The ASX rose 10 points to 7342 (+0.14%) as resources rallied hard and banks and industrials flopped. Good recovery BHP vote tonight. The Big Bank Basket fell again to $177.00 (-1%) with NAB down 1.3%, CBA off 0.7% and MQG also under pressure down 0.6%. MFG managed some gains, up 1%, but was a rare patch of green. Insurers fell with MPL down 3.2%, SUN off 1.5% and ASX falling 2.0%. Industrials slid slightly with bond proxies under some pressure, GMG down 0.3%, SCG off 1.3%. TLS fell 1.0%, other defensives slid with WOW down 0.9%, ALL off 0.9% and TCL falling 0.8%. In the best of times, miners leapt, BHP up 3.1% ahead of the vote tonight, FMG up 4.7% and lithium and gold miners rallied hard. NST up 11.2% on production report, PLS up 2.2%, MIN up 2.8% and IGO doing well up 4.1%. Energy stocks were also hot to trot on continued oil price rises despite Joe Biden trying valiantly to talk oil prices down. WPL up 1.5% and STO up 0.8% on production numbers. Junior gold explorers also in the buyer’s sights, CMM up 6.3%, RMS up 5.8% and DEG up 7.5%. Tech stocks under a little pressure, SQ2 made its debut today falling 0.4%, WTC down 0.1% and XRO sliding 0.3%.  The AllTech Index down 0.9%. In corporate news, VRT got a new bid up 7.6%, production reports aplenty. GPT saw some leadership changes down 1.5%. On the economic front, unemployment fell again making life a little more uncomfortable for the RBA next month. 4.2% unemployment is the equal fourth lowest since 1978. And we have emergency rate settings. That will change. In Asia, China pledged more stimulus for the economy, Japan up 1.3%, HK up 2.3% and China up 1.1%

Major Movers:

  • Winners: 88E, ADN, WBT, NST, EVN, FFX, NMT, A4N, VRT
  • Losers: CVN, BRN, DDR, KLS, SGF, ASM, CXL, RBL
  • Positive sectors: Resources.
  • Negative sectors: Banks. Industrials. REITs. Tech. Consumer stocks.
  • High 7355 Low 7299
  • Big Bank Basket: Falls to $177.00 (-1.0%)
  • All-Tech index: Down 0.9%. SQ2 first day at school
  • Gold: Higher at $2543
  • Bitcoin: Slightly lower to US$41994
  • Aussie Dollar:  Higher at 72.33c
  • 10-Year Yield: Steady at 1.99%
  • Asian Markets: Japan up 1.3%, HK up 2.5% and China up 0.4%
  • US Futures: Dow futures up 159 NASDAQ futures up 72.

End of Day Podcast – Thursday, January 20

Stocks on the Move

  • ADN +13.95% Minotaur takeover offer update.
  • WBT +12.46% basking in BRN glory.
  • NST +11.20% undervalued and good production numbers.
  • VRT +7.62% new T/O bid at 760c.
  • NMT +7.78% battery recycler doing well.
  • PAN +7.41% Nickel price rise.
  • CHN +7.46% Corporate presentation.
  • 4DS +21.05% BRN showing the way.
  • ASO +24.00% kicks again after drilling results yesterday.
  • EMH +21.22% top sheet write up.
  • CRR +27.27% assay results confirm high grade lithium at Mavis Lake.
  • ARR +21.13% response to ASX speeding ticket.
  • CVN -11.59% Buffalo-1 disappointment.
  • BRN -6.81% profit taking.
  • CXL -5.04% run comes to an end.
  • TUA -3.74% trending back down.
  • LPI -11.52% investor webinar.
  • SQ2 -0.35% on debut.
  • CAE -6.85% profit taking after big run.
  • NC1 +58.33% second day of trade.
  • Speculative stock of the Day: Morella Corp (1MC) +65.22% basking on recent Fish Lake exploration lithium project update. Confirmed mineralisation in USA asset.

