The ASX 200 finishes the week down 71 points at 7217 (-1.0%). Sloppy start and no real bounce on US falls after CPI. Finished weak too. Banks were mixed with CBA sagging slightly down 2.2% and the Big Bank Basket flat at $178.99. NAB getting more good press. MQG tried valiantly and failed to bounce after some days of losses as MFG fell 4.9% on a $5.5bn drop in FUM post-Hamish stepping down. Insurers better with IAG results helping. Healthcare soggy with CSL still struggling down 2.1%, FPH down 4.1% and SHL off 1.8%. REITS also under pressure as 10-year yields once again pushed higher and higher. GMG fell 3.9%. Supply chain issues. Industrials weaker across the board with a special mention to Tech which suffered from Nasdaq woes. SQ2 fell 6.7%, WTC off 3.4% and XRO heading south by 4.5%. The All–Tech Index dropped 3.0%. Iron ore miners though doing well as Asian futures up around 3% plus. BHP rose 1.2%, RIO up 2.9% and FMG doing well up 2.7%. MGX joining in the fun rising 10.3%. Elsewhere in the miners, things not quite so strong, PLS down 4.2%, MIN down 2.6% again and IGO off 1.9%. Oil stocks were firm but uninspiring. In corporate news, a big surprise from BOC up 122.5% after a report the Panguna mine could be reopened after a landowners meeting. WES down 1.1% despite ACCC approval to go into the chemist business. Asian markets were surprisingly better, Japan up 0.4%, China up 0.3% and HK unchanged despite a big rise in CV19 cases.

End of Day Podcast – Friday, February 11

Major Movers: 

  • Winners: IHL, MGX, URW, YAL, IAG, ABR, DGL
  • Losers: PPK, IEL, CTT, TLX, Z1P, 360, SWM
  • Positive sectors: Iron ore miners
  • Negative sectors: Healthcare. Banks. REITS, Industrials. Tech
  • ASX 200 up 1.3% this week
  • High 7294 Low 7192
  • Big Bank Basket: Slips to $178.99 (-1.0%)
  • All-Tech index: Down 3.0%
  • Gold: Steady at $2560
  • Bitcoin: Lower at US$43214
  • Aussie Dollar:  Slips to 71.20c
  • 10-Year Yield: Rallying hard to 2.17%
  • Asian markets better China up 0.3% and HK unchanged with Japan up 0.5%
  • US Futures: Dow down 223 Nasdaq down 124

Stocks on the Move

  • MGX +10.31% iron ore play.
  • IAG +4.18% better on results.
  • DGL +3.01% broker upgrade.
  • SDR +1.61% travel exposure.
  • FLT +1.46% WEB +0.33% travel winners.
  • IHL +20.45% volatility continues.
  • BOC +122.50% news report on mine reopening.
  • HZR +12.63% MOU for low carbon hydrogen in Canada.
  • MAM +6.47% results announcement.
  • TBN +6.45% change of director’s interest.
  • BCB +5.15% First Bluff mine sales contracts confirmed
  • ACW +4.17% XanaMIA Part A trial results expected in April.
  • TOY -7.41% not us.
  • MMM -5.13% fails to deliver again.
  • KCN -10.81% Thailand update. TAFTA delayed to year-end.
  • CTT -7.99% book squaring.
  • 360 -6.90% tech falls.
  • DUB -6.39% tech falls.
  • SQ2 -6.68% Affirm crashes. Default worries.
  • CNB -11.29% Nil Desperandum results.
  • Speculative stock of the Day: Itech Minerals (ITM) +25.00% AXE spin-off with drilling to begin for REE on Eyre Peninsula.

In the News

  • United Malt Group (UMG) – talked up a positive outlook for the second half of the year at its AGM. Capex spend is nearing the end of its peak cycle, with growth projects expected to deliver earnings uplift from FY23. Management said it was focused on leveraging improving market conditions whilst managing short term inflation pressures. Remains on track to deliver ~$30m in net EBITDA benefits by FY24.
  • Insurance Australia Group (IAG) – declares interim dividend of 6c. Upgraded gross written premium guidance and reaffirmed insurance margin guidance of 10-12%
  • Baby Bunting Group (BBN) – first-half Pro-forma profit $12.5m vs year-ago $10.8m. Revenue $239.1m vs year-ago $217.3m. Supply chain provided to be resilient with high in-stock availability. A dividend of 6.6c was 13.8% higher vs a year ago. 2-3 stores are expected to open during the second half. No guidance due to COVID uncertainty.
  • Medibank Private (MPL) – to buy into Cura Group day hospitals according to media reports. A 70% stake was sold in 2017 for an estimated $400m.
  • Optus hires former NSW premier Gladys Berejiklian.
  • ACCC case against the banks on cartel behaviour has collapsed.
  • Magellan Financial (MFG) – FUM fell $6.4bn (including market movements) from the end of January to 9th February. Chris Mackay updates the market with fightin’ words. Whatever it takes.
  • Wesfarmers (WES) – ACCC gives API takeover green light.
  • Kathmandu (KMD) – said same-store sales grew 15.1% for the three months to January 31. US Oboz hiking boot business has suffered badly from limited stock from Vietnam. Supply chain issues.

Economic News/Bond Markets

Philip Lowe spoke this morning giving his Testimony to the House of Representatives – here are the bullet points:

Estimate that GDP increased by around 5% over 2021 and are expecting GDP growth of around 4¼% over 2022 and 2% over 2023.

  • The board is prepared to be patient.
  • There is a risk to waiting but there is also a risk to moving too early.
  • Main source of uncertainty about the outlook continues to be COVID-19
  • Sharp pick-up in inflation in parts of the world, especially in the United States, has come as a surprise.
  • Too early to conclude that inflation is sustainably in the target range.
  • We expect a further lift in underlying inflation.
  • Further pick-up in overall wages growth is expected.
  • It is entirely possible that countries with higher inflation rates will need a bigger adjustment in interest rates than currently anticipated.
  • Going to wait until see evidence that inflation has picked up in a sustainable way.
  • Plausible could raise rates later this year depending on economy.
  • Acceptable to run the risk of inflation being above 3% for some time.

Winter Olympics 

  • Scotty James wins silver

Asian Markets

  • South Korea’s US$200bn sovereign wealth fund plans to boost investments in Silicon Valley startups as it looks to the metaverse and artificial-intelligence and boost its expansion into alternative assets.

US and Europeans News

  • Goldman Sachs economists now expect the Federal Reserve to raise interest rates seven times this year to contain rising U.S. inflation, a change from the five hikes they had seen earlier.
  • US State Department gives green light to selling 36 new F-15EX fighters to Indonesia.
  • Russia describes meeting with UK Foreign secretary as a dialogue of a mute person with a deaf person. Not sure that is very PC at all.
  • Peabody reports its highest profits in decades as coal price rise and production increases.
  • UK’s head of Scotland Yard Cressida Dick has quit.
  • Macron plans another 6 nuclear reactors for France.
  • Biden says he would not send troops in to get citizens out of Ukraine.

And finally…Happy Birthday Mum XX