The ASX 200 rallies another 26 points to 7379 (+0.35%) in a solid if cautious start to the week. Well off highs into the close. Fed meeting beckons and some nerves ahead. Resources punching ahead as iron ore miners in focus, BHP up 2.7% and FMG up 2.0%. Gold miners slightly better and lithium wannabes doing well, AVZ up 17.8% and INR up 17.8% the standouts. Banks mixed as the Big Bank Basket mildly positive at $174.71 (+0.1%). Insurers though took a tumble with an IAG downgrade, down 3.6%, QBE off 3.3% and SUN down 1.1%. Industrials were generally positive, REITs in demand led by GMG up 1.2%and GPT up 2.9%. Healthcare mixed with CSL down 0.4% on acquisition issues and potential capital raising.  Tech stocks mixed with APT down 1.3% and WTC at polar opposites up 1.8%, NXL dropped 4.0%. In corporate news, it looks like BHP is being beaten to Noront, STO listed on the PNGX and OSH is no longer. RMC announced an on-market buyback. RHC down 0.9% following a UK acquisition. Nothing on the economic front.

Major Movers:

  • Winners: AVZ, INR, JLG, RMC, SZL, NWL, LKE, CMM
  • Losers: MYX, FFX, AD8, MNY, ERD, PGH
  • Positive sectors: Iron ore miners. REITs. Energy. Lithium. 
  • Negative sectors: Insurers. BNPL
  • High 7418 Low 7359
  • Big Bank Basket: Slightly higher at $174.71 up 0.1%
  • All-Tech index: Up 0.2%
  • Gold: Steady at $2488
  • Bitcoin: Slightly higher to US$48894
  • Aussie Dollar:  Higher at 71.70
  • 10-Year Yield: Slips to 1.61%
  • Asian Markets: Japan up 0.3% Hong Kong up 1.1% and China up 1.0%
  • US Futures: Dow futures up 122 NASDAQ futures up 56

Futures and Highs and Lows

  • AVZ +17.80% placement success and index inclusion perhaps. Massive volume.
  • INR +17.78% index rebalancing. Huge volume.
  • JLG +16.96% markets cheer US acquisition. Tornado shows way.
  • RMC +10.40% on market share buyback announced.
  • DGL +5.60% kicking again.
  • CIA +5.41% iron ore rally.
  • RNU +4.35% completed LCTs confirm efficiency of HF -Free purification.
  • CHC +5.62% upgrades guidance.
  • GNC +1.65% research update on La Nina lift.
  • STO +1.85% new CFO. Lists on PNGSX.
  • CSL -0.35% confirms interest in Vifor.
  • ORG +1.00% contemplates a $185m Octopus investment.
  • AD8 -6.21% buying Silex Video.
  • FFX -6.62% $100m placement weighs.
  • BRU -11.90% drilling update.
  • FLC -8.82% new chief strategy officer.
  • IAG -3.64% UBS downgrades.
  • EOS -6.25% sinking again. In space no one can hear you scream.
  • Speculative stock of the Day: Laybuy Group (LBY) +23.26% modest buying but good gain.

In the News

  • Johns Lyng Group (JLG) completes placement and entitlement offer raising ~$221m.
  • Brickworks (BWK) sees first-half property EBIT between $290-310m vs $253m in FY21. Expects to complete additional developments at Oakdale Estates and Rochedale in the second half. Has also acquired 121 hectares in South West Sydney; terms undisclosed with settlement to occur in March. Management comments, “The purchase of the land at Bringelly will ensure that our brick operations are not adversely impacted by the release of land for property development.” 
  • Posco to acquire Senex Energy (SXY) for 460c in cash via a scheme of arrangement. Posco lobbed an offer at the start of November. The deal was signed over the weekend. Posco is expected to announce a separate deal with Hancock Energy with Hancock understood to acquire 49.9% of Senex. Senex’s current intention is to pay a dividend of up to 5c for the half-year ending December 31, 2021.
  • Ramsay Health Care (RHC)to acquire Elysium Healthcare from BC Partners for $1.4bn. The acquisition is expected to be completed during Q1 2022 & deliver mid-single-digit EPS accretion in FY23.
  • Crown (CWN) says staff shortages are a significant issue across all three resorts, impacting operational capacity.
  • G8 Education (GEM) Year to date operating EBIT and profit are tracking above consensus estimates.
  • Imugene (IMU) receives FDA investigational drug approval for its VAXINIA and HER-Vaxx therapies.
  • BHP (BHP) and Wyloo unable to reach an agreement on the Noront acquisition. Wyloo has now bid C$110c for Noront which is 47% above BHPs last bid.

Economic News/Bond Markets

  • Clearance rates fell last week as a record number of homes went to auction in Sydney and Melbourne. Corelogic said, “It is possible that the final clearance rate may fall below 60% for the first time since August 2020.” The combination of slowing demand into Christmas, the high number of listings, poor affordability and rising fixed rates weighing. The market is expected to slow further as borrowing costs rise. WBC last week raised its fixed-term mortgage rates for the fourth time in two months. ANZ on Friday lifted its fixed rates for the third time in two months.

CV19 News

  • As Boris Johnson targets ‘Plan C’ with 18m booster shots in 18 days, there have now been 8.45bn doses of vaccine given in 184 countries. That is 42.7m doses a day. 110 shots for every 100 people. One NZ man has taken ten for the team getting injecting 10 times in one day. To be sure to be sure etc.

Asian Markets

  • South Korea will NOT be boycotting the Beijing Winter Olympics. France will not join either. Paris Olympics in 2024.
  • Japan’s biggest manufacturers are less optimistic about the coming months though sentiment at large service companies improved, makers of timber, petroleum and processed metal products were among sectors showing the biggest slumps in optimism.
  • Economists predict China will start adding fiscal stimulus in early 2022. Curbs on the property industry are expected to remain.
  • Evergrande bondholders settle in for the long haul as restructuring begins.

US and European News

  • Hamilton was robbed.
  • Boris in trouble over trivia quiz and announces new booster target. The number of new cases of the strain almost doubled on Sunday from a day earlier.
  • US Democrats pushing Fed to be more aggressive on fighting inflation.
  • Russia demands that NATO takes back its invite to Ukraine and Georgia.

And finally…