The ASX 200 kicked off a crucial week down 88 points at 7347 (-1.2%). A late rally helped lift it off the lows.  Nowhere to run, nowhere to hide as the market followed the SPI futures into heavy losses. Industrials and tech took a hit with CSL down 1.0%, SHL down 1.9% and RHC off 1.3%. GMG took a tumble in the REITs falling 7.2%, SCG down 2.7% ahead of RBA meeting. Consumer stocks eased back, TLS down 7.2%, WES off 1.0% and WOW down 0.6%. Tech slumped with XRO down 6.6% and WTC falling 7.3%. The All Tech Index falling 4.0%. The banks were modestly weaker as we await the Killing Season, ANZ first unchanged, CBA fell 0.9% and NAB down 1.0% with MQG in negative territory down 1.8%. Insurers also fell with QBE down 2.4%. The Big Bank Basket fell to $186.47 (0.65%) Resource stocks showed pockets of resistance with RIO up 0.7% and FMG better by 0.1%, BHP fell 0.1% though with lithium and base metal stocks under pressure. PLS down 6.7%, IGO off 5.6% and MIN down 2.6%. Gold miners slid too, NCM down 0.9% and NST off 2.1%. In corporate news, QAN announced a new 12 plane order to be able to fly non-stop to London in 2025. PPC rose 5.0% after an earnings update and ABB was poleaxed by an update falling 28.1% with IMU not far behind after termination of its supply agreement. In economic news, the local PMI improved 2.8 points to 58.5 in April, 10-year yields rose to 3.25%. Asian markets closed.

End of Day Podcast – Monday, May 2

Major Movers:

  • Winners: HIO, PBH, PPC, SSM, BLY, ALK, QAN
  • Losers: ABB, IMU, PME, ARU, NMT, INR, CCX, WTC
  • Positive sectors: None.
  • Negative sectors: Industrials. Tech. Banks. Lithium and base metals.
  • High 7423 Low 7302. Closes well off lows as US futures rally slig
  • Big Bank Basket: Eases to $186.47 (0.65%)
  • All-Tech index: Down 4%
  • Gold: Better at $2682
  • Bitcoin: Softer at US$38,855
  • Aussie Dollar: Better at 70.50c
  • 10-Year Yield: Rallies to 3.25%
  • In Asia, most markets closed for a holiday.
  • US Futures: Dow up 167 Nasdaq up 52

Stocks on the Move

  • PPC +4.95% earnings upgrade.
  • PBH +5.67% broker upgrades.
  • QAN +2.86% new planes and non-stop flights to London by 2025.
  • ALK +2.94% Roswell Mineral resource up 37%.
  • HIO +18.79% buyers chase following quarterly.
  • AZY +9.30% Minyari Dome gold resource increases 250% to 1.8Moz.
  • ART +10.64% looks like a broker upgrade.
  • BRL +5.58% Crown Mountain EA application submitted.
  • ABB -28.06% disappointing business update.
  • IMU -13.64% termination of supply agreement.
  • PAN -4.48% profit taking.
  • GMG -7.17% prices US$500m 10-year bonds.
  • INR -7.41% PLS -6.67% lithium depressed.
  • DTZ -6.58% quarterly activities report.
  • AIS -6.09% completion of placement.
  • PDI -8.16% profit taking.
  • HPG -5.69% renamed LoPages.
  • Speculative stock of the Day:  Biotron (BIT) +35.62% BIT225 effective in established SARS-CV19 in animals.

In the News

  • Telstra (TLS)Appoints Michael Ackland as CFO; effective 1 September
  • Qantas Airways (QAN) – Q3 trading update, domestic travel returning to pre-COVID levels ahead of expectations; guides H2 underlying EBITDA of $450-550m. Also announced the company is set to order 12 new planes as part of a major aircraft order.
  • Aussie Broadband (ABB) – expects total active broadband connections at 30 June 2022 to be in the range of 580,000 to 585,000, and full-year EBITDA (before transaction costs and excluding any contribution from Over the Wire) to be in the range of $27m to $28m. Overall broadband services increased by 11%.
  • Regional Express Holdings (REX) – Signs LOI with Delta Air Lines to enter into a ‘definitive commercial agreement’
  • AGL Energy (AGL) – Loy Yang A update; guides FY underlying NPAT $220-270m vs prior guidance $260-340m and FactSet $297.4m
  • National Australia Bank (NAB) – Enters an Enforceable Undertaking with AUSTRAC. NAB will implement a remedial action plan, which will see improvements to its systems, controls and record-keeping.
  • Liontown Resources (LTR) and LG Energy Solution execute a binding Offtake agreement.
  • Immugene (IMU) announced the termination of its supply agreement with MSD. IMU said it is continuing with its clinical trial to evaluate the safety and efficacy with the use of its HER-Vaxx, a B-cell activating immunotherapy in patients.
  • Peet (PPC) updated its earnings guidance for the 2022 financial year after strong operating performance which it attributed to favourable market conditions across Australia. It now expects operating profit after tax for the year ending June 30 to be in the range of $48m to $52m.

Economic News/Bond Markets

Former Reserve Bank of Australia economist Paul Bloxham is tipping the central bank will not raise interest rates on Tuesday.

  • Australia’s PMI improved 2.8 points to 58.5 in April, with a recovery in production balancing out falls in employment and new orders. Price pressure remained very elevated. A reading above 50 indicates expansion.
  • CoreLogic home price index improved 0.6% in April. Home prices are up 16.7% on a year ago in April although growth is slowing, down from 18.2% in March.
  • The Future Fund lost 1.5% in the three months to March 31, the biggest drop since the same period in 2020, causing its main fund to shrink to $201bn from $204bn

Asian Markets

  • Most Asian markets closed for May Day holidays.

US and European News

  • UK market closed for public holiday.
  • European futures showing losses of around 1.3% at the open.
  • German official says that sanctions will only be lifted after Russia withdraws its troops from Ukraine.
  • Warren Buffett’s right-hand man, Charlie Munger, says the ‘unraveling’ of the Robinhood effect after last year’s boom is a sign ‘God is getting just.’ Buffett says the markets have become a ‘gambling parlour’.

And finally….

Good to be back..