The ASX 200 rallied from extreme lows finding support at 7000 closing down only 70 points at 7051 (-1.0%). A decent turnaround after falling over 170 points shortly after the opening. Good close too. Selective buying emerged in some tech stocks and industrials, WTC rallied 4.1% and XRO finding friends rising 4.2%. The All-Tech Index slightly positive despite an 8.5% fall in SQ2. CSL was better but other healthcare stocks remain under pressure with RHC down 2.0% as AustralianSuper pulled out of a KKR bid. Banks slightly on the nose again with the Big Bank Basket down to $183.92 (-0.6%). The Big four banks made $14bn combined cash profits in the first half, back to pre CV19 levels. The cash machine continues. NAB up 0.3% ahead of the ex-dividend tomorrow and CBA off 0.9%. MQG steadied at lower levels down only 1.1% with insurers doing ok. QBE up 0.7%. Industrials mixed, TLS fell 1.3% with some bounces in REITs with GMG up 0.3%. Resources under pressure as was the AUD as China’s growth worries continue. BHP fell 2.6%, FMG off 2.7% and RIO down 3.6% with iron ore second liners like MGX down 3.1%. Gold miners fell, NCM down 3.6% and NST off 3.6%. S32 hit hard by 3.5% as were other base metal and lithium stocks but off lows, energy stocks fell with STO down 1.7% and WPL off 2.6%. Coal stocks too under pressure as WHC fell 1.8% and SMR down 2.4%. In corporate news, PDL rose 8.1% on a very respectable set of numbers. IMU up 3.1% on moving to Phase II trials, AUB returned from its capital raise, ex entitlement and fell 9.9%, JLG got walloped down 16.6%, not sure of reason. In economic news, retail sales were better than expected with cafes and restaurants in demand. Asian markets weaker with Japan down 0.9%, HK down 2.4% and China actually up 0.7%. 10-year yields steady at 3.55%.

End of Day Podcast – Tuesday, May 10

Major Movers: 

  • Winners: PNV, PDL, TPW, 360, ABB, IRE, REA, IEL
  • Losers: BRN, JLG, MLX, ABB, SQ2, 5EA, SQ2, JRV
  • Positive sectors: Tech. Insurers.
  • Negative sectors: Banks. Resources. Energy. Healthcare.
  • High 7081 Low 6940. Good bounce off its lows.
  • Big Bank Basket: Down to $183.92(0.6%)
  • All-Tech index: Up slightly. 0.4%
  • Gold: Steady at $2668
  • Bitcoin: Drops to US$31365
  • Aussie Dollar: Falls to 69.74c
  • 10-year yields: Steady at 3.55%.
  • Asian markets: Weaker with Japan down 0.9%, HK down 2.4% and China actually up 0.7%.
  • US Futures: Dow up 212. Nasdaq up 144.

Stocks on the Move

  • PNV +15.59% director buying and CEO update.
  • PDL +8.11% very good results.
  • 360 +5.81% TPW +6.65% tech rally starting?
  • ABB +5.76% bargain hunters abound.
  • BMT +17.65% signs US$7m 5-year contract for RippleDown
  • IMU +3.12% ethics approval for phase II trial.
  • JLG -15.59% not sure why. Maybe broker downgrade.
  • BRN -15.70% rally unwind.
  • AUB -9.91% ex entitlement after cap raise.
  • SQ2 -8.53% just because.
  • PWH -7.29% catch up selling.
  • Speculative stock of the Day:  Group 6 Metals (G6M) +20.00% only speculative stock with volume but no reason except recent presentation at RIU Sydney on 3rd May.

In the News

  • Ramsay Healthcare (RHC) – AustralianSuper no longer in talks with KKR regarding a potential stake, with property portfolio the focus.
  • Suncorp (SUN) upgraded to overweight from neutral at JPMorgan.
  • Lifestyle Communities (LIC)reaffirms its FY22-FY24 forecast to deliver 1,100-1,300 new home settlements and 450-550 resale settlements
  • Pendal (PDL) first-half underlying profit $131.4m vs consensus $109.9m. Interim dividend would rise to 21c from 17c in the year-earlier period. Earnings per share jumped a third to 34.3c a share.
  • Atlas Arterial (ALX) -needs to restructure its US toll road to free up cash. Although traffic on the US road has been improving since the outbreak of the pandemic, it remained 36.3% lower in the three months ending in March compared with the same period in 2019. quarterly traffic on French road Autoroutes Paris-Rhin-Rhone (APRR), which contributes most of its income, was up 2.9% on pre covid levels.
  • Electric Optic Systems (EOS) -announced the successful qualification of its directed energy drone defence system. The system can defend against emerging threats from swarm drone attacks.
  • Ampol (ALD) – completes acquisition of Z Energy. Zed’s dead baby.

Economic News/Bond Markets

  • Retail sales in the first quarter rose an inflation-adjusted 1.2% from the previous quarter, beating analysts’ forecasts of 1%. Sales gained 4.9% year-on-year to a record $93.19bn with cafes, restaurants and takeaway food services showing the biggest rise.

Asian Markets

  • The Hang Seng Tech Index plunged as much as 7% early Tuesday. Inc. and Kuaishou Technology were among the biggest drags.

US and European Headlines

  • Bayer results beats expectations. Group sales up 14.3% for Q1.
  • EU drops plans to ban shipping of Russian crude in face of opposition.
  • Last night a 58-year-old silkscreen by Andy Warhol sold at Christie’s for a record US$195m. It became the most expensive 20th-century artwork to ever sell at auction. The painting, Shot Sage Blue Marilyn, was created by Warhol in 1964.
  • World on course to breach 1.5C warming threshold within five years.
  • Gay dating app Grindr to go public in SPAC deal.
  • Cathie Wood is coming back to earth with a thud.The ARRK has sprung a leak.
And finally….