In the News

  • Woodside Petroleum (WPL) Q4 delivered production 22.6mmboe, up 2% vs a quarter ago. Revenue US$2.85bn up 86% and production of 22.6mmboe up 2% over the same period. Average realised price increased to US$90 per barrel of oil equivalent, up 53% from Q3 2021. Expects to recognize a full-year non-cash, post-tax impairment reversal of US$582m. Woodside CEO Meg O’Neill commented on a range of highlights for the quarter which included strong revenue supported by increased product pricing, executing the binding share sale agreement with BHP for the proposed merger, taking final investment decisions on the Scarborough and Pluto Train 2 projects and progressing Woodside’s strategy for new energy investment.
  • Virtus Health (VRT) has received a 760c bid from a London-based private equity firm, CapVest, valuing its equity at $650m.
  • Sydney Airport (SYD) December traffic up 70.4% vs a year ago. SYD said the outlook for passenger traffic continues to remain subdued due to tightly controlled inbound international travel, entry requirements and restrictions into key overseas markets, and the significant domestic flight cancellations announced for Q1 2022. Overseas arrivals and departures are improving, hitting their highest level since travel restrictions were introduced in March 2020.
  • Incitec Pivot (IPL) -has maintained its operational production targets despite the impacts of COVID-19 and has pointed to “strong commodity tailwinds”.
  • Z1P – generated $167.4m in revenue for the December quarter, the record for the company. Z1P transaction volume record of $2.6bn for the period, up 53% on the same quarter a year prior. Customer numbers jumped 57% from a year ago to 9.9m and the number of merchants using the platform more than doubled to above 80,000.
  • Santos (STO) Record annual production and sales revenue. Annual production 92.1m barrels and quarterly sales revenue of US$1.5bn in the 4Q.
  • Resolute Mining (RSG) gold production up 5% in December. Quarterly gold sales of more than 75,000 ounces with an average realised gold price of $1749 per ounce compared to the average spot price of $1796 per ounce.
  • Northern Star (NST) $950m in December quarter sales revenue. It forecast 1.55 to 1.65m ounces of gold with an average price of $1475 to $1575 per ounce remained unchanged. Cash and bullion of $588m.
  • Telix Pharma (TLX) – raising $175m at 770c including a sell down from entities associated with CEO Christian Behrenbruch. 4m shares sold by two co-founders. Funds raised would be put towards its prostate clinical studies ($90m), kidney studies ($30m) and future pipeline and indication expansion ($62m).

Economic News/Bond Markets

Seasonally adjusted estimates for December 2021:

  • Unemployment rate decreased to 4.2%.
  • Participation rate remained at 66.1%.
  • Employment increased to 13,242,000.
  • Employment to population ratio increased to 63.3%.
  • Underemployment rate decreased to 6.6%.
  • Monthly hours worked increased by 18m hours.
  • Westpac has brought forward expectations for the first interest rate rise to August 2022 when it predicts the Reserve Bank will raise rates to 0.25% from 0.1%.

CV19 News

  • New Zealand will tighten Covid-19 restrictions when the omicron variant hits but will not head back into lockdown.

Asian Markets

  • Chinese lenders lowered borrowing costs for a second straight month. The one-year loan prime rate was cut by 10 basis points to 3.7%. The five-year rate, a reference for long-term loans including mortgages, was lowered by 5 basis points to 4.6%, a smaller reduction than predicted.
  • Rich HK residents are hiring private jets to evacuate their hamsters and other pets out of the country.

US and European News

  • European markets opening firmer.
  • Biden gets on the front foot with an address on his one-year anniversary. Says uncertain whether China tariffs will be lifted.
  • Biden predicts Russia will ‘move in’ on Ukraine.
  • Unilever says it will not be increasing its bid for GSK business unit.
  • NY attorney General claims significant evidence of ‘Trump Fraud’.
  • Boris Johnson seems to be Dead Man Walking.

And finally…..