The ASX down 36 points to 7140 (0.5%). The market went into pause mode today after initial drops as we await the FOMC this week. Slightly complicated by Australia Day holidays. Mining stocks were on the nose as iron ore stocks fell, BHP down 0.2%, FMG fell 2.0% after a UK takeover and RIO down 0.7%. Lithium stocks were once again depressed, PLS off 2.5%, MIN down 3.5% and IGO falling 1.0% but second liners under more pressure with LTR falling 6.8%. Gold miners fell in sympathy as bullion remains firm in AUD terms, RRL dived 14.3% on an incident with the mine and a lowering of production guidance. Energy stocks waned too STO down 0.1% and WPL down 0.2%. CVN fell another 8.8% after Buffalo -10 was a duster. Industrials were mixed as some defensives managed to eke out some gains, GMG up 3.5%, COL better by 1.2% and DMP up 2.5%. Healthcare flopped CSL down 0.7% and Banks and financials eased back with the Big Bank Basket down to $174.18 (0.3%). MQG down 0.4% and insurers eased back. Tech once again weaker as SQ2 fell 3.6% and CPU down 2.4%. In company news, ADH plunged 21.5% on an earnings update, UWL rose 9.3% on potential acquirers coming forward, ASM up 2.1% as a Korean consortium completes its DD. On the economic front, Australia’s private sector shrank for the first time in four months, Asian markets were mixed and holding with the 10-year yields up to 1.93%.

MAJOR MOVERS:

  • Winners: UWL, SYA, OFX, GMG, AVN, MCY, CTD, REA
  • Losers: ADH, RRL, TRJ, TLX, STX, BBN, IHL, IMU
  • Positive sectors: Consumer staples.
  • Negative sectors: Banks, miners, Tech, Healthcare.
  • Hi 7155 Lo 7087
  • Big Bank Basket: Falls to $174.18 (-0.3%)
  • All-Tech index: Down 1.1%.
  • Gold: Steady at $2557.
  • Bitcoin: Falling to US$35355.
  • Aussie Dollar:  Steady at 71.82c 10-YEAR YIELD: Rises to 1.93%
  • Asian Markets: Japan down 0.1%, HK down 0.9% and China up 0.4%
  • US Futures: Dow futures up 236 NASDAQ futures up 130

Maybe gone a little early with some toe dipping but have 44% cash so some protection there. The market has become very crowded with maximum longs in the lithium space and quality may have been sacrificed. The herd is moving quickly in the chaos, so will that lead to bargains for the astute investor? You are dead right it will. Just be patient. The usual look at US indicators, surprised that the ‘Fear and Greed’ index is not that bad. Mind you the Crypto one looks horrible. Turns out that crypto was not a hedge after all. It was just another tech sector to be savaged. No real surorise here. An update on the NEAT Portfolio which has a good cash buffer. Shame it’s not all cash but that ship sailed. What to do now? READ MORE

STOCKS ON THE MOVE

  • UWL +9.28% company confirms interested parties.
  • REA +2.85% no change to results timetable.
  • GMG +3.54% logistics provider.
  • EBO +1.85% extends SPP/
  • WBT -0.85% first crossbar ReRam arrays.
  • DMP +2.51% everyone loves pizza when the market is down.
  • STP +8.00% plenty of underwear changes on ASX.
  • TIE +6.12% hits 2853gt Au within 25m of 131g/t at AG core.
  • RRL -14.29% production guidance falls on mine issues.
  • TLX -11.12% extends SPP. Completes $175m placement at 770c.
  • PLY -12.11% profit taking.
  • IPO of the Day – Viridis (VMM) +100.00% Decent first day volume.
  • Speculative stock of the Day:  Metalhawk (MHK) +21.82% exploration resumes at Berehaven nickel project. Not huge volume. That kind of day.

IN THE NEWS

  • Regis Resources (RRL) downgrades FY22 production guidance to 420-475Koz vs prior 460-515Koz. The all-in sustaining cost (AISC) guidance range for Duketon is now $1540 to $1610 an ounce, up from $1340 to $1410 an ounce. The company range is now $1425 to $1500 an ounce, up from $1290 to $1365 an ounce.
  • NIB Holdings (NHF) defers insurance premium increase until 1 September. Its COVID support package now totals more than $90m.
  • Betmakers (BET) New Jersey agreement extended to 15-years. Appointed exclusive licensee by NJTHA and Monmouth Park.
  • Fortescue (FMG) buys battery engineering division linked to Williams F1 for $310m.
  • South32 (S32) Q2 alumina production 1,332kt vs quarter-ago 1,278kt. Aluminium, metallurgical coal, lead and silver output fell.
  • Uniti Group (UWL) says it has received approaches from more than one party indicating potential interest in an acquisition of the company. Back in November, the technology infrastructure business confirmed it was on track to meet or exceed consensus of FY22 underlying EBITDA $144.5m.
  • National Australia Bank (NAB) – $200m class action brought by sub-contractors on the Walton Group collapse.
  • Adairs (ADH) – profit warning. First half would be around 50% of last year’s number. The CEO said store closures had meant a hit of around $18m. on earnings. Adairs said it expected underlying EBIT for the six months ended December 31 to be between $32m and $33m, compared with $60.2m a year earlier.
  • Fortescue Metals (FMG) – buying a UK engineering group for $310m. Williams Advanced Engineering (WAE) has some connections to the William Race team too. The company is at the forefront of battery technology. WAE is the provider of batteries to the cars that race in the Formula E world championship.

ECONOMIC NEWS/ BOND MARKETS

  • Australia’s private sector shrank for the first time in four months and business confidence dived.
  • The IHS Markit Flash Australia Composite Output Index tumbled to 45.3 in January from 54.9 in December.
  • The services index dropped to 45 from 55.1 in December; Manufacturing PMI index slid to a five-month low of 55.3.
  • Customs data for the final quarter of last year show 6.2m tons of Australian coking coal were finally allowed in, along with another 5.5m tons of thermal coal from China’s erstwhile trading partner that was destined for power plants.

CV19 NEWS

ASIAN MARKETS

  • WeChat has blocked ScoMo access in Asia.
  • China deploys warships near southern Japan and east of Taipei extending its naval reach.
  • Cathy Pacific reveals a US$783m loss in 2021 due to CV19.
  • Nickel stocks in China continue to hit lows. Helping keeping prices buoyant.

US AND EUROPEAN NEWS

  • The US governments have ordered embassy staff families to leave Ukraine.
  • US results and FOMC to dominate this week.
  • Oil pushing a little higher on more Middle East unrest on missile interceptions.

And finally….

Clarence

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