The ASX 200 fell hard again after a rally was snuffed out early morning. The ASX 200 fell 124 points to 6941 (-1.8%) Resources tried to hold up in the big miners but threw in the towel with BHP down 1.6% and FMG down 2.8%. Gold miners fell with NCM down 0.6% despite AUD gold prices barely changing recently. Lithium stocks again in the shorters sights, PLS down 6.5% and MIN off 2.1%. Even oil and gas stocks saw selling again as WPL fell 2.1% and STO down 3.1%. Old King Coal not so merry, WHC off 2.8% and NHC down 3.3%. The tech wreck continues. CPU fell 2.0% with XRO results colouring the sector, after a fall of 11.6%. ALU tumbled 16.7%. SQ2 collapsed 17.6% as a big holder of crypto crapto. Other BNPL stocks falling away again as more regulation called for. The All-Tech Index was woeful down 6.6%. Industrials were weak, ALL down 3.9%, IEL down 9.2%, COL down 1.5% and TWE off 3.5%. REITs back on the nose., GMG down 3.0%, GPT down 4.4% and healthcare falling hard as CSL dropped 1.8%. Banks were the one oasis in a red desert with NAB and CBA gaining as cream rises to the top. CBA results cheered and drew buyers. The Big Bank Basket up to $181.92  In corporate news, good results from ORI with the stock exploding 4.7% higher. RED up 5.8% on news of production from KOTH. CSL fell % on news that the Vifor deal may take longer. On the economic front, building approvals approved fell 18.5%. Asian markets fell slightly. 10-year yields down a little.

End of Day Podcast – Thursday, May 12

Major Movers:

  • Winners: JDO, RED, ORI, HSN, RMC, ACL, OMH
  • Losers: SQ2, ALU, 360, SYA, XRO, TLX, FCL, NVX
  • Positive sectors: Banks.
  • Negative sectors: Everything else.
  • High 7063 Low 6930. Closes below 7000 for first time since March.
  • Big Bank Basket: Up to $181.92
  • All-Tech index: Down 6.7%
  • Gold: Higher again as AUD falls – $2688
  • Bitcoin: Crashes to US$27047.
  • Aussie Dollar: Off lows to 68.81c.  
  • 10-Year Yields: Fell to 3.43%
  • Asian markets: Japan down 1.2%, China down 0.6% and HK down 2.4%.
  • US Futures: Dow down 107. Nasdaq down 18

Stocks on the Mov

  • JDO +5.85% brokers warming to this one.
  • ORI +4.66% half yearly results cheer.
  • RED +5.80% Ore processing underway at KOTH.
  • HSN +3.14% going against the trend.
  • IHL +9.59% APIRx acquisition presentation.
  • ATA +6.92% trading update.
  • CAE +5.77% exceptional width and grade at Hole 10.
  • CTT -14.95% falls continue.
  • GAL -22.83% profit taking.
  • AX1 –4.74% Director buying.
  • MBH -13.04% profit downgrade.
  • ABY -12.80% rout continues.
  • SQ2 -17.61% another chip off the old block.
  • ALU -16.69% director bought 2,000 shares.
  • CSR -9.62% broker downgrades.
  • IEL -9.15% arrival numbers.
  • MP1 -9.74% tech hits.
  • 360 -12.03% profit taking.
  • XRO -11.58% cost increases.
  • MNY -9.58% goodbye bounce.
  • Speculative stock of the Day:  Nothing on volume but Midway (MWY) +19.08% on sale of its plantation estate and greenfield commitment.

In the News

  • CBA (CBA) unaudited cash profit $2.4bn in Q3. Expenses down 2%. Income down 1%, cited margin pressure from mix effects and competition. Not unexpected given the commentary from the other big banks. Compared to the March quarter of last year, CBA grew home lending by 8.5%, household deposits by 13.5%, business lending by 12.6% and business deposits by 13.5%.
  • Xero (XRO) FY NPAT -NZ$9.1m vs consensus -NZ$2.2m. Flags higher expenses in FY23. Net loss of $8.3m for the year compared with a profit of $17.9m.
  • Orica (XRO) H1 underlying NPAT (ex-items) $129.2m vs consensus $108.4m. Unfranked dividend of 13c per ordinary share, representing a payout ratio of 41%.
  • CSL has pushed out the timeline for its takeover of Swiss group Vifor Pharma, which it initially anticipated closing by June.
  • Viva Energy (VEA) – Earnings before interest, tax, depreciation and amortisation for the first four months of the year touched $308m, two thirds higher than the same period a year ago, the company said.

Economic News/Bond Markets

Building Approvals

  • The seasonally adjusted estimate for total dwellings approved fell 18.5%.
  • Private sector houses fell 3.0%, while private sector dwellings excluding houses fell 29.9%.
  • The value of non-residential building approved fell 0.8%.

Overseas arrivals and departures

  • Arrivals: 374,630 – a monthly increase of 103,370 trips.
  • Departures: 335,240 – a monthly increase of 158,980 trips.
  • New Zealand inflation expectations rose further in the second quarter. Two-year ahead inflation expectations rose to a fresh 31-year high of 3.29% from 3.27% in the first quarter, the RBNZ says.
  • Crypto ETFs kicked off today. Lukewarm at best. The Cosmos Purpose Bitcoin Access ETF and ETFS 21Shares Bitcoin ETF each experienced trading volumes of about $250,000 in the first hour of trade on Thursday, while the ETFS 21Shares Ethereum ETF experienced volumes of about $150,000.

Asian Markets

  • The PBoC is making stabilizing economic growth a top priority and will step up support for weak sectors.
  • Subaru plans to invest around US$1.9bn on electric-vehicle battery capacity over the next five years and will add an EV production line to its main factory in Gunma in Japan. The country’s EV penetration rate is barely 1% with Honda planning a big spend and Toyota investing US$624m in India to make EV components. Subaru, which makes almost 70% of its sales in the US, aims to have 40% of new global car sales be electric by 2030.
  • China’s tightening Covid rules and extended lockdowns are making a 2020-style V-shaped economic recovery a dim possibility this time around. Currently, areas making up only about 30% of gross domestic product are under full or partial lockdown.

US and European Headlines

  • The US has a baby formula shortage as supply chains and recalls are taking their toll. A2M chance to shine? The Biden administration has also made formula availability a “top priority.”
  • EU threatens retaliation if UK ditches N Ireland protocol.
  • European markets looking to open around 1.8% lower.
  • UK March GDP down 0.1% M/M. Economy shrinks.
  • Grocery delivery app Instacart submits confidential filing to go public.
  • US Household debt hits US$16 trillion.

And finally….