The ASX 200 fought back from over 60 down to close down only 9 points at 7111 (0.13%). Miners were the star attraction as China returned from LNY. BHP rose 1.2% with FMG also doing well up 0.9% and base metal stocks pushing higher, ILU up 4.5% and S32 rallying 1.0%. Gold miners not doing much with energy better STO up 1.6% and WPL up 1.9%. Coal stocks also doing well with CRN up 7.6% with PDN up 1.4%. Banks were weaker after ANZ Q1 results, WBC up 0.2% building on last weeks update. CBA flat and NAB down 1.2%. The Big Bank Basket flat at $169.70 (0.5%). Healthcare under pressure as CSL pricing period coming to an end. The stock finishing down 1.6%, FPH off 1.7% and SHL falling 1.1%. Industrials mixed with staples slipping but travel stocks doing well as we finally allow double vaccinated visitors into Australia from Feb 21st. FLT up 7.2% and WEB up 6.8%. Tech stocks were better following Nasdaq higher, XRO up 0.5% and SQ2 up 3.1%. The AllTech Index fell 0.2%. In corporate news, ANZ Q1 disappointed with the stock falling % on NIM pressures, GNC knocked the lights out with bumper crop talk rising 12.3% and CTT rose 21.8% as it signed a deal with JD.Com. MFG fell 11.2% after Hamish stepped down for personal reasons, Chris Mackay taking the reins. JHX showed us the strength of the US market with results rising 2.0%. In economic news, retail sales out today up 4.4% but job ads ease. Asian market back on stream after LNY with China up 2.0% and HK down 0.3%. Japan down 0.8%. 10-year yields close to 2%.

MAJOR MOVERS:

  • Winners: CTT, GNC, WBT, FLT, CRN, SWM, ABR, CTD, WEB
  • Losers: MFG, NCK, BRN, INR, APX, IHL, TRJ, URW
  • Positive sectors: Iron ore miners. Energy. Rare earths and base metals.
  • Negative sectors: Banks. REITs. Healthcare. Consumer staples.
  • Hi 7128 Lo 7047 Same low as yesterday.
  • Big Bank Basket: Falls to $169.70 (0.5%)
  • All-Tech index: Down 0.2%
  • Gold: Rises to $2553.
  • Bitcoin: Rises to US$42886
  • Aussie Dollar:  Slips to 70.88c 10-YEAR YIELD: Back up to 1.99%
  • China back online up 2.0% and Japan down 0.8%
  • US Futures: Dow down 3 Nasdaq up 32

STOCKS ON THE MOVE

  • CTT +21.79% signs deal with JD.com
  • GNC +12.34% very positive update.
  • WBT +8.22% tech comes back.
  • CTD +7.00% FLT +7.80% travel stocks improving as cases drop.
  • GQG +6.13% FUM steady in January.
  • SWM +7.35% FTA ad spends.
  • PLY +29.06% earns $8.38m in NFT business.
  • IPG +15.42% first half trading update. Distributor of electrical infrastructure projects.
  • ASO -13.89% 93% liberation of nickel by initial analysis.
  • MFG -11.24% Hamish steps down.
  • NCK -6.19% broker downgrades.
  • IMD -2.36% results disappoint.
  • BRN -6.1% backing and filling.
  • INR -5.97% under pressure after environmental issues continue.
  • HAS -3.33% profit taking.
  • Speculative stock of the Day: Melbana Energy (MAY) +78.38% drilling update form Alameda 1. Significant oil interval of 55nMD with high gas pressure.

IN THE NEWS

  • GrainCorp (GNC) expects FY22 underlying profit to possibly double FY21’s result. Sees FY22 underly profit of $235-280m vs consensus $165.6m and $139m in FY21. Management said the strong outlook reflects GNC’s ‘outstanding’ supply chain execution, continued delivery of operating initiatives and high global demand. Added FY21’s excellent result is expected to be improved on in FY22. “The strong harvest, coupled with supply shortages and adverse weather conditions in the northern hemisphere, is driving excellent global demand for Australian grain and oilseeds and strong supply chain margins for grain exports.” CEO and MD Robert Spurway said.
  • ANZ December quarter update. Net interest margin down 8bps for the quarter, given WBC’s update and structural headwinds like competition for the sector, a soft NIM was arguably expected. Added higher rates in NZ and deposit pricing changes will help moderate NIM pressure going forward. Australian Home Loans balance sheet grew slightly in the first quarter of FY22. Soft markets revenue in October is expected to weigh on first-half performance despite better months in November and December. Macquarie estimated a $100-200m downside risk to markets income. Operating income in FY22 is expected to be hit by ~$140m following changes to its Australian Retail and Commerical business. Run-the-bank costs are expected to be flat in the half which is good to see. Two-thirds of its $1.5bn on-market buy-back has been completed which will continue to help support the share price and is considering upgrading the size. CET1 ratio at 11.65% is above APRA’s new 10.25% benchmark.
  • Syrah Resources (SYR) approves FID for Vidalia’s expansion to 11.25ktpa, launches 1-for-9 rights issue to raise $250m at 148c.
  • James Hardie Industries (JHX) Q3 adjusted net income US$154.1m vs consensus US$154.7m.Revenue US$900m vs consensus US$900.3m. Full-year adjusted net income guidance upgraded again to US$620-630m prior guidance US$605-625m. JHX upgraded guidance back in early January although focus had been directed towards the firing of CEO Jack Truong.
  • Magellan Financial Group (MFG) chairman Hamish Douglas is stepping down. REA Group chairman Hamish McLennan to be the successor. McLennan served as Deputy chair since 2019. The share price is down more than 60% in the last year. The termination of the St. James’s Place mandate weighed heavily. A search for a new CEO is still underway with co-founder Chris Mackay named last Wednesday. FUM slipped away again in January hit $93.54bn vs $95.49bn at the end of December.
  • Cettire (CTT) – new deal to enter China through a partnership with e-commerce giant JD.com

ECONOMIC NEWS/ BOND MARKETS

  • Detailed retail sales data for December did not have much of an influence. The preliminary reading which was out last week was down 4.4% vs consensus of a 2% fall. Retail sales still remain elevated compared to pre-pandemic levels, with December’s monthly turnover the second-highest level in the series following last month’s record according to the ABS.
  • January Job ads fell by 5.5% in December after an upwardly revised gain of 9.9% in November. Job ads are considered a leading indicator for the jobs market. RBA expects unemployment to get to a low of 3.75% in December 2022 vs previous estimates of 4.25%.

ASIAN MARKETS

  • Chinese shares climbed on their return from a week-long holiday, the benchmark is on track for its best post-Lunar New Year holiday performance since 2019.
  • India’s central bank postponed its interest-rate review by a day as the nation mourns Lata Mangeshkar. She was known as the ‘Nightingale of India’. She was 92 and has been cremated with state honours.

US AND EUROPEAN NEWS

  • Europe is drawing up contingency plans for an energy price shock if Russia hits Ukraine. New German leader Scholz heads to Washington.
  • Dutch central bank chief urges ECB to raise rates in Q4.
  • Cost of living pressures in UK leave 4.7m struggling for food.

And finally…..

Clarence

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