The ASX 200 rallied off early lows closing up 20 points at 7105 (+0.3%). Early losses following US leads were soaked up by miners and resources stocks. Iron ore stocks in demand, BHP up 3.8% and RIO rising 4.6%. BHP was 27 index points alone. Gold miners were better but hardly spectacular, NCM up 1.1% and EVN up 3.2%, which did not apply to oil and gas, STO up 6.2% and WPL up 6.1%. Small rises for lithium stocks and coal up with CRN flying 8.8% higher, WHC up 5.9% and YAL better by 7.0%.  Banks sagged as bond yields fell, the Big Bank Basket fell to $171.89 (-0.8%). MQG lost 1.9% and insurers under serious pressure with QBE down 4.1% and IAG off 4.4%. Floods probably not helping share prices. Healthcare slipped slightly with CSL off 0.1% and SHL down 1.3%. Industrials were flat, ALL a loser down 3.0% and TLS ex-dividend 6c, Tech stocks down as CPU fell 1.4% with the All-Tech Index down 0.4%. SQ2 off 0.7% and EML off 4.1% with yesterday’s gains in PBH, given back by 11.8%. Travel stocks also under a little pressure, QAN down 1.0% and WEB off 2.9%. In corporate news, CXO up 15.2% after a deal with Tesla, MVP rose 31.7% on a green whistle green light and we saw GDP on the economic front of 3.4%. 10-year yields crash to 2.09%. Asian markets weaker with Japan down 1.7%, HK off 1% and China down 0.4%.

End of Day Podcast – Wednesday, March 2

Major Movers:

  • Winners: CXO, 88E, IHL, CRN, NV, YAL, GRR, STO
  • Losers: PBH, 5EA, JHG, MFG, DDR, ASM, VUK
  • Positive sectors: Iron ore. Gold miners. Energy. Base Metals
  • Negative sectors: Banks. Insurers. REITs. Industrials. Tech
  • High 7122 Low 7042.
  • 10-year yields crash to 2.09%
  • GDP beats expectations. Brent crude now above US$110. OPEC plus looms.
  • Big Bank Basket: fell to $171.89 (-0.8%)
  • All-Tech index: Down 0.4%
  • Gold: Steady at $2626.
  • Bitcoin: Steady at US$43,329
  • Aussie Dollar:  Rising to 72.67c 
  • Asian markets weaker with Japan down 1.7%, HK off 1% and China down 0.4%
  • US Futures: Dow up 122 Nasdaq up 58. US 10-year yields now 1.74%

Stocks on the Move

  • CXO +15.15% signs offtake deal with Tesla.
  • 88E +13.04% crude rises.
  • PNV+7.27% AVH look through perhaps.
  • YAL +7.00% CRN +8.82% coal rise.
  • GRR +6.47% pushed higher again on iron ore rises.
  • S32 +5.89% base metal poster child.
  • MVP +31.67% green whistle pain relief gets FDA trial clearance. 2 years from year end.
  • RHY +8.09% investor presentation.
  • COB +20.65% grant of Australian major project status.
  • TIG -12.50% underwhelms.
  • SZL -8.21% Z1P falls continue down 5.8%.
  • TNT -8.11% cyber talk declines.
  • PBH -11.75% the lord giveth the lord taketh away.
  • MFG – 6.43% the going just got tougher.
  • DDR -6.27% profit taking.
  • JHG -7.30% fund managers under pressure.
  • IPO of the Day 5EA -7.80% Flagship project Fort Cady in Southern California.
  • Speculative stock of the Day: Metals Australia (MLS) +66.04% good volume too on outstanding lithium and Rubidium rock chip results for Manindi project.

In the News

  • Sigma (SIG) upgrades earnings guidance. Expects underlying EBITDA to be up 10-15% on last year vs previous guidance provided of a ~10% fall. Management said the upgrade reflected “the evolving COVID-19 environment and the sudden increased demand for rapid antigen tests.”
  • APM Human Services International (APM) – Posted a strong quarter across all states and achieved the highest star rating of the top 10 performers in the sector, which Credit Suisse believes will help them secure contracts. Credit Suisse and UBS say outperform and buy respectively, with an average target price of 375c, a 25.8% upside implied.
  • Kathmandu (KMD) to change its name to KMD Brands.
  • Telix Pharmaceuticals (TLX) to scrap its share purchase plan at 770c, blaming challenging market conditions.
  • Core Lithium (CXO) – it has signed a deal to supply up to 110,000 dry metric tonnes of spodumene concentrate to Tesla at a market referenced pricing. The deal is scheduled to commence from the second half of 2023.
  • Damstra Holdings (DTC) – has been appointed as technology partner for the $15.8bn North East Link project, to be delivered by the Spark Consortium.
  • Peter Wade has retired as non-executive chairman of Mineral Resources (MIN) and from the company’s board.

Economic News/Bond Markets

  • The value of the average mortgage for an owner-occupier hit a record $635,600 in January up from less than $200k in 2002.
  • GDP up 3.4% in the December quarter, ahead of estimates of 3.3%. A strong rebound from the 1.9% drop in the previous quarter. Domestic demand drove the growth this quarter according to the ABS with high levels of household spending, particularly in the states that emerged from COVID-19 lockdowns. The rise in household consumption was partly offset by a 1.4% fall in private investment.
  • Growth was strongest in the States most affected by Delta wave restrictions. As restrictions eased, New South Wales (6.7%), Victoria (3.7%) and the Australian Capital Territory (1.9%) saw the strongest growth in demand in the December quarter. 
  • Recovery in wage growth slowed. The Wage Price Index grew 0.7% during the December quarter and was 2.3% higher than at the same time last year. Wage growth during the quarter ranged from 0.3% for education staff to 1.2% for retail workers.
  • Domestic price pressures continued to build. Consumer prices rose 1.3% during the December quarter and were 3.5% higher than the same time last year. The largest price increases during the quarter were for new dwellings and petrol.

Asian Markets

  • ANZ says that Russia may own US$140bn worth of Chinese bonds. Everything is connected.
  • China holds talks with Ukraine as it edges away from Putin. They also acknowledged the conflict was a “war,” rather than a “special military operation” as described by Russia.
  • Lockdowns loom in HK as shelves emptied.
  • Rusal down 21% in HK trade.

US and European News

  • European markets set to open flat.
  • OPEC will meet today to decide production quotas, but expectations are muted about the group’s ability to cool prices.
  • Biden’s SOTU address. Stands with Ukraine but for now, a long way back. No boots or troops.
  • Sberbank (Russian) will be leaving the European markets.
  • Biden bans Russian aircraft in US skies.
  • Oil news, OPEC plus tonight and Biden coordinate release of 60m barrels of oil from reserves.
  • Apple pulls out of Russia. Crypto exchanges resist calls to ban Russian trades.

And finally….