The ASX rose 49 points to 7439 (0.7%). Some caution crept in ahead of US CPI data. Banks were flat with the Big Bank Basket at $180.52. MQG bounced back from recent losses up 1.6%, ASX rose 1.9% though MFG eased 1.9%. Healthcare was mixed, CSL rose 1.9% but SHL down 0.9%. Industrials slightly better with WES up 0.6%, TLS up 2.0% and TPG up strongly by 5.0% on a broker upgrade. Tech slightly firmer led by APT up 4.8% as Block cheered on Spanish clearance. Resources were again the focal point. Iron ore miners firmed again as Asian iron ore prices rose, BHP up 1.1% with the vote on the DLC next week and possible radical index changes concentrated in one day. FMG slipped 1.1% on a broker downgrade, RIO rose 0.9% and lithium stocks were again in heaven, PLS up 1.7% and AKE up 4.2%. CXO has another good day up 13.7%. Even NMT went hard up 13.8%. Energy stocks also in demand as oil heads higher, KAR up 3.5% and STO up 3.6%. Gold miners also doing well, DEG up 3.6% and NCM rose 2.3%. In corporate news, LTR rose 5.2% after an offtake agreement with LG. Job vacancies rose again and Chinese CPI came in below estimates. 10-year yields eased again to 1.85%
- Winners: NMT, CXO, SYA, AVZ, BRN, GLN, CTT, NIC
- Losers: AEF, SKO, CEN, FFX, DMP, REH, OFX, PSI
- Positive sectors: Iron ore. Lithium. Nickel. Oil. Telcos. Tech
- Negative sectors: Consumer staples.
- Hi 7468 Lo 7404. Narrow range.
- Big Bank Basket: Flat at $180.52
- All-Tech index: Up 1.7%
- Gold: Stronger at $2521.
- Bitcoin: Slightly higher to US$42607
- Aussie Dollar: Higher at 72.18c 10-YEAR YIELD: Eased to 1.85%.
- Asian Markets: Japan up 1.9% Hong Kong up 2.1% and China up 0.4%.
- US Futures: Dow futures up 10 NASDAQ futures up 2
STOCKS ON THE MOVE
- NMT +13.84% battery recycling play on the move.
- CXO +13.67% Finniss attracting attention.
- BRN +10.19% buyers still happy.
- GLN +8.50% lithium catch up.
- LTR +5.16% offtake agreement.
- BYE +16.00% oil prices and directors buying.
- PAF +1.35% throws in towel after increased WAM bid.
- PLS +1.70% Citi says too early to sell still.
- ADN +13.16% good volume and change of interest for MEP.
- EM2 +12.50% high grade assays show resource potential.
- RNU +12.82% buyers back.
- TPG +4.96% broker upgrade.
- NIC +6.53% nickel price hits 7-year high.
- MAD +10.28% bouncing back.
- MMM +12.94% lockdown winner perhaps again.
- DMP -4.19% US company talks inflation pressures in food.
- AEF -7.72% valuation wobble.
- FMG -1.14% downgraded to a sell by Citi.
- BLY -4.76% increase in PNC ABL facility.119 shares trade.
- FFX -4.32% Mali update.
- Speculative stock of the Day: Blackstone (BSX) +25.00% ‘we see no reasons- because there are no reasons’. Except lithium and speculators piling in.
IN THE NEWS
- Liontown (LTR) inks lithium spodumene concentrate offtake deal with LG Energy Solution. The South Korean company to purchase 100K DMT in the first year, increasing to 150K DMT per year in subsequent years. Initial 5-year contract to start in 2024 with the ability to extend for a further 5 years.
- Openpay (OPY) first half (year to date) total transaction value (TTV) of $160m, up 44% vs year ago. Said it is going to priorities the US market. Looking at cost reductions in Australia to improve profitability. CEO Michael Eidel to step down. Share price in a solid downtrend since the third quarter of 2020.
- Block (previously Square) has received approval from the Bank of Spain regarding its acquisition of Afterpay (APT). Afterpay shares will be suspended from trading on the ASX from January 19. Block CDIs ( CHESS Depositary Interest) will start trading on the ASX under the code ‘SQ2’ on January 20.
ECONOMIC NEWS/ BOND MARKETS
- Job vacancies increased 18.5% in the three months to November 2021 to 396,100. 169,000 more than before the start of the pandemic reflecting the high demand for workers and pace of recovery in the labour market.
- The World Bank has downgraded China’s GDP growth estimate to 8% for 2021, from a previous forecast of 8.5%, with the economy expected to slow to 5.1% in 2022, from 5.4%. It kept its forecast for 5.3% growth in 2023 stable.
- COVID-19 has caused more than 300m reported infections worldwide and nearly 6m deaths.
- Some US airlines said Chinese authorities have blocked some of their flights from entry as the country steps up precautions against Covid-19.
- China has sent three people to jail for up to 4 years over breaches over CV19 rules. Just as well it wasn’t the Chinese Tennis Open then.
- About 400,000 Israelis have gotten a fourth dose of the Covid-19 vaccine
- The Chinese producer price index rose 10.3% from a year earlier, down from November’s 12.9%, while the consumer price index increased 1.5%, compared with 2.3% in November.
- Chinese food prices are helping keep a lid on CPI.
- Hang Seng Tech Index stages strong rebound from bottom. The move was led by JD.com Inc. and Meituan, which advanced at least 7.7% each.
US AND EUROPEAN NEWS
- US CPI number tonight 7% Y/Y and 5.4% core the forecast. Volatility beckons.
- Citigroup is set to exit is Mexican retail banking business.
- BoA scraps fees for bounced cheques. (what are cheques?).
- Boris Johnson continues to be attacked after BYO party during lockdown.
- US oil production set to hit new records with 12.4m barrels a day. So much for going green.