The ASX 200 gives back early gains to close down 12 at 7305 (-0.2%) as resources/tech came under pressure. Miners suffering as the market remains cautious ahead of the Fed verdict tonight. Banks got a boost from ANZ  results which could have been a lot worse, with CBA up 0.7% and NAB up 1%. NAB results tomorrow and the Big Bank Basket closed at $186.87 (+0.7%). MQG rallied 0.6% with insurers slightly better. Industrials mixed, REITs once again under pressure as bond yields move higher again. GMG unravelling, down 2.4%, with SCG down 1.1% and MGR down 3.0%. TCL continuing 1.4% higher as the ‘tarmac tech’ stock, TLS better by 0.3% and CSL up 0.7% in healthcare. RMD still under pressure down 1.6% and FPH down 0.4%. Travel stocks eased with FLT down 6.7% and WEB down 2.5%. Tech stocks holding up better in the leaders but in second liners once again sellers have the upper hand. CPU up 1.8% after a dismal day yesterday, the All-Tech Index down 1.3%. In the miners, LME prices weighed on the sector with China still on its holidays, BHP dropped 0.6%, FMG down another 2.4% and S32 off 2.7%. Lithium stocks depressed again, PLS down 0.8% and AVZ off 19.2% on a mining licence agreement in the DRC. Oil and gas stocks better, ALD up 1.9% and STO rallying 1.1%. In corporate news, plenty of updates and guidance as the Macquarie Australia Conference continues. FLT fell 6.7% on its update, the media companies firmed on the outlook and ANZ results were slightly ‘less worse’ than expectedclosing up 0.4%. On the economic front, retail sales came in better than economists had forecast at 1.6%. Asian markets weaker with Japan and China still closed. 10-year yields at 3.55%

End of Day Podcast – Wednesday, May 4

Major Movers:

  • Winners: REG, OML, SSM, HUB, ORA, VUK
  • Losers: AVZ, SYA, ARB, HIO, ZIP, LIC, TPW
  • Positive sectors: Banks. Insurers. Energy.
  • Negative sectors: Miners. REITs. Tech.
  • High 7367 Low 7300.
  • Big Bank Basket: Rises to $186.87 (+0.7%)
  • All-Tech index: Down 1.3%
  • Gold: Slightly higher to $2622
  • Bitcoin: Softer at US$38018
  • Aussie Dollar: Steady at 71.20c on RBA.
  • 10-Year Yield: Rallies to 3.55%
  • In Asia: most markets closed for a holiday still.
  • US Futures: Dow up 32 Nasdaq up 2

Stocks on the Move

  • SSR +4.35% Q1 results.
  • OML +4.40% conference presentation.
  • MGX +2.86% one of the few resource stocks up.
  • HUB +3.89% buying continues.
  • AUC +6.56% becoming a substantial shareholder.
  • ELO +3.31% Mr Blue Sky business update.
  • RXM +2.17% corporate presentation.
  • NC1 -22.10% dives.
  • DRO -15.25% profit taking.
  • ARB -11.18% shocked with market update.
  • ZIP -10.82% undone.
  • TPW -7.04% set to enter DIY market.
  • FLT -6.65% business update.
  • VUL -6.63% sell off continues.
  • AVZ -19.19% fails to fire after being granted mining licence in DRC.
  • IPO of the Day – Equity Story (EQS) -17.14 % second day not great.
  • Speculative stock of the Day:  Altamin (AZI) +37.50% permitting update for lithium in brine applications.

In the News

  • Champion Iron (CIA) completes first rail shipment from Bloom Lake phase II expansion project
  • JB Hi-Fi (JBH) – Q3 sales update; continues to see heightened customer demand and strong sales growth
  • Nick Scali (NCK) – trading update; written sales orders for four months to April are $182.2m, +36.5% y/y
  • oOh!media (OML) – trading update; Q1 revenues growth of +15% y/y
  • Nearmap (NEA) refines guidance to the top of the estimate. Expects FY22 closing ACV $155-160m vs prior range A$150-160M
  • Flight Centre (FLT) reports March underlying EBITDA of $8m; notes recovery underway. Currently expecting continued recovery & overall EBITDA profit during five months to June 30 – significant turnaround after $184m underlying EBITDA loss during FY22 1H & subdued January
  • Austal (ASB) awarded $230.5m US Navy contract modification
  • Amcor (AMC) reports 9-month EPS 56c ex-items vs year-ago 52c. 12c quarterly dividend declared.
  • Australia New Zealand Bank (ANZ) – reported $3.1bn cash profit, up 4%. 72 c dividend. NIM fell to 1.58% from 1.65%.
  • Nine Entertainment (NEC) has reported at the Macquarie Conference that it expected FY22 EBITDA to show growth of more than 22% compared to FY21. NEC said it continued to gain share in a recovering radio ad market, with radio EBITDA in the second half of FY22 expected to be higher than in the first half.
  • Seven West Media (SWM) has upgraded its expectations for earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2021-22 financial year from previous guidance of between $315m and $325m to between $335m and $340m. Cost guidance unchanged.
  • HUM reported third quarter transaction volume of $871.1m, up 31%. 2.73m total customers but lower than Xmas as a run-off in legacy cards took its toll.
  • Temple & Webster (TPW) reported solid trading in the second half of the 2022 financial year, which was in line with management’s expectations. Y/Y revenue growth of 23% for the period January 1 to April 30, compared to the same period in last year, and up 116% compared to 2020. It also also reaffirmed its full-year EBITDA margin range of 2-4%.

Economic News/Bond Markets

  • Retail trade numbers better than expected.
  • The value of new housing loan commitments rose 1.6% to $33.3bn in March 2022 (seasonally adjusted). This followed a fall of 3.5% in February, after reaching a record high of $33.9bn in January.
  • Annual increases in living costs ranged between 3.8% for Employee households and 4.9% for Age pensioner households in the March 2022 quarter, according to data released today by the Australian Bureau of Statistics (ABS). The increase in living costs for Age pensioner households is the highest since the September 2006 quarter.
  • Macquarie’s Victor Shvets says central banks will be forced into a dramatic “back pedal” and will consider cutting rates within 12 months as markets expect policy rates to peak.
  • Economists at the four major banks agree the cash rate will exceed 1% by Melbourne Cup day. Westpac is the most bullish over 2022, forecasting a supersized move of 40bps in June, on the way to a benchmark rate of 1.75% by year-end.

Asian Markets

  • North Korea launches another ballistic Missile.
  • China and Japan remain closed.
  • The Hang Seng Tech Index dropped as much as 2.8% on Wednesday, on track for its second day of declines.
  • Yum China warns hit from Covid lockdowns worse than initial outbreak.

US and European Markets

  • All about the Fed tonight. 50bps the most likely move.
  • EU bans all Russian oil .
  • Record 4.5m US workers quit jobs in March as labour market tightens.
  • The White House is giving renewed consideration to the potential move, to ease tariffs on goods from China which has divided members of the administration over the impact on the economy and other trade-policy goals.
  • Biogen CEO Michel Vounatsos’s will resign as the company attempts to chart a new course following Medicare’s refusal to cover its new Alzheimer’s drug Aduhelm.
  • Airbnb said it expects to post its first full-year net profit this year after its revenue climbed 70% last quarter as people continued to book rentals despite hosts raising prices.
  •  Elon Musk says he could stage an initial public offering for the Twitter within three years of its acquisition. Musk says Twitter will always be free for casual users but government and commercial enterprises may have to pay. He aims to get rid of the trolls and bots. Not sure what is left.

And finally….