The ASX 200 fell 31 points CSL adjusted today to 7296 (0.4%). CSL accounted for 34 negative points after falling 8.2% to issue price as huge capital raising weighs. SPI expiry bumps volume. Over $1bn worth of trade in CSL. Suspect instos selling to retail. Banks fell with the Big Bank Basket down to $193.93 (0.01%), QBE continues to fall down 2.3% with MFG finding some support in fund managers. Healthcare was weighed down by the CSL drop. FPH dropped 2.7%, RMD down 1.2% and RHC dropping 0.8%. Industrials mixed but uninspiring. ALL up 0.5% and REITs finding support again, GMG up 1.6%. Tech stocks better following Nasdaq higher, WTC up 6.9% and APT finally finding some building blocks of support up 1.7%. The All–Tech Index up 1.6%. Miners enjoyed some gains, BHP fell 1.0% but FMG rose 0.9%, Gold miners were mixed NCM up 0.3% and NST up 0.8%. Energy stocks unloved, WPL down 1.3% and STO falling 1.5%. WSA now has cash on the table, IGO rose 1.4% in response with PAN doing well up 8.2%. In more corporate news, MSB had some good news from US up 10.9%, IDT tumbled 39.6% after missing out on government mRNA to Moderna. Plenty of economic news, the MYEFO out and a trillion-dollar debt looms, Frydenberg bullish on jobs, unemployment shot the lights out with a huge 366,000 jobs added and a headline rate of 4.6%. Philip Lowe was also talking in Wagga too talking taper finishing in May next year. 10 -year yields picking up to 1.58%.

MAJOR MOVERS:

  • Winners: TUA, PDN, MSB, BOE, SYR, LFG, PAN, WTC.
  • Losers: CSL, KED, CIA, ADT, NTO, BFL, DEG, 360.
  • Positive sectors: Tech. REITs. Industrials. Uranium. Lithium. Nickel.
  • Negative sectors: Healthcare.
  • Hi 7335 Lo 7277.
  • Big Bank Basket: Slightly lower at $173.93
  • All-Tech index: Rallies hard 1.6%.
  • Gold: Slips to $2478
  • Bitcoin: Slightly better to US$48978
  • Aussie Dollar:  Rises to 71.70c 10-YEAR YIELD: Rises to 1.58%.
  • Asian Markets: Japan up 1.8% Hong Kong down 0.8% and China down 0.1%.
  • US Futures: Dow futures up 55 NASDAQ futures up 41

Some big STRATEGY and PORTFOLIO changes today – see below. No podcast today – I am travelling. But it’s all laid out very clearly (I hope) below. I will be back on Saturday with the WEEKEND email. Click the banner below to read all of the latest ideas and updates.

Has the Fed opened the door to Santa? The market likes certainty and now it looks like the Fed has wrestled back the narrative. A look today at a new Potash project in Spain as some background to this week’s On the Couch. A NEAT ETF update. Suboptimal from some of the hot themes, so a thorough review on Monday ahead of the Xmas break. And CSL clears the bookbuild at the low end of the range. On ‘The Call’ yesterday Andrew Wielandt and I talked CSL and short term implications of this mega-deal. Ask the Analyst Friday. READ MORE

STOCKS ON THE MOVE

  • WSA +% 5.56% Cash bid at 336c.
  • MSB +10.90% some rare good news in US.
  • TUA +12.50% kicks again, hitting highs.
  • BOE +9.13% research positive.
  • PAN +8.16% WSA bid adds to appeal.
  • WTC +6.89% heading higher.
  • MAQ +6.66% research after investor day.
  • MCR +5.06% Tribeca tips turnaround.
  • HLS +4.97% CV19 testing boost?
  • ADO +14.71% testing kit bounce.
  • VMY +7.89% uranium bounce.
  • SLX +10.50% ZS-Si project on track for Stage 2 Completion.
  • VEE +10.47% Gyro sales update.
  • HFR +12.50% doing the rounds. See On the Couch.
  • TNY +22.94% on track for record quarter.
  • IDT -39.58% misses out on mRNA manufacturing facility from Govt funding.
  • HLO -7.14% goodbye rally.
  • CSL -8.16% falls below issue price.
  • CIA -6.00% iron ore slips.
  • 360 -5.48% completion of retail offer.
  • DEG -5.65% gold sell off.
  • Speculative stock of the Day: Biotron (BIT) +26.58% ok volume on an update on HIV-1 and CV19 programs. Hitting highs again.

IN THE NEWS

  • ACCC will not oppose Woodside Petroleum’s (WPL) proposed acquisition of BHP Petroleum International.
  • CSL completes $6.3bn placement at a bookbuild price of $273.00 share.
  • Qantas (QAN) expects a first-half EBITDA loss of $250-$300m. Underlying EBIT loss of more than $1.1bn is expected once non-cash depreciation and amortisation costs are included. Domestic capacity is expected to be 102% of pre-COVID levels for 3Q FY22 rising to 117% in 4Q FY22. Says it is in a strong liquidity position of ~$4.2bn, boosted by Mascot land sale. Net debt is expected to be ~$5.65bn at the of the month.
  • ANZ – has told shareholders to be patient as it looks to turn around its mortgage book performance.
  • WSA – IGO has announced approval for an all-cash offer at 336c. IGO will use existing cash reserves and debt facility. Not a huge premium over trading price but deal has been around for a while. Now cash. Largest shareholder says it will accept. Strange premium to the bid today, maybe more to come.

ECONOMIC NEWS/ BOND MARKETS

  • Mid-Year Economic and Fiscal Outlook (MYEFO) forecasts unemployment to fall sustainably below 5% and wages growth to outstrip inflation over the four-year forward estimates. Wages are forecast to grow by 11.25% between this financial year and 2024-25, while inflation is tipped to grow by 10.25%.
  • Debt will also continue to worsen with gross debt forecast to rise from $919bn this year (down from $963bn in the budget) to $1.189T by 20204-45 (down from US$1,199T) in the budget.
  • CBA hikes owner-occupier, investor fixed home loan rates. Owner occupiers on one -year fixed rate loans will now pay 2.54%, and up to 3.59% for five-year loans. Interest-only loan rates are unchanged.
  • Unemployment for November fell to 4.6%, beating estimates between 4.7- 5%. A massive 366,000 jobs were added well ahead of estimates of 200,000. The better than expected release puts pressure on the RBA to tighten monetary policy. The three-year bond yield jumped 11bps to 1.02% on the release.
  • ABS figures released today show that 28,240 people left Victoria in interstate migration between March and June, the largest number in any one quarter since ABS data

CV19 NEWS

  • NSW reported a daily record of 1,742 Covid-19 cases Thursday.
  • The Omicron variant infects around 70 times faster than delta and the original Covid-19 strain.

ASIAN MARKETS

  • Shimao jumped as much as 11% in Hong Kong trading after the shares fell to a decade low. Calm also returned to China’s junk dollar bond market.
  • US investment banks are looking at China’s relative value after a year of falls due to clampdowns.

US AND EUROPEAN NEWS

  • Three rises for next year from Fed.
  • BoE meeting today. Seems unlikely a rate rise, with 78,000 CV19 cases.
  • New Dutch government to go big with stimulus on climate change.
  • More wild weather in US.
  • Fauci says boosters give protection against Omicron.
  • Macron gearing up for an election.
  • UK PM facing by -election loss.

And finally…..

Doctor! Doctor! I think I’m a pair of curtains!

Pull yourself together, man.

Doctor Doctor I keep dreaming i am in a super market

How longs this being going on

Ever since I was lidl

Doctor: one minute I think I’m a wigwam. Then I think I’m a teepee.

Looks like you are too tense.”

Clarence

XXXX