The ASX 200 closed down 42 points to 7382 (0.6%) after US inflation hits 30-year highs and local jobs numbers disappoint. Short-dated bond yields gapped higher, and the AUD fell towards 73c. Banks were under pressure all day with NAB down 1.6% and CBA off 1.6%, with the Big Bank Basket down to $187.58 (0.9%). Other financials eased, MQG down 0.7% and ASX off 0.9%. Fund managers slid again, MFG down 0.9% and PTM plumbing the depths with another 1.4% wiped off. Industrials were hit across the board, healthcare fell led by CSL down 2.4% and SHL down 1.7%. WES fell 1.4%, TCL off 1.8% and REITs slid led by GMG down 0.6%. Tech in a hole as APT fell 2.4% and XRO disappointed falling 6.2% on a business update. The All–Tech Index fell 1.3%. Miners though were back in the green, FMG launched itself 8.2% higher as CEO Elizabeth Gaines pushed the hydrogen story and Twiggy took to Twitter on his Green gas credentials. Iron ore miners rallied hard with BHP up 2.6% and RIO up 1.9% on Dalian futures gains and Chinese property stocks rallying. Gold miners in demand as AUD gold soared. DEG up 7.8%, NST up 4.8% and EVN pushing 5.1% ahead. SBM up 2.8%. Energy stocks slipped as OSH/STO updated the market on the merger both easing over 1-2%. In corporate news, LTR dropped 12.1% on its long awaited DFS and downstream report, CHN though pushed up another 9.6% on broker upgrades. NEA fell 12.3% on its update and XRO off 6.2% as revenue rose but profits still seem elusive. RHC also disappointed with its update, down 4%. 10-year yields back up to 1.79% on the jobs data.

MAJOR MOVERS:

  • Winners: BLX, TUA, NVX, AVZ, FFX, CHN, SWM, FMG.
  • Losers: NEA, LTR, IMM, XRO, SZL, Z1P, PAR, BWX.
  • Positive sectors: Iron ore. Gold miners. Base metal miners.
  • Negative sectors: Banks. Financials. Healthcare, Industrials. Energy. REITs.
  • Hi 7424  Lo 7330.
  • Big Bank Basket: Up to $187.58(0.9%).
  • All-Tech index: Down 1.3% APT down 2.4%
  • Gold: Higher at AUD2531
  • Bitcoin: Lower at US$64610
  • Aussie Dollar:  Lower at 73.02c. 10-YEAR YIELD: Rises to 1.79%
  • Asian Markets: Japan up 0.5% Hong Kong down 0.2% and China up 0.9%.
  • US Futures: Dow futures down 39 NASDAQ futures up 20.

STOCKS ON THE MOVE

  • BHP +2.57% update on recommended offer for Noront.
  • FMG +8.19% hydrogen pumped.
  • NVX +10.53% battery tech winner again.
  • TUA +11.88% rally continuing.
  • AVZ +10.10% an up day today.
  • CHN +9.64% broker comments. Up 50% this week.
  • DEG +7.79% positive drill results.
  • MIN +5.78% iron ore price.
  • FBR +13.46% building a rally brick by brick.
  • PNR +9.30% base metal rises.
  • NEA -12.33% results disappoint.
  • LTR -12.06% investor presentation on DFS.
  • XRO -6.22% good bump in revenue but not falling through.
  • Z1P -5.16% Affirm gets Amazon to itself.
  • RHC -3.99% results disappoint.
  • IMM -7.44% trial results weigh.
  • 360 -4.12% profit taking.
  • OSH -0.94% STO -2.02% merger update.
  • Speculative stock of the Day: King Island (KIS) +25.00% the company has announced confirmation of the redevelopment of Dolphin Tungsten mining on King Island.

IN THE NEWS

  • AusNet Services (AST) first-half profit $177.5m vs year-ago $225.7m. Operating environment described as challenging. Reaffirmed FY22 dividend guidance of 9.5c and expects the Brookfield Scheme will be implemented by February / March 2022.
  • Liontown Resources (LTR) Downstream scoping study highlights next growth horizon for the Kathleen Valley project. The Definitive feasibility study, included an Ore Reserve of 68.5Mt @ 1.34% Li2O and 120ppm Ta2O5 and a Production Inventory of 82.7Mt @ 1.30% Li2O & 117ppm Ta2O5, which underpins a 4Mtpa mining and processing operation over a ~23-year mine life.
  • Xero (XRO) swung to a first-half loss of NZ$5.9m, better than estimates of -NZ$13m. Subscribers 3.01m vs year-ago 2.45m. To acquire LOCATE Inventory for up to US$19m. Brokers are unconvinced, will see how they respond tomorrow. The average target price implies downside of 11.3%.
  • ClearView Wealth (CVW) said it has made a solid start to FY22.
  • Uniti (UWL) upgraded to accumulate from hold at Ord Minnett.
  • Qube (QUB) trading ahead of expectations in Q1 with a positive outlook for FY22.
  • Estia Health (EHE) launches 10% on-market share buy-back.
  • Nine Entertainment Co. (NEC) expects first-half EBITDA ex-items to be up 10% vs a year ago.
  • Ramsay Health Care (RHC) Q1 unaudited profit $58.1, down 39.5% vs year ago. EBIT of $197.4m was down 27.8% over the same period.
  • Bailador (BTI) – NTA Backing Pre-tax 161c. Post-tax 1.42c. This is after the listing of SDR at the IPO price. The investment will be marked to market at the end of every month from now on.
  • Orica (ORI) full-year underlying profit slightly ahead of consensus at $208m. Final dividend 16.5c, takes the full-year payout to 24c, down 9c on FY20. Sees results weighted to the second half of FY22.
  • Breville Group (BRG) reports solid customer demand continues at AGM.
  • GrainCorp (GNC) full-year underlying profit ahead of consensus at $139m. Final dividend of 10c (fully franked) brings total dividends in FY21 to 18c. The board announced an on-market share buy-back of up to $50m, starting in early 2022. Management expects strength from the 2021/22 crop and positive seasonal conditions to have a positive effect on FY23.

ECONOMIC NEWS/ BOND MARKETS

Jobs data – Looks like a big miss on estimates and will give the RBA reasons to continue to be dovish. The numbers are still confusing given the survey period was earlier than usual and of course pandemic issues continue.

The Australian economy lost 46,300 jobs in October, going against market expectations of a 50,000 rise.

  • Unemployment rate increased to 5.2%. 4.8% was the estimate.
  • Participation rate increased to 64.7%.

CV19 NEWS

  • Nicole Kidman is delaying her return to Hong Kong to film the television series “Expats” until mid-February after her “Aquaman” co-star Jason Momoa tested positive for Covid.
  • At least 900,000 U.S. kids aged 5 to 11 have received one shot of Pfizer’s vaccine out of about 28 million in the age group.

ASIAN MARKETS

  • Chinese property developers rose by as much as 5% as shorts were squeezed on hopes property curbs may be relaxed by authorities.
  • China’s overseas purchases of coal nearly doubled in October from a year ago. Imports of nearly 27 million tons were still 18% below the annual high reached in September. Coal imports for the first 10 months of 2021 were less than 2% higher than last year.

US AND EUROPEAN NEWS

  • Elon Musk sells US$1.1bn of Tesla to pay taxes.
  • Rivian will be interesting today. Affirm had a great day after hours on results.
  • Disney disappoints.
  • COP26 coming to an end.

Lest we forget

Clarence

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