Beeks Downunder-Because not all financial news is boring!

Monday 11th April – Australian Market Wrap

April 11, 2022 4:45 pm

The ASX 200 finished flat up 7 point at 7485 after an early spurt was derailed by Chinese CPI numbers combined with 10-year yields heading above 3%. Resources were the swing as BHP turned down losing 0.5% with FMG off 2.9% as iron ore in Asia slipped. Gold miners held up as NCM rose 2.1% and NST up 3.9%. Energy stocks mixed, WPL down 1.0% and STO better by 0.8% with some profit taking in coal stocks. YAL fell 5.6%. Lithium stocks were in demand early on Musk news, but gains became more selective as the session wore on. LKE up 7.0% on a deal with Ford, Macquarie upgraded the sector again, but PLS failed to be inspired down 3.8%, MIN lost 3.3% more on iron ore, IGO rose 2.3% on its agreed deal with WSA that rose 5.5%. Banks were firm as always ahead of results and the 10-year yields burst above 3%. The Big Bank Basket rose to $191.78 (1.2%). MQG slid 0.9% and QBE enjoyed the rising yields up 1.8%. Industrials went sideways with some wins in COL and WOW as defensive inflation plays. Healthcare eased and tech slipped slightly with CPU up 0.7% and NXT down 2.5%. SQ2 down 2.3% and the All–Tech Index falling 0.6%. In corporate news, BSL made an acquisition of Coil Coatings for US$500m. PLS updated the market on its POSCO JV falling 3.8%. Nothing on the economic front but Chinese PPI and CPI surging squished the rally both here and in China. Asian markets weaker across the board. China down 2.4% and HK off 2.5%.

MAJOR MOVERS:

Winners: CXL, LKE, GNC, APM, MLX, GRR, MGX, WSA
Losers: ARU, AEF, WBT, AVZ, ASM, YAL, GLN
Positive sectors: Banks. Supermarkets. Gold miners.
Negative sectors: Big miners. Healthcare.
Hi 7525 Lo 7471. Narrow range.
Big Bank Basket: Up to $191.78. Solid 1.2% rise.
All-Tech index: Down 0.6%
Gold: Better at $2609
Bitcoin: Down to US$42180
Aussie Dollar: Steady at 74.46c 10-YEAR YIELD: Better at 3.01%.
In Asian trade, Japan down 0.8%, China down 2.4% and HK off 2.5%
US Futures: Dow down 110 Nasdaq down 72

STOCKS ON THE MOVE

LKE +6.99% signs deal with Ford.
GNC +6.75% broker upgrades.
WSA +5.48% IGO ups bid.
CXL +7.46% running hot.
MGX +5.74% GRR +5.79% iron ore plays.
RED +3.90% KOTH progresses.
AIZ +4.03% cabin doors to cross check.
BCB +8.77% coal mining commenced at Bluff.
NRZ +7.50% rally continues.
RAP +22.22% Pfizer bids 11.5c.
PDN -3.87% suspension of two state-owned Russian refiners
AEF -7.21% slip continues.
WBT -5.90% tech losing lustre.
AGY -4.00% profit taking.
NXM -17.24% deep diamond drilling disappoints.
NVA -10.53% sells Snow Lake and now fully funded for Mt Gox.
Speculative stock of the Day: 4DS +44.12% technical update. Successful elimination of etch residue.

IN THE NEWS

JB Hi-Fi (JBH) completes $250m off-market buyback, bought back 5.5m shares at $52.39.
Lake Resources (LKE) Lake Resources says it has signed a non-binding agreement with Ford Motor Company for delivery of about 25,000 tonnes of lithium per year from its Kachi lithium brine project in Argentina.
Brickworks (BKW) and Lion Selection Group (LSX) are ex-dividend today.
Virtus (VRT) has backed an improved takeover offer from UK private equity group CapVest worth 815c adjusted for dividend payments.
Worley (WOR) to appeal Full Federal Court class action judgement.
Gold Road Resources (GOR) repeats CY22 production guidance at investor presentation of 150-170Koz at an ASIC of $1,270-1,470/oz.
Independence Group (IGO) lifted its takeover bid for the gold and nickel miner Western Areas (WSA) by 15.2% from 336c to 387c.
Pfizer has made a $100m bid for ResApp (RAP). The bid is at a 27.8%premium to Friday’s closing price at 11.5¢ per share.
Bluescope Steel (BSL) a deal to buy metal painter Coil Coatings for $US500m($671m). The purchase is on around 8.9 times 2021 pro-forma EBITDA of $US56m and will be fully funded by cash reserves.

ECONOMIC NEWS/ BOND MARKETS

Quick Aide Memoire for Albo (might be worth learning this stuff)

The Budget projects that the Commonwealth government’s gross debt will be around $963bn at 30 June 2022. This is around 45.1% of GDP. It is projected to increase to $1.199bn,around 50% of GDP, by 30 June 2025.

Latest odds reflect Albo stumble. Only six weeks to go.

ASIAN MARKETS

Chinese inflation data was hotter than expected at 1.5% over the year vs 1.4% expected.

Producer prices rose 8.3% year on year, above the 8.1% expected.

US AND EUROPEAN NEWS

Europe facing early losess according to futures, following Asia lower.
UK Feb Industrial Output down 0.6% M/M v 0.7% up previously. Feb GDP up 0.1% M/M v 0.8% in January. Feb manufacturing output down 0.4% M/M v 0.8% up.
French elections now see Le Pen and Macron run off later this month. Low turnout of below 65%. No incumbent has won a second term in the last twenty years in France. Macron got around 28% of the vote compared with about 24% for Le Pen. Will be close.
The invasion of Ukraine will cause that country’s economy to contract by 45.1% according to the World Bank. Russia’s economy will fall by 11%.
EU still arguing over Russian oil ban. Hungary one of the hold outs.
Musk decides not to join Twitter board.

And finally…..