ASX 200 rose 23 points to 7234 (+0.3%) as banks bounced back and lithium stocks got poleaxed by a perfect storm of research and Chinese moves in Africa. PLS fell 22.0%, MIN down 8.1% and LTR down 19.1%. Base metal stocks also fell in sympathy with IGO down 11.7%, LYC off 6.4%. Iron ore miners held up better with BHP up 2.3% and FMG rising 3.2%. Gold miners slid with NCM down 2.7% and NST off 2.6%. Oil stocks were mixed with STO unchanged and WDS better by 1.4%. The Big Bank Basket rallied hard to $187.61 (+1.7%). CBA better by 2.3% with MQG up 1.3% and ASX rising 0.8%. Healthcare mixed led by CSL up 0.6% and RMD down 1.6% with FPH off 1.4% too. Industrials better, TLS rallying hard up 3.1%, REITs slipped as 10-year bond rates rose to 3.43%. Tech off 1.1% with XRO down 2.2% and SQ2 down 4.3%. On the corporate front, ORG confessed that it was short of coal for its biggest power station and dropped 13.7% after removing guidance. On the economic front, GDP rose 0.8% in the March quarter better than expected and Asian markets mixed with the 10-year yield stronger at 3.43%.

End of Day Podcast – Wednesday, June 1

Headlines

  • Winners: ECX, REG, JDO, ACL, FMG, TLS, TPG
  • Losers: PLS, CXO, LTR, SYA, INR, AKE, ORG
  • Positive sectors: Banks. Iron ore. Telcos.
  • Negative sectors: Lithium. Gold miners. Tech.
  • High 7238 Low 7204. Tight range
  • Big Bank Basket: Bounces hard to $187.61 (+1.7%)
  • All-Tech index: Down 1.1%
  • Gold: Lower at $2556
  • Bitcoin: Steady at US$31,560
  • Aussie Dollar: Slips to 71.69c
  • 10-Year Yield:Soars to 3.43%
  • Asian markets: Japan up 1.4% China down 0.5% and HK down 1.0%
  • US Futures: Dow up 100 Nasdaq up 13.

Major Movers

  • CLG +29.73% upgrade to FY22 Guidance.
  • ORG -13.72% coal sourcing for Eraring an issue.
  • JDO +5.34% banking sector doing well.
  • TLS +3.09% telcos on fire.
  • ECX +6.36% change of director’s shareholding.
  • PEB +2.42% agrees to Cxbladder EMR integration.
  • LRK +7.14% kicks again.
  • BTI +5.80% ongoing dividend policy.
  • PLS -22.03% CXO -20.43% LTR -19.08% all down on lithium woes.
  • PBH -12.46% update on global leadership team.
  • NML -15.19% Investor presentation.
  • Speculative Stock of the Day: Nothing on any volume today.

In the News

  • Origin Energy (ORG) has updated its operating conditions and earnings guidance amid “extreme volatility across commodity markets”.ORG had previously provided energy markets underlying EBITDA guidance for fiscal 2023 of between $600m and $850m. Due to “material developments in global and Australian energy markets”, the company has withdrawn all guidance for fiscal 2023. Origin said higher earnings from integrated gas, as Australia-Pacific LNG benefited from strong commodity prices, were expected to offset a decline in energy markets earnings.
  • National Australia Bank (NAB