The ASX 200 fell 118 points to 7065 (-1.7%) after big falls in US markets. Well off lows and stable at these levels waiting for US markets to find some stability. Banks fell with the Big Bank Basket down to $183.39 (-1.7%). CBA down 1.0% and MQG falling 2.1%. Insurers eased back too with QBE down 1.7% and IAG off 1.7%. MFG fell another 3.9%. Industrials were weak with pockets of strength. Consumer stocks under pressure after the US retailers fessed up to margin pressures, SUL down 6.0%, JBH down 6.6% and WES down 7.8%. COL and WOW got bashed too for the same reason. WOW off 5.6% seems a little overdone. Telcos eased, healthcare was better as RHC rose 0.2% on KKR news confirming the bid is still live at $88. CSL up 0.3% but COH down 1.3%. Tech stocks under pressure again. XRO fell 3.1%, WTC down 1.6% and CPU off 3.2% with the AllTech Index down 2.7%. Resources were hit too, iron ore fell, and BHP dropped 1.7%, FMG down 1.9% and RIO off 1.9%. Lithium stocks eased back, PLS down 2.5% and LTR falling 6.1%. Oil and gas stocks fell, WPL down 2.8% and STO falling 0.6%. JHX under serious pressure on US housing news down 5.5%. In corporate news, ALL produced a cracker result and should see upgrades tomorrow and $500m buyback also helping with the stock rising 6.7%. RIO released revised funding arrangements for Turquoise Hill. NUF fell hard after results, down 8.6%. CXL got more government funding, now $65m in three days, up 6.3%. Have to love an election. WEB rose 1.4% on the better than expected numbers and mild increase in costs. On the economic front, the LNP will be happy to see unemployment at its lowest since 1974 at 3.9%. Asian markets under pressure with HK the target down 2.2%. 10-year yields slipped slightly on jobs data.

End of Day Podcast – Thursday, May 19

Major Movers:

  • Winners: IMU, ARU, EMR, ALL, CXL, CEN, JIN, IDX
  • Positive sectors: Gold. Healthcare. Poker Machines.
  • Negative sectors: Everything else.
  • High 7152 Low 7038.
  • Big Bank Basket: Down to $183.39 (-1.7%)
  • All-Tech index: Down 2.7%
  • Gold: Slips to $2587
  • Bitcoin: Falls to US$29131
  • Aussie Dollar: Back to 70.11c.
  • 10-Year Yields: Fall to 3.39% on jobs data.
  • Asian markets:Fall with Tencent and Alibaba under pressure. China down 0.1%, Japan down 1.3% and HK down 2.6%
  • US Futures: Dow down 16. Nasdaq down 45.

Stocks on the Move

  • CXL +6.3% another day another $15m of government funding
  • ARU +11.43% Hyundai signs MOU
  • ALL +6.74% great numbers and a $500m buyback.
  • PNV +3.24% director buying again.
  • STX +1.64% Urea off take agreement.
  • POD +10.29% high grade drill zones near surface.
  • AHX +7.48% Equine acquisition.
  • EMR +8.18% gets a Bullseye.
  • GAL +16.76% another big day after slow start.
  • PDL -7.10% ex dividend and some.
  • TPW -7.86% discretionary retailers taking a hit.
  • AAC -5.32% FY 22 financial results.
  • NUF -8.58% profit number disappoints.
  • DTL -9.38% tech wrecked.
  • SUL -6.03% JBH -6.63% WES -7.83% follow Target and Walmart lower.
  • Speculative stock of the Day: Reckon (RKN) +45.14% sale of accountants practice management group.

In the News

  • Woodside Petroleum (WPL) – merger with BHP Petroleum has received overwhelming support from proxy voting meaning the deal is more than likely a done one.
  • Ramsay Health Care – KKR confirms its conditional offer for the company at $88.
  • Aristocrat (ALL) – reported today. Net profit after tax jumped 46.5% to $530.7m. Operating revenue climbed 23.1% to $2.7bn. The company has relented and is giving shareholders some of their money back after the failed takeover bid for Playtech. It is kicking off a $500m buyback through UBS. Takes any other takeovers off the table. For now.
  • Beach Energy – New CEO appointed. Morné Engelbrecht was acting CEO, now permanent.
  • Sezzle (SZL)/ZIP – One fund manager tells ZIP to walk away from takeover/merger. Bad debts and higher rates.
  • Webjet (WEB) – Underlying EBITDA loss of $15m for the year, a $103m improvement compared to FY21. Total transaction value (TTV) and revenue for the 12 months to March 31 were up 262% and 466% respectively on the previous year. Expenses were up just 7%.

Economic News/Bond Markets

  • Unemployment fell to 3.9% from 4% in April in line with expectations to the lowest level since 1974. 4,000 jobs were added which was behind expectations of 30,000.
  • NZ plans to spend NZ$1bn with a cost of living relief payment. The government will give about 2.1 million people a payment of NZ$27 a week for three months from Aug. 1. Reductions in fuel duties to offset soaring gasoline costs will be extended by two months, as will half-price public transport.

Asian Markets

  • Chinese electricity generation fell in April from the prior month to 608.6bn kilowatt-hours, a decline of 4.3% on the same period last year.
  • Thermal power output plunged to an even greater degree, down 12% for the biggest drop since 2008, as the share of renewables increased at the expense of coal and gas and China installed more solar capacity than expected in the first quarter.

US and European Headlines

  • European stocks expected to open lower but only around 0.8%.
  • Euro area construction output for March. EasyJet results.
  • G7 Finance ministers and central bankers meeting in Bonn.
  • Tesla kicked out of S&P500 ESG sector. Musk calls ‘ESG a scam’.
  • Total global debt rose by US$3.3 trillion in Q1 2022 to a new record of over US$305 trillion—mostly due to China and the U.S.
  • Google’s Russian business has filed for bankruptcy after its bank accounts were seized.
  • Top US antitrust enforcer pledges crackdown on private equity deals.
  • Biden heads to Asia for his first visit.

And finally….