The ASX 200 rose 26 points today to 7155 (+0.4%). A damp end to a steady session, falling 20 points on the match out. A solid day though with banks and resources leading the market higher. BHP added to the gains today as it went ex its oil and gas assets and the share price was reset for index purposes and the stock rose 1.1% on the news, Woodside, now WDS, rose slightly by 0.7%. Gold miners were in demand today as USD falls and rates slip lower, and stagflation is becoming a thing to worry about. NCM up 0.9%, EVN up 3.5% and NST up 2.5%. Lithium stocks a little depressed as other resources took up the baton, PLS down 4.5%, LYC off 2.6% and GRR down 6.5%. Oil stocks better and coal stocks pushed higher again, WHC up 1.7%. Banks were solid. The Big Bank Basket up to $187.33 (+1.2%) with strong safe-haven demand playing to their strengths. Elsewhere other financials slid, SQ2 down 5,5%, ZIP off 2.9% and CGF down 3.32%. Healthcare slipped, CSL down 0.2% as flu shots in focus. Consumer staple stocks rallied, WES up 1.1%, COL up 2.0% and WOW firmed 1.9%. Tech on the nose as usual. XRO down 1.1%, WTC down 3.2% and the All-Tech Index down 2.4%. In corporate news, CGC had a good day up 8.6% following a positive business update. FPH fell 2.3% on results, CHN returned after a $100m raise and fell 6.6%. DVP rose 11.86% on the start of work at Bellevue Gold. Nothing significant on the economic front. Asian markets slightly better. 10-year yields fall to 3.25%.

End of Day Podcast – Wednesday, May 25

Major Movers:

  • Winners: CGC, RED, GQG, NUF, PSI, AGY, PRU, SGF
  • Losers: BRN, SWM, HT1, CHN, GRR, CCX, PME
  • Positive sectors: Banks. Iron ore. Gold miners. Oil. Consumer staples.
  • Negative sectors: Healthcare. Lithium. Tech.
  • High 7189 Low 7135
  • Big Bank Basket: Up to $187.33 (+1.2%)
  • All-Tech index: Down 2.4%
  • Gold: Steady at $2618
  • Bitcoin: Slightly higher to US$30,006
  • Aussie Dollar: Drifts higher to 71.02c.
  • 10-Year Yield: Falling to 3.25%
  • Asian markets: Mixed, Japan down 0.1%, China up 1% and HK up 0.2%
  • US Futures: Dow up 58 Nasdaq up 82.

Stocks on the Move

  • CGC +8.59% positive business update.
  • NUF +5.61% bargain hunters.
  • RED +7.79% Spilt Enz had it right.
  • EVN +3,52% PRU +4.53% gold miners in demand.
  • DVP +11.86% starts work at Bellevue Gold Mine.
  • BTI +6.59% $118m cash received from Instaclustr sale.
  • ART +8.00% completion of Onflare acquisition and capital raise at 43c
  • HT1 -7.85% thin volume sell down.
  • GRR -6.51% overbought being unwound.
  • CHN -6.60% raises $100m in placement at 600c.
  • ELD -5.80% profit-taking.
  • BRN -8.70% coming off the boil.
  • CCX -6.06% consumer stocks under pressure.
  • CTT -9.60 % Deflating.
  • HIO -8.62% backing and filling.
  • NC1 -3.70% heading lower.
  • Speculative stock of the Day: Conico (CNJ) +83.33% good volume following geological review of Mt Thirsty following discovery by neighbour GAL.

In the News

  • BHP – Ex Bonus and name change for Woodside to WDS.
  • BGH Capital has upped its offer for Virtus Health (VRT). VRT is now waiting on CapVest to see if it plans to improve its offer.
  • Nanosonics (NAN) expects FY total revenue to be in line with current market consensus. Added the transition of existing GE trophon customers in collaboration with GE is currently well underway. The monthly run-rate of sales of consumables to end customers in Q3 was also broadly in line with Q2 FY2.
  • Worley (WOR) wins a contract for a US greenfield renewable diesel plant. 45% of Worley’s revenue comes from the Americas, Macquarie believes the US is likely to lift its investment in oil, gas and renewable energy to improve energy self-security.
  • Fisher & Paykel (FPH) – full-year revenue NZ$1.68bn vs guidance NZ$1.675-1.70bn and consensus NZ$1.70bn. Gross margin 62.6% vs consensus 62.3%. Final dividend 22.5c, +2% vs a year ago and total dividends for the year to 39.5c vs consensus 38c. The analyst commentary looks at the last two and a half years and the huge COVID boost it experienced. Over the last two years, FPH has supplied
    the equivalent of ~10 years’ worth of hardware sales prior to COVID.
  • Bega Cheese (BGA) looking to sell and leaseback 1 Vegemite Way, Port Melbourne property.
  • AGL – HESTA will vote against the demerger.
  • Costa Group (CGC) – calendar 2022 earnings to be higher by around $5m. However, net profits are forecast to be $6.4m. Revenue over the calendar year was $1.22bn, a 4.9% increase on 2020. A fully franked final dividend of 5c was declared.
  • ALS (ALQ) described a “positive start” to the 2023 financial year highlighting strong volumes in life sciences, where it has passed through price increases, and commodities.

Economic News/Bond Markets

  • RBNZ raises rates by 0.5% to 2%.
  • The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 2.0%. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and support maximum sustainable employment. The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3% target range.
  • The Committee agreed to continue to lift the OCR at pace to a level that will confidently bring consumer price inflation to within the target range.
  • RBA Assistant Governor Luci Ellis delivered a speech titled – Housing in the Endemic Phase.

Asian Markets

  • Two of China’s biggest provinces are raising power rates for factories amid increased environmental scrutiny and higher fuel costs.
  • North Korea fires suspected ballistic missile in new tests, says Seoul.

US and European Headlines

  • European stocks head for a higher open, around 0.8% higher.
  • Hungary declares a state of emergency.
  • German final first-quarter growth up 0.2%
  • Fed minutes out later today in US.
  • George Soros talks about the ‘end of civilisation’ at Davos and a nuclear war with Russia. Davos very cheery this year.
  • EU should reach an agreement on Russian oil embargo within days and talks about reparations. Good for the oil price.
  • Glencore faces a US$1.5bn fine and plead guilty to bribery charges.
  • Evercore ISI predicts S&P 500 will jump 22% from current levels. Catalysts are retail investors coming back in when inflation moderates and jobs numbers hold up.

And finally….