The ASX 200 fights back to a slightly positive close, up 14 points to 7065 (+0.2%) in a very dull day for a change. It was again a tale of two cities, Banks under pressure with the Big Bank Basket down to $181.69 (-1.2%). CBA down 0.2%, ANZ down 1.5% and WBC off 1.6%. NAB ex-dividend and some, falling 3.9%. MQG bounced slightly by 1.2% as insurers came under a little pressure. QBE down 1.1%, IAG down 1.3% and SUN setting 0.9%. ASX rallied 0.8% after pushing back its CHESS pieces, the healthcare sector better with CSL up another 2.1% with SHL up 1.3% and RMD rising 2.0%. REITs improved slightly GMG up 1.4%, GPT up 1.9% and CHC up 1.3%. Industrials were mixed, TLS down 0.5%, TCL up 0.1%, REA down 1.8% but mostly the sector becalmed. Resources better in places, iron ore stocks better, BHP up 1.4% and FMG rallying 2.3%, MIN also better up 2.9%. Some stability returned to the lithium sector as PLS rose 3.6%, AKE up 2.7% and LYC up 3.9%. Oil and gas stocks mixed, WPL down 0.8% and STO up 0.4%, coal eased too. Tech stocks slid slightly with XRO down 1% and CPU down 0.7%. The All-Tech Index fell 0.4%. In corporate news, CSR up 0.5% on its results, with trading revenue up 9%. GNC sold off 1% after numbers and LNK fell 15.1% on concerns about the bid with an ASX query revealing nothing new. Worries persist though. In economic news, consumer sentiment fell again to the lowest level since August 2020 as rates rose. Asian markets a little mixed, Japan down 0.6% 0.3%, China up 1.5% and HK up 1.6%. 10-year yields fell to 3.50%.

End of Day Podcast – Wednesday, May 11

Major Movers:

  • Winners: LIC, QAN, CCX, 360, AAC, AX1, NAN, JLG
  • Losers: LNK, 5EA, CHN, HLS, SSR, NAB, ZIP, PDL
  • Positive sectors: Iron ore. Healthcare. REITs.
  • Negative sectors: Banks. Telcos. Base metals.
  • High 7065 Low 6992.
  • Big Bank Basket: Down to $181.69(1.2%)
  • All-Tech index: Down 0.2%
  • Gold: Falls to $2643
  • Bitcoin: Rallies slightly US$31335
  • Aussie Dollar: Off lows to 69.56c
  • 10-Year Yield: fell to 3.50%
  • Asian markets: Japan down 0.6% 0.3%, China up 1.5% and HK up 1.6%.
  • US Futures: Dow up 53. Nasdaq up 90.

Stocks on the Move

  • LIC +15.09% broker upgrades following trading update.
  • 360 +6.40% rally continues.
  • MFG +0.76% New CEO and MD. David George is Ex Future fund. Should be a positive.
  • MNY +7.62% implementing an on-market share buyback of up to $15m
  • AX1 +6.2% change in substantial holdings.
  • JLG +5.34% bounces back a little.
  • COB +13.58% 4 Corners spotlight.
  • TEK +8.65% NTA 41.1c end of April.
  • HIO +15.38% volatility continues.
  • OPT +13.68% presentation at Retina World conference.
  • LNK -15.09% says not aware of any reason for the fall.
  • KMD -3.04% director retirement
  • NAB -3.93% ex dividend.
  • CHN -5.21% becomes a substantial shareholder.
  • SZL -9.41% falls continue.
  • Speculative stock of the Day: Galileo Mining (GAL) +217.5% major palladium discovery at Norseman. Significant palladium-platinum-gold-copper-nickel mineralisation over 33m. 33 metres @ 2.00 g/t  (1.64 g/t Pd, 0.28 g/t Pt, 0.09 g/t Au), 0.32% Cu & 0.30% Ni from 144m.

In the News

  • CSR (CSR) – full-year results. Building products segment is well-positioned to continue to grow. The company’s trading revenue of $2.3bn was up 9%, with earnings before interest and tax climbing 22% on the prior year to $291m.
  • GrainCorp (GNC) – EBITDA of $427m for the half-year ended March 31, up from $140m in the prior corresponding period. Net profit after tax rose to $246m from $51m a year ago.
  • GPT Group Holdings (GPT) said it is well placed to deliver on earnings and distribution growth in 2022.
  • ASX – confirmed the April 2023 “go-live” date of its CHESS replacement project is no longer viable. New “go-live date would be determined after further planning with its technology partner and input from stakeholders”.
  • Internal Diagnostics (IDX) – has agreed to acquire Exact Radiology for an upfront purchase consideration of $37.5m. Internal Diagnostics also said the acquisition delivers projected FY22 pro forma EBITDA of $5.25m

Best and Worst

Economic news/Bond Markets

  • New Zealand will fully reopen its border two months early, allowing the arrival of tourists, students and migrants from non visa-waiver countries like China and India.
  • The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 5.6% to 90.4 in May, from 95.8 in April. The index is now at its lowest level since August 2020.
  • While all major state indexes saw declines, the largest was in Queensland (–22%) which was coming off a very positive 154.8 in April. Falls in other states were more modest – Victoria (–6.2%); NSW (–4.5%) and WA (–5.4%). The indexes in Victoria (112.7) and NSW (116.9) are now well below the national average (121.41).
  • All eyes are on TerraUSD, an algorithmic stablecoin that’s supposed to maintain a one-to-one ratio to the dollar. It has lost the peg and was trading at about 80 U.S. cents. Stablecoins are key parts of the plumbing in the crypto market. Yellen calling for Stablecoin regulations.

Asian Markets

  • A study reveals that China risks 1.6m deaths if the country abandons its Covid Zero policy. Shanghai reported a 51% drop in new coronavirus infections on Tuesday, with zero cases found in the community.
  • Chinese PPI 8% Y/Y higher than the 7.7% expected. CPI up 2.1% Y/Y against forecasts of 1.8%. Non food prices up 2.2% Ful prices up 28%. Food prices up 1.9%. Vegetables up 24%. Pork prices continued to fall, plunging 33.3%.
  • Core CPI, which excludes volatile food and energy prices, rose 0.9%, compared to March’s 1.1% increase.
  • Toyota shares fell the most in two months after the carmaker forecast a lower operating profit in the current year citing an “unprecedented” rise in costs for logistics and raw materials.

US and European Headlines

  • Musk says Trump is welcome back on Twitter.
  • German Inflation numbers out: April Final CPI up 7.4% Y/Y. ECB way behind the curve.
  • One ECB official says rates will rise this summer.
  • Economist Lisa Cook will be the first black woman on the Federal Reserve board of governors after winning Senate confirmation with VP Harris breaking the 50:50 deadlock.
  • President Biden said Republicans would worsen inflation and raise taxes on American families, part of an effort to cast the GOP as obstructing his agenda and fixated on culture wars instead of governing.
  • Philip Morris is bidding for Swedish Match, now aiming to be smoke free company by 2025.
  • Finally consider this, jet fuel prices in the US are up 178% in a year. 146% in Europe. Demand is skyrocketing as are costs and staff issues remain.

And finally….