The ASX 200 rallied hard today from the word go. The ASX 200 up 76 points to 7187 (1.1%). BHP was the stand-out up 3.7% as iron ore futures pushed higher on China stimulus hopes. BHP was 26 index points alone. FMG up 3.3% and RIO doing well up 2.2%. Other miners also recovering nicely, S32 up 1.0% and AWC up 1.5%. Oil and gas stocks modestly higher with WPL up 1.0%. Banks were the other big winners taking their cue from MQG up 3.9% on its record quarter and SUN up 5.5% on better numbers. ANZ saw some broker upgrades rising 1.5% and the Big Bank Basket up to $170.84. CSL bouncing 0.9% post the SPP finishing and dragging FPH higher and COH up 1.0%. Industrials a little more wishy washy with staples weaker, WOW off 1.6% and WES down 1.0%. TCL did well up 0.9% and REITS also better driven by positive results as GMG up 0.1% and SCP up 3.2% on good numbers. Tech under pressure as SQ2 fell 6.3% on the Block fall in the US, CPU also under pressure down 2.4%. The All-Tech Index fell 0.9%. In corporate news, MQG breaking records, SUN cut dividend but beat estimates, NAN rejigged its GE deal and fell 4.8% and PBH had their first punter in Pennsylvania, falling 4.2%. Must have lost. In economic news, business confidence fell slightly, and consumer confidence dropped below 100. 10-year yields smash through 2% to 2.09% as two-year yields rally hard too. Asian markets mixed, China down 0.9%, Japan up 0.6% and HK off 1.6%.

MAJOR MOVERS:

  • Winners: RNU, MLX, WEB, MFG, FLT, 88E, AVZ, SUN
  • Losers: APX, SQ2, NEA, SDR, NAN, PBH, BET, NCK
  • Positive sectors: Iron ore. Banks. Insurers. Energy.
  • Negative sectors: Tech. Staples.
  • Hi 7203 Lo 7116
  • Big Bank Basket: Rises $170.84
  • All-Tech index: Down 0.9%
  • Gold: Rises slightly to $2556.
  • Bitcoin: Rises to US$44208
  • Aussie Dollar:  Rises to 71.27c 10-YEAR YIELD: Roars ahead up to 2.06%
  • Hong Kong back online up 2.7% and Japan up 0.3%
  • US Futures: Dow up 20 Nasdaq up 17

STOCKS ON THE MOVE

  • RNU +15.00% kicking again.
  • MLX +10.71% tin exposure.
  • FLT +6.71% short squeeze on reopening.
  • MFG +7.18% bounce but will it last?
  • SKO +4.62% reopening trade. Thin and illiquid though.
  • WZR +16.67% waking up.
  • BRU +11.90% timing of testing program brought forward.
  • A2B +12.07% taxi. Sandon Capital buys more now 10.2%
  • REX +9.32% reopening winner.
  • NEA -6.12% PT slashed by Macquarie to 130c.
  • PLY -6.11% sells BEANS for few beans.
  • RDT -7.33% Maiden RC lithium results from Mt Ida.
  • APX -7.41% wobbles ahead of results.
  • NAN -4.76% GE deal revamped.
  • MGF -0.91% weekly NAV.
  • WBT -3.29% profit taking.
  • SDR -5.57% heading back down.
  • SQ2 -6.33% Block falls in US.
  • Speculative stock of the Day: Solis Minerals (SLM) +80.49% good volume on the back of widespread copper sulphides at Mostazal in Chile.

IN THE NEWS

  • Macquarie Group (MQG) – Improved overall market conditions in Q3 resulted in a record quarter for the group. MQG’s financial position comfortably ahead of APRA’s requirement with a CET1 ratio of 12.2% and a capital surplus of $11.5bn.
  • Suncorp Group (SUN) first-half cash earnings of $361m were ahead of consensus of $355m although down 29% on FY21. Higher claims costs from natural hazards and lower investment market returns were named as the culprits. An interim dividend of 23c was down 11% vs a year ago but ahead of estimates of 17c. NIM decreased 12 bps from 2H21 to 1.97%. The full-year outlook for natural hazard costs is around $1.075bn up from $908m. The La Nina climate pattern and COVID adding to a challenging operating environment. CEO Steve Johnston tried to soften those comments saying momentum was buoyant heading into the second half. Gross written premium growth in Australia and New Zealand was strong and SUN’s underlying insurance trading ratio increased to 8.0%, although that is behind its FY23 target of 10-12%.
  • Dexus Convenience REIT (DXC) has told investors it’s on track to lift distributions 5.5% in FY 2022 and confirmed a 11.5¢ distribution.
  • Santos (STO) – has booked 100m tonnes of CO2 storage resource in the Cooper Basin in South Australia.
  • Bapcor (BAP) has appointed Noel Meehan as its new CEO, effective immediately.
  • Nanosonics (NAN) – has revised its current sales model with GE Healthcare in North America. It downgraded sales guidance for FY 2022 by $13m to $16m as a result of the changes. Total sales are now expected to finish at $60.6min H1 FY 2022.
  • Shopping Centres Australasia (SCP) – revenue climbed 25.2% to $172.8m while net profit firmed 320.2%to $432.4m, supported by a $349.4m increase in the like-for-like fair value of investment properties.
  • Playside (PLY) – admitted some technical issues with the sale of its haul of NFTs. 2223 BEANS were sold for next to nothing. No hill of beans, it seems.

ECONOMIC NEWS/ BOND MARKETS

  • The yield on notes due April 2025 jumped as much as seven basis points to 1.54% as yields at the short end hit highest level since 2019. The RBA will conclude its more than $350bn ($250 billion) QE program on Thursday, with its final scheduled operation to buy $1.6bn of federal government bonds.
  • Consumer confidence dropped 1.9% last week to 99.9. A neutral reading is 100. A drop in confidence attributed to hawkish commentary and outlook from the RBA. A plausible scenario for a rate hike in 2022 was a big shift from no hikes until 2024.
  • NAB’s monthly business conditions survey printed a 5-points fall below their long-term average to plus 3 points in January.

ASIAN MARKETS

  • US and Japan reach an agreement to remove steel tariffs brought in under President Trump.
  • Nvidia is pulling its purchase of ARM from Softbank. SoftBank now plans to proceed with an initial public offering of Arm, in lieu of the deal.
  • Carrie Lam in HK continues to pursue a CV19 zero policy despote around 800 cases in fifth wave.

US AND EUROPEAN NEWS

  • Avocado prices up 30% from Super Bowl last year. Supply chain from Mexico to blame.
  • In the US 500,000 nurses will retire by the end of 2022. They need to find 1m new nurse to replace them. Already massive shortage.
  • French President says Putin moving towards deescalating Ukraine crisis. US says he is poised to invade.Germans worried about fuel prices.
  • Amazon is more than doubling the maximum base salary it pays employees to US$350,000 from US$160,000. Suspect the fulfillment centre employees will not be troubled by this. The e-commerce giant employed 1.6m people globally. Warehouse workers get at least US$15 an hour and recently raised to US$18. No wonder a Prime subscription in US now costs US$139.

And finally…