The ASX 200 shrugs off a negative start to push 63 points higher to 7355 (0.9%) in thin trade. The holy trinity of banks, healthcare and big miners driving the index higher. The Big Bank Basket rallied to $176.68 (0.4%) with MFG finding some support in very volatile trade, closing up 4.4%. MQG bounced slightly but insurers mixed, SUN down 1.4% and QBE off another 0.6%. Big iron ore miners were back in demand as iron ore prices rose again in Asia, BHP up 1.5%, FMG better by 1.7% and RIO rallying 3.2%. EV and lithium stocks eased back on the news that Manchin blocked the Biden Build Back Better Bill. News from PLS didn’t help on a production downgrade given staffing issues in WA, falling 9.1%. Some disappointment across the sector as VUL down 3.8% and IGO off 0.7%, with LTR also down 4.2%. Energy stocks gained on a bounce in energy prices, STO up 0.8% and WPL up 1.1%. Industrials firm but idle, TCL up 0.7% and WOW up 0.4%. Healthcare in demand as tests for Omicron soar, CSL bounces 4.9% with RHC up 3.1% and SHL better by 2.4%. CSL accounted for 20 points of the rise as sellers retreat. Tech stocks were mixed, APT down 1.1% and XRO up 2.6%, the All-Tech Index up 0.7%. In corporate news, ACL seems to be a winner from CV testing up 12.2% on an update, FFX released some good results up 7.4% and MMM rose 20.9% after buying a Ready-to Heat company Chefgood. On the economic front, the RBA has released its minutes showing rates will not be going up before wages go up. The market liked that. 10-year yields rose to 1.59% helping banks.

Major Movers:

  • Winners: ACL, TLX, NAN, FFX, GRR, EHE, Z1P, CSL, SFR
  • Losers: PLS, PEB, DVP, BRN, LTR, SPL, MMS
  • Positive sectors: Banks. Iron ore. Healthcare. Industrials. Energy.
  • Negative sectors: Lithium
  • High 7359 Low 7287. Ho Ho Ho
  • Big Bank Basket: Rises to $176.68 (0.4%)
  • All-Tech index Up 0.7%
  • Gold: Slips to $2518
  • Bitcoin: Slightly higher at US$48546
  • Aussie Dollar:  Steady at 71.14c
  • 10-Year Yield: Rises to 1.59%
  • Asian Markets: Japan up 1.4% Hong Kong up 0.5% and China up 0.5%
  • US Futures: Dow futures up 223 Nasdaq up 158

Stocks on the Move

  • ACL +12.22% strong update.
  • TLX +9.32% targeted Alpha Therapy for Bladder cancer.
  • GRR +6.82% iron ore price rise.
  • CSL +4.91% SPP details.
  • MCR +3.04% continuing higher still.
  • NAN +7.46% bouncing back.
  • CXL +3.17% turns positive on PLS update.
  • MMM +20.86% acquisition of ready meal company.
  • FFX +7.35% new gold strike.
  • VR1 +17.39% market update and guidance.
  • MME +11.05% new funding facility for growth.
  • CXO +4.04% buyers re-emerge.
  • MFG +4.37% volatile trading as MS downgrades and shorts scramble.
  • Z1P +5.08% rallies on consolidation hopes.
  • PLS -9.06% production update.
  • VUL -3.83% AKE -0.22% lithium stocks drop on Manchin block.
  • ALG -3.21% Dreamworld update.
  • NVX -3.38% battery tech falling.
  • NXM -30.39% Crusader – Templar drilling results include 29m @ 4.6g/t.
  • Speculative stock of the Day: No real volume in the spec stocks, Total Brain (TTB) +26.32% after a data licensing deal with Janssen Research in digital mental health.

In the News

  • Marley Spoon (MMM) – announced the acquisition of Melbourne based “ready meal” company Chefgood for $21m. The deal could cost an additional $5.6m over the next two years due to earnout clauses. The acquisition will be funded by existing debt facilities and an $8m share placement at $1 per ASX-listed CDI.
  • Pilbarra Minerals – FY22 production guidance and provides several project updates – The market will be a little spooked about delays to production on the WA Skills shortage. “FY22 annual concentrate production to 400-450Kt vs prior 460-510Kt. Lithium market conditions remain very strong, with high demand and constrained supply leading to record product pricing, which is still trending higher”.
  • Firefinch (FFX) has reported new drilling results from its Morila project, identifying a new, high-grade gold zone. The company notes multiple meaningful strikes above 30g per tonne. Morila, in Mali, Africa, has produced over 7.5m ounces of gold since 2000.
  • Australian Clinical Labs (ACL)has upgraded its H1 NPAT guidance from $86.3-94.9m, to $116.3-128.0m – a very significant upgrade. Revenue guidance was also upgraded, from $437.5-454.9m, to $497.3-517.2m. The company noted that the upgrades reflects continued strong demand for Covid -19 testing, particularly in VIC and NSW, as well as a sustained resilient performance of the non-Covid business.
  • Brisbane based battery charger maker Tritium plans to open U.S. plant in third quarter of next year as demand outpaces supply. The company has sold more than 5,200 chargers globally and is listing through a SPAC in US.

Economic News/Bond Markets

  • RBA Minutes: said tapering its bond-buying program at the first meeting of 2022 and ending it in May is consistent with existing forecasts. The bank also said that risks to the recovery from the omicron variant would also be clearer by February.

CV19 News

  • NSW reported 3057 cases (a record), Victoria reported 1245 cases, South Australia reported 154 cases (a record), Queensland reported 86 cases (a record), the ACT reported 16 cases, the NT reported 14 cases, and Tasmania reported 4 cases. ACT is reintroducing compulsory mask-wearing indoors from midnight.
  • Omicron becomes the dominant strain in the US with 73% of CV19 cases.
  • New Zealand is pushing back the phased reopening of its border until the end of February due to the threat of the omicron variant. Additional border protections will include requiring a negative pre-departure test within 48 hours of travel, down from 72 hours, and mandating all border workers to get a booster shot. Air NZ cancels 120 flights affecting 27,000 passengers.

Asian Markets

  • China adds support for property sector – steel mills are expected to boost output in December.
  • The CSI 300 Real Estate Index of mainland-listed shares climbed as much as 5.2% as authorities encouraged lenders to fund acquisitions of distressed developers.

US and European News

  • Cathy Wood has predicted a 40% compound growth for her flagship ARK Innovation ETF in the next five years.
  • Nike has posted a net profit of $US1.34bn on sales up 1% to $US11.4bn for the quarter ended November 30, 2021.
  • Davos deferred on Omicron woes.
  • Chile stock market falls after Boric wins the presidency.
  • FDA approves first injectable treatment to prevent HIV.

And finally….