmt). Guidance for FY22 shipments, C1 cost and capital expenditure remains unchanged.
  • JB Hi-Fi (JBH) see heightened demand and strong sales growth rates over a two-year period. Reopening momentum helping.
  • Australian Pharmaceutical Industries (API) full-year underlying EBIT of $70.1m was ahead of guidance and consensus.
  • Boral (BLD) intends to divest its North American fly ash business, planning $3bn capital return. Added a return to construction work in all states may see improvement in infrastructure activity in the second half of FY2022, particularly road construction.
  • Syrah Resources (SYR) Q3 natural graphite sales of 18kt vs guidance of 17kt.
  • Coles (COL) Q1 sales $9.76bn vs year-ago $9.61bn. In the first four weeks of Q2, Supermarkets comparable sales were broadly in-line with Q1 and ~8% higher on a two-year basis. In Express, current fuel volumes are impacting profitability, however, volumes are expected to recover in H2 of FY22 as consumer behaviours normalise and mobility increases.
  • PointsBet (PBH) Q1 turnover of $979.9m vs year-ago $691.9m.
  • Recce (REH) – sales up soared 13.2% to $1.8bn in the September quarter, driven by growth of nearly a fifth across the US business. ANZAC sales rose only 9%.
  • Pilbara Minerals (PLS) – increased production of spodumene concentrate by 11% in the September quarter. PLS produced 85,700 dry metric tonnes of the concentrate and shipped 91,500 dry metric tonnes during the period

ECONOMIC NEWS/ BOND MARKETS

  • The rate on the April 2024 notes more than doubled, jumping as much as 30 basis points to 0.50%. RBA passes on buying short-dated bonds signalling maybe a change of rhetoric with meeting next week now very important.
  • CBA now sees the economy expanding 3.5% this year, versus a previous 3% and a rate rise now in Q32022. It expects the RBA will wind down its bond-buying from February to May next year and could end its three-year yield target as early as next week. Now expecting a 25bps rise in December 2022 and three more in 23/24.

CV19 NEWS

  • Queensland’s new Chief Health Officer has resigned before even taking up the job .
  • China reported 23 new local confirmed Covid-19 infections on Oct. 27 in Gansu, Inner Mongolia, Beijing, Ningxia, Heilongjiang, Shandong and Sichuan, the National Health Commission said in a statement.

ASIAN MARKETS

  • Coal futures in China extended a plunge by another near 10% bringing recent falls to around 40% from highs.
  • Iron ore on Dalian Futures exchange fall 5% plus.
  • Popeye not happy as spinach prices soar 157% in China. Cauliflower and broccoli costs about 50% more. China’s egg futures hitting the highest level since July and live hog prices climbing more than 25% this month.
  • New Japanese PM backs 2% inflation target. Jousting stocks?

US AND EUROPEAN NEWS

  • European markets opening weaker ahead of ECB meeting. Copy and paste job in store.
  • Aibus results out with 424 planes delievered so far this year. 600 is the target. 9-month revenue EUR35.2bn.
  • UK Budget promises more spending on the usual subjects. No tax increase but cuts.
  • Brazil may not be a direct comparison, but it too is a resource economy. Benchmark rate reaches 7.75%, as expected by most economists.
  • Activist fund calls for break-up of Royal Dutch Shell. Easy as. Royal. Dutch. Shell.
  • Democrats proposed tax on billionaires has collapsed as they cannot agree on details.
  • US General says Chinese hypersonic test close to ‘Sputnik moment’.
  • Bank of Canada to move earlier on rates.
  • Could be a long winter in Europe as even Gazprom has low gas levels in storage.

And finally….

Today I saw a dwarf climbing down a prison wall.
I thought to myself
That’s a little condescending

Had I known in March
that it was the last time I would be in a restaurant
I would have ordered the dessert.

Clarence

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