The ASX 200 dropped 51 points to 7370 (-0.7%) after CBA results disappointed on margins and growth. Late rally helping matters. CBA fell 8.1% accounting for 46 index points of the fall. The Big Bank Basket fell sharply on the CBA September update falling to $178.11 (-5.3%). Other financials weathered the storm well, MQG down up 0.6% and MFG ahead by 1.6%. Insurers also rallied with QBE leading the charge up 1.7%. Industrials were mixed with healthcare finding some buyers, CSL up 0.5% and RMD snoring ahead by 2.6%. REITs better with GMG up another 0.7% and TPG rose 2.2%. Miners eased back as BHP lost 1.5% and FMG down 1.9%. Gold miners under pressure, NCM down 2.1% and high-flyers like CHN saw profit taking, off 4.6%. Energy stocks becalmed. In the tech space, good gains for APT up 2.1% as it put its merger case to shareholders and WTC rose 3.0% with the All Tech Index up 1.1%. In corporate news, UMG down 1.7%, full-year profit $34m vs guidance of $36.0-41m, NUF lost 8.6% after FY profits came in lower than expectations at $61.1m. UWL rose 8.3% on buy back, update and positive news flow. CCX seeing strong revenue growth up 5.6% and SEK upgraded expectation to the top of the range, falling 1.3% though. In economic news, Overall wages lifted 0.6% in the September quarter and 2.2% over the year. 10-year yields rose again to 1.84%
- Winners: UWL, ABB, SZL, NIC, CCX, MYX, SIG, AAC
- Losers: MNS, IMU, NUF, CBA, HPG, MAF, CRN, CTT.
- Positive sectors: Tech. REITs. Healthcare.
- Negative sectors: Banks. Miners.
- Hi 7431 Lo 7343.
- Big Bank Basket: Lower at $178.11 (-5.3%). Big four accounting for 58 negative index points.
- All-Tech index: Up 1.1% APT Up 2.1%
- Gold: Higher at AUD2546
- Bitcoin: Smacked to US$59239
- Aussie Dollar: Slips to 72.78c. 10-YEAR YIELD: Rallies to 1.84%.
- Asian Markets: Japan down 0.4% Hong Kong down 0.5% and China down 0.1%.
- US Futures: Dow futures up 12 NASDAQ futures down 5.
STOCKS ON THE MOVE
- ABB +7.33% firm favourite.
- UWL +8.29% good update and buy back.
- AAC +4.94% beef prices heading higher.
- CCX +5.57% fund manager push in time for Xmas.
- NIC +5.96% Angel Nickel project well ahead of schedule.
- APE +4.41% forecast for next 12 months.
- EML +3.56% AGM presentation.
- BYE +7.69% bit of volume too.
- MMM +10.37% bargain hunters.
- GAL +26.83% massive sulphides in Norseman.
- FNP +5.88% capital management update.
- SWM -3.01% upgrades guidance.
- SEK -1.29% updates guidance to upper end of $450m range.
- PLY -unchanged- big range and capital raising.
- MNY +3.74% guidance upgrade.
- CBA -8.07% margins squeezed as mortgage lending gets competitive.
- CTT -4.63% sellers taking profits.
- MNS -19.40% response to media reports.
- NUF -8.57% results disappoint.
- DEV -9.43% profit taking.
- LMG -14.29% consolidating after recent gains.
- ACW -11.11% profit taking.
- NEA -0.86% court denies motion to dismiss claims by Eagleview Tech.
- HCH -2.22% 1for 50 consolidation.
- IPO of the Day: Lycaon Resources (LYN) +182.50%. Gold- Silver project in the Kimberley. Close to Julimar project too.
- Speculative stock of the Day: Range Resources (RAN) +41.18% increasing volume and interest. Mentioned in newsletter back on October 1st. Copped a speeding ticket late. Quoted the ‘Schultz’ defence.
IN THE NEWS
- Uniti Group (UWL) on track to meet or exceed consensus for FY22.
- SEEK (SEK) says FY22 results are expected to be at the upper end of guidance ranges. Points to strong year to date ad volumes in Australia, Hong Kong, Singapore and Malaysia.
- EML Payments (EML) Q1 underlying EBITDA $11.2m, +11% vs a year ago.
- City Chic (CCX) observes strong revenue growth and sales growth so far in FY22 at AGM.
- Janus Henderson (JHG) holder Trian proposes changes to the composition of the board.
- ALS (ALQ) first-half underlying profit $127.1m vs guidance $115-125m and year-ago $80.6m. Interim dividend of 15.8c, partially franked to 30%. Will not renew the share buy-back program citing superior growth opportunities.
- Nufarm (NUF) full-year underlying profit $61.1m vs consensus $72.1m. Final dividend 4c, unfranked. Expects increased CAPEX.
- Link (LNK) to give Pepper European Servicing access to due diligence in relation to Link’s Banking and Credit Management business.
- United Malt Group (UMG) full-year profit $34m vs guidance of $36.0-41m. Larger markets returning to pre-COVID conditions, with volume expected to approach FY19 levels. Anticipates a cost impact of $8-12m in FY22 for additional supply chain costs from importing barley.
- Commonwealth Bank (CBA) quarterly trading update – Net interest margin was considerably lower in the quarter which isn’t likely to please the market. Higher liquid asset balances, home loan competition, lower margin fixed-rate loans and a low-interest-rate environment the culprits. First-quarter cash profit of $2.2bn, the result lower than the second half 2021 average. Operating expenses were 1% lower with fewer remediation costs although staff costs were higher. Non-interest income was hit 8% with the divestment of Aussie home loans. Management added it was seeing above system volume growth in its core markets.
ECONOMIC NEWS – BOND MARKETS
- White-collar jobs are leading the charge on wages growth, with salaries up 3.4%. Overall wages lifted 0.6% in the September quarter and 2.2% over the year. Public sector wages increased 0.5%.
- China told its state-owned enterprises to stop cryptocurrency mining and said it’s considering punitive measures
US AND EUROPEAN NEWS
- A German regulator has suspended its certification of Nord Stream 2, an undersea pipeline intended to transport natural gas directly from Russia to Germany that has been the source of a long-running dispute between Berlin, Washington and Brussels. The recently completed pipeline will not begin supplying gas to Germany any time soon. Its going to be a long winter in Europe.
- Biden told reporters on Tuesday to expect the announcement of a nominee for Fed chair in “the next four days.”
- Elon Musk sold Tesla stock for a seventh consecutive trading day as he looks to be near a Bon Jovi. ‘Halfway there’.
- UBS Chair Axel Weber said the world may see “uncomfortably high” rates of inflation for one to three years, and DBS Group CEO said inflation is getting a lot more ‘structural’ at a conference in Singapore.
- Bill Gross warns investors not to be lulled into ‘dreamland’ by central banks.
- Rivian is now a bigger company than VW. Less than 100 cars produced so far.
- Netflix now giving out viewer numbers for its big hit shows.