The ASX 200 claws it’s way back into positive territory briefly but closed down 1 point to 7378. Early broad-based losses were not helped by negative US leads and were compounded by WOW news. Both WOW and COL down substantially with 14 index points knocked off on these two alone. WOW dropped 7.7%, COL down 2.7% as Covid came to town. WES fell in sympathy dropping 2.3% but MTS shrugged off pressures up 0.7%, EDV down 3.4%. Industrials were mixed, CSL in a trading halt as it firms up a huge $6.3bn capital raise and acquisition. Instos digging deep to fund this international expansion. Tech patchy, APT dropped 4.1% as Block dropped in US, WTC perked up 3.6% and the All–Tech Index fell slightly. Banks and financials were better. The Big Bank Basket fell to $174.41 with CBA weighing, Insurers picked up as bond yields dropped (go figure) and MQG up 0.8% with MFG finding some buyers up 1.4%. Bond proxy stocks rallied hard TCL up 0.8% and REITs doing well. GMG up another 2.0%. Meanwhile, iron ore miners pushed ahead with BHP up 0.6% and FMG up 1.3% with gold miners steady and energy stocks down slightly, WPL down 0.2% and STO off 1.1%. Lithium stocks continue to rally with PLS up 1.9% and AKE up 1.1%. In corporate news, BGH bid 710c for VRT with the stock up 34.6%. MSB disappointed as per SOP with Novartis pulling the plug, falling 17.4%. WOW down 7.7% on its CV19 issues, PNV rallied 15.4% on better US sales. Bond yields tumbled to 1.53%, so much for worries about interest rates and inflation. Safe haven sucking in money into bonds.
Late breaking CSL announces huge acquisition and placement. See below.
- Winners: PNV, CTT, AEF, NTO, BKL, PWH, 29M, CHC, UMG
- Losers: MSB, PDN, WOW, IMU, LKE, UNI, BOE
- Positive sectors: Iron ore miners. REITs. Financials
- Negative sectors: Consumer stocks
- High 7393 Low 7341. Narrow range again. Caution ahead of Fed
- Big Bank Basket: Slightly lower at $174.41 down 0.2%
- All-Tech index: Slightly lower.
- Gold: Rallies to $2516.
- Bitcoin: Slightly lower again to US$46989
- Aussie Dollar: Falls to 71.02c
- 10-Year Yield: Slips to 1.53%.
- Asian Markets: Japan down 0.3% Hong Kong down 1.2% and China down 0.3%
- US Futures: Dow futures up 38 NASDAQ futures up 15
STOCKS ON THE MOVE
- NEA +4.76% US ACV now bigger than ANZAC.
- PNV +15.44% sales double.
- AEF +8.80% ethical investor winner.
- NTO +8.27% change of director’s interest.
- CXO +3.81% lithium producer next year.
- VRT +34.55% BGH bids 710c.
- 3DP +17.39% Material contract award.
- MVF +6.38% VRT moves attracts buyers.
- RNU +4.17% kick continues.
- ASM +3.59% cooperation on critical metals with KOMIR.
- KGN+0.12% sold its domain name Bitbuy for $1.5m to Canadian namesake.
- CDD -54.42% ex capital return and dividend.
- PDN -10.30% BOE -5.15% uranium story fades.
- IMU -6.73% HER-Vaxx patent allowed in China.
- AJM -76.25% returns from suspension.
- MMM -7.06% skipping meals.
- MSB -17.35% Novartis cuts ties.
- WOW -7.674.08% catches CV19.
- APT -4.08% Block gets nod.
- CSL -Trading halt – acquisition of Vifor and capital raising. Announced after the close.
- LCY -11.11% Yilgani gold project continues to grow.
- Speculative stock of the Day: New float The Hydration (HPC) +22.41%. US company begins trading on ASX.
IN THE NEWS
- CSL– Huge deal to buy Vifor Pharma for consideration of US$12.3bn / A$17.2bn funded via US$4.5bn / A$6.3bn underwritten Placement US$6.0bn / A$8.4bn new debt and existing cash / undrawn facilities.
- Janus Henderson Group (JHG) holder Trian discloses purchase of 1.95m shares. Multi-billion dollar asset manager, Trian has been growing its position for several months with ambitions to change the composition of the board.
- Woolworths (WOW) warns on COVID costs saying first half food earnings are likely to be down on the previous year. Australian Food’s EBIT is expected to be between $1.19 and $1.22bn, down from $1.312bn over the same period a year ago. Supply chain and COVID related pressures weighting. Talk of positive sales momentum into Xmas with improved financial performance expected in H2 balancing out some of the negativity.
- BGH Capital has made an unsolicited, non-binding $607m bid for Virtus Health (VRT) or 710c per share, reflecting a 36% premium to yesterday’s close.
- Imugene (IMU) patent granted in China for HER-Vaxx Immunotherapy. Yesterday IMU received FDA investigational drug approval for its VAXINIA and HER-Vaxx therapies.
ECONOMIC NEWS/ BOND MARKETS
- Bond yields tumble – so much for those rate rise fears.
- NAB business survey for November: Confidence slips to +12, down from +20; Conditions improve to +12, up from +10. The improvement in business conditions was driven by a rise in the reemployment index as businesses re-hired staff. Conditions fell from record highs but remain elevated across most industries.
- ANZ weekly consumer confidence rose 0.5% last week. Weekly inflation expectations dropped 0.2% to 4.7%, the four-week average was unchanged at 4.8%. The rise in confidence was helped by the easing of the QLD border last week. A drop in confidence from NSW on the back of rising case numbers balanced out some of the enthusiasm.
- Western Australia will reopen its borders to the rest of the country and the world at 12.01 am on Saturday, February 5.
- The UK reports first Omicron death. Australia has not recorded any deaths from Omicron. Infections in UK running at 200,000 a day.
- US and Japan close to resolving their dispute over tariffs put in place on Japanese steel and aluminium under former President Donald Trump in 2018.
- China should lower interest rates and boost infrastructure investment to ensure the economy will grow by at least 5% next year according to research fellows at China Finance 40 Forum.
- 7.6 magnitude Earthquake sparks a Tsunami warning in Indonesia.
US AND EUROPEAN NEWS
- Biden trying to wrestle his stimulus spending bill back on track before Xmas.
- Elon Musk offloaded another 934,091 shares for about US$906.5m to cover taxes on the exercise of 2.1m options, according to regulatory filings dated Monday.
- European gas prices rise on Nord Stream 2 concerns.
- A French court has cut the tax penalty that UBS needs to pay to EUR1.8bn.
- In the US, ‘Grinch Bots’ are stealing Xmas as algos buy hot products then sell them online for a profit. Play Station 5s are very ‘botable’.