The ASX 200 rises 29 points (+0.39%) to 7457 in a solid across the board rally to end the week. US Jobs numbers beckon. 10-yields yield heading back down, now 1.77%. The rally was once again led by the banks with the Big Bank Basket up to $189.99 (+0.4%) despite WBC going ex-dividend, down 2.8%. Other financials joined CBA in the winners’ circle with MQG up 0.2% and ASX up 2.4%. Industrials firm across the board, WOW up 1.4%, COL up 1.3% and TCL rising 0.4%. Healthcare also in favour, CSL up 0.8% and RHC up 1.5%. Miners were in demand as the AUD fell, BHP up 0.2% and FMG rallying 0.6%. Gold miners rose too as bullion headed back to US$1800. NCM up 3.5% and EVN up 4.8%. Energy stocks were becalmed. Tech stocks were skewed by the falling APT price as Square released results in the US and dropped 5.5%. APT down 5.5% and the All–Tech Index down 0.4%. In corporate news, NWS had a great result with the stock rising 6.9%. REA did well up 5.6% on its quarterly results. LNK rose 8.6% on a takeover approach by Carlyle and PNV dropped after the MD resigned. In economic news, the RBA released its SOMP today, bond yields collapsed and Asian markets cautious ahead of US NFP.
- Winners: AVZ, TLG, LNK, NWS, TUA, NST, JIN, BVS.
- Losers: CUV, VUK, ADT, SYA, CVN, APT, CEN, PNV.
- Positive sectors: Banks. Miners. Industrials. Healthcare.
- Negative sectors: Tech. BNPL. Energy.
- High 7478 Low 7424
- ASX 200 up 1.8% for the week
- Oil prices bounce slightly in Asian trade
- Big Bank Basket: up to $189.99 (+0.4%)
- All-Tech index: Down 0.4%. APT down 5.5%
- Gold: Rallies to AUD2427
- Bitcoin: Steady at US$62,176
- Aussie Dollar: Slips to 73.91
- 10-YEAR YIELD: Collapses to 1.77%
- Asian Markets: Japan down 0.81%, Hong Kong down 1% and China up 0.24%
- US Futures: Dow futures down 27. NASDAQ futures up 10
STOCKS ON THE MOVE
- TLG +13.39% anode and advanced battery material stock
- LNK +8.55% bid by Carlyle Asia.
- AVZ +13.98% another day of gains.
- NWS +6.94% good results.
- TUA +6.90% heading back to highs.
- CXO +5.79% CEO sells 500,000 shares.
- AEF +5.31% momentum of ESG theme drives it ever higher.
- EUR +42.31% it’s in the name. European and Lithium.
- PH2 +12.90% hydrogen play/ completes H2X transaction.
- CAE +15.91% rally continues.
- BCB +9.68% coal rebound.
- NWC +10.81% Maiden 7.7Mt High grade mineral resource.
- PNN +16.67% waking up from its slumber.
- LKY +17.65% starting to swing higher. IPO’d at 20c in July.
- APT -5.53% Dorsey explains why he bought APT.
- CUV -12.48% broker downgrades.
- VUK -11.27% UK woes.
- ADT -7.38% lower commodity prices.
- PDN -4.26% profit taking.
- BMT -8.18% thin volume.
- HNR -6.25% lithium battery recycling in Nordic countries.
- WPL -1.78% Greater Pluto reserves.
- Speculative stock of the Day: Marquee Resources (MQR) +45.57% it has entered into an agreement to acquire significant North American lithium and high-grade copper-gold projects. Decent volumes too.
IN THE NEWS
- Woodside Petroleum (WPL) – Released its Greater Pluto Reserves and Resource update. A bit swings and roundabouts with the1P Total reserves increasing by approximately 10% and the 2P Total reserves down by approximately 10%
- Commonwealth Bank (CBA) has hiked fixed rates on home loans by 0.1% to 0.5%. Looks like the second of the majors to raise rates despite no move from the RBA. WBC also raising rates on fixed home loans for owner-occupiers.
- Perenti Global (PRN)- Response to media speculation this morning on a merger with MAH. It confirms it has NOT been a party to any M&A activity discussions. But the market will take the view perhaps that where there is smoke.
- Pendal Group (PDL)full-year underlying profit $165.3m vs consensus $167.7m. Final dividend 24c, bringing total dividends for FY21 to 41.0cps, +11% vs year ago.
- Integral Diagnostics (IDX)year-to-date revenue was down ~7% from budgeted expectations but was up ~4.8% vs year ago. NZ lockdowns weighing heavily.
- News Corp. (NWS) Q1 EPS US$0.23 ex-items vs consensus US$0.13. Management said it was the most profitable quarter of its kind since the re-launch of News Corp in 2013. Revenues for the quarter were US$2.5bn, an increase of 18%, profitability rose an impressive 53%, Dow Jones achieved stronger profitability than any first quarter in its 140-year history.
- REA Group (REA) has reported Q1 core EBITDA of $158m, up 24% from $127m a year ago. Core revenue for the same period, after broker commissions, came in at $264m also up strongly from $196m a year ago. Free cash flow is up 29%, to $49m.
- Bluescope Steel (BSL) has announced this morning that it is acquiring ferrous scrap recycling business MetalX LLC for $240m. It’s a relatively small acquisition for BSL given its ~$10bn market cap.
- Afterpay (APT) – ACCC says no concerns with Square takeover.
- The world’s biggest lithium producer Albemarle is going as fast as it can with production. A new plant in Chile in 2022 and more expansion in WA. Next year. Also looking out for possible acquisitions in Australia, North America and Europe.
ECONOMIC NEWS/ BOND MARKETS
RBA Statement of Monetary Policy
- Expects a rapid economic recovery
- Growth is expected to have contracted 2.5% in the September quarter
- Has lifted 2021 GDP forecast to 3%, 2022 to 5%, 2023 to 2.5%
- Unemployment rate: expected to be slightly below 5% by the end of 2021, falling to 4% by the end of 2023.
- The central bank also expects inflation to slowly pick up over the next two years and capacity comes back online and is absorbed and the economy gathers pace. Trimmed mean inflation is forecast to be 2.25% at the end of 2022, and 2.5% by the end of 2023 – well within the target band. Importantly, the RBA flat out dismissed raising rates next year, based on the current data. This follows a comment earlier in the week from the central bank that inflation being within their target band for the first time in seven years does not warrant raising rates. The base case scenario for rate hikes is 2024, although a move in 2023 is possible if conditions change – Everything pretty much as expected. After the firefighting statement that put the bond market out on Tuesday, there wasn’t much left to say. Just a bit of a tweak to some of the economic detail. Job done this week and you can see it in the market. Up 1.8% after last week’s 1.24% fall.
- Chinese CV19 cases spreading, now 800 in 20 provinces. Next week’s big meeting in focus.
- WA Border will remain closed until early 2022 and 90% of eligible people get vaccinated. NT records its first case of CV19.
- Indonesian GDP slowed in the last quarter rising 3.51% from a year ago down from 7.07% growth in the second quarter.
- A South Korean golf club has banned Japanese cars to ‘honour ancestors’ fight against occupation.
US AND EUROPEAN NEWS
- US NFP tonight. 450k is the magic number. 4.7% unemployment is the headline.
- US Politicians head off tomorrow for their holidays with still nothing agreed.
- OPEC Plus asks crisis what crisis? Not our problem. White House says high oil prices puts recovery at risk.
- NYC’s new Mayor wants to take his pay in Bitcoin.
- Hot upcoming IPO Rivian is sued for ‘unlawful’ firing after former executive complains about toxic culture.
- Google has struck a $1bn ‘cloud’ deal with CME Group.