The ASX 200 rose three points to 7149 in cautious trade. After a post-election bump early we saw Asian markets weaken and selling hit banks with the Big Bank Basket down to $184.00 (-0.4%) with CBA off 0.1% and NAB down 0.9%. MQG fell 0.8% and insurers dropped slightly, QBE down 1.8%. Fund managers were firm GQG up 8.1%, MFG up 3.0% and AEF rising 3.5%. Healthcare fell slightly as CSL drifted 0.7% lower. REITs were better as rates drifted slightly lower, GMG bucked the trend falling 1.1%. Industrials flat, WOW and COL fell with WES off 1.2% but SEK, CAR and REA firmed slightly. Tech stocks mixed, SQ2 down 2.4% with ZIP down 1.1%, the All-Tech Index up 0.9%. Resources firm but not spectacular, BHP up 1.4%, FMG up 2.8% and lithium stocks mixed. Oil and gas firmed with WPL up 0.5% and WHC sliding 2.1%. In corporate news, great numbers from ELD up 8.9%, IPL is splitting into explosives and fertiliser, down 3.7% and CDA rose 14.5% on reaffirmation of 2H numbers. SGR has a new chair and KAR rose 4.3% as it broke off its acquisition talks in Brazil. Nothing on the economic front. Asian markets mixed with China flat, HK down 1.2% and Japan up 0.9%. 10-year yields steady at 3.33%.

End of Day Podcast – Monday, May 23

Major Movers:

  • Winners: CDA, IMU, ELD, BRN, GQG, AAC, TER, ALG
  • Losers: SYA, PNV, VNT, JDO, NVX, REG, BCB, ARU
  • Positive sectors: Iron ore. Tech in places. Oil and gas.
  • Negative sectors: Banks. Insurers.
  • High 7196 Low 7136.
  • Big Bank Basket: Down to $184.00 (-0.4%)
  • All-Tech index: Up 0.9%
  • Gold: Slips to $2613
  • Bitcoin: Rises to US$30,183
  • Aussie Dollar: Up to 71.07c.
  • 10-Year Yields:steady at 3.33% on Labor victory.
  • Asian markets: Mixed with China flat, HK down 1.2% and Japan up 0.9%.
  • US Futures: Dow up 120. Nasdaq up 183.

Stocks on the Move

  • CDA +14.52% reaffirms guidance again.
  • IMU +12.50% talks prospects up.
  • ELD +8.91% great result
  • BUB +3.45% broker upgrade on US baby formula opportunity.
  • BRN +8.55% Chris highlights tech position.
  • KAR +4.26% pulls plug on acqusition
  • AAC +5.08% No beef here, all time high.
  • TER +5.00% kicks higher.
  • MP1 +3.87% has bounce started.
  • CTT +25.45% solid buying.Written up in newsletter last week.
  • AXE +10.96% patent granted for Quantum chip.
  • AIS +7.95% on The Call today.
  • SYA -16.07% heavy selling on bug volume.
  • PNV -7.55% no director buying today.
  • ARU -3.90% profit taking.
  • IVZ -9.09% raises $12m to support drilling.
  • GAL -9.09% profit taking.
  • Speculative stock of the Day: Ragusa Minerals (RAS) +25.00% Transformational new lithium project acquired in NT.

In the News

  • Jeff Smith to join ANZ board.
  • Karoon Energy (KAR) – given notice to Enauta Energia to terminate the exclusivity agreement entered into to undertake due diligence and negotiations in connection with potentially acquiring a 50% non-operated interest in the Atlanta oil field, Santos basin, offshore Brazil.
  • Star Entertainment Group (SGR) appoints Ben Heap as interim Chairman and Geoff Hogg as Acting CEO effective June 1.
  • Elders (ELD) half year profit $91.2m vs consensus $78.3m. Revenue $1.51bn vs consensus $1.42bn. Interim dividend 28c vs year-ago 20c. Management expects to benefit from a positive winter cropping outlook, with sufficient soil moisture for improved production in H2. Upgraded its full year underlying EBIT guidance to be in the range of 30% to 40% above its full year 2021 underlying EBIT.
  • Perenti Global (PRN)  has confirmed that it expects to deliver FY22 revenue of $2.4bn and EBIT(A) of between $170m and $175m.
  • Codan (CDA) expects 1H22 profit of $50m to be matched in 2H22.
  • Incitec Pivot (IPL) to implement structural separation of Incitec Pivot Fertilisers and Dyno Nobel businesses. First half EBIT $568.2m vs consensus $608.1m. Interim dividend 10c vs consensus 11c.

Economic News/Bond Markets

  • RBA assistant governor (financial markets) Christoper (‘Clark’) Kent has talked about the RBA’s bond-buying program. One of the key takeaways was that pressure on the Aussie dollar would start to ease as the RBA allows its bond holdings to gradually diminish as they mature, and the central bank unwinds its $280bn bond-buying program.
  • Commonwealth Bank has kept its economic forecasts the same despite Australia’s change of government over the weekend.

Asian Markets

  • China’s level of financial support pledged so far for 2022 amounts to 35.5 trillion yuan. Stimulus is smaller than in 2020, when the pandemic first hit.
  • Beijing reported a record number of new Covid-19 cases for its current outbreak. The city recorded 99 infections for Sunday, up from 61 on Saturday. There were 802 infections reported China-wide for Sunday, from 824 on Saturday. The northern port city of Tianjin is racing to contain an omicron flareup.
  • China tripled investment in solar power projects in the first four months. The nation is forecast to add a record 220 gigawatts of total power capacity this year, according to the NEA.

US and European Headlines

  • European markets expected to open around 0.5% – 1% higher.
  • Davos kicks off this week.
  • Chipmaker Broadcom in talks to buy VMware for up to US$50bn.
  • ABB and Siemens are leading a EUR100m fundraising round by Morrow Batteries, a start-up that aims to start producing in its home country of Norway by the end of next year. Morrow said it would use its funding to build a 1.2GW pilot factory by the end of next year. New European trade rules will make it extremely expensive to import batteries from Asia from 2027.

And finally…..

A senior citizen living in the USA drove his brand-new Corvette convertible out of the dealership.

Taking off down the road, he floored it to 80 mph, enjoying the wind blowing through what little gray hair he had left. Amazing, he thought as he flew down the open highway, pushing the pedal even more.

Looking in his rear-view mirror, he saw a state trooper behind him, lights flashing and siren blaring. He floored it to 100 mph, then 110, then 120. Suddenly he thought . . . What am I doing? I’m too old for this, and pulled over to await the trooper’s arrival.

Pulling in behind him, the trooper walked up to the Corvette, looked at his watch, and said, “Sir, my shift ends in 30 minutes. Today is Friday. If you can give me a reason for speeding that I’ve never heard before, I’ll let you go.”

The old gentleman paused. Then he said, “Years ago, my wife ran off with a state trooper. I thought you were bringing her back.”

“Have a good day, sir,” replied the trooper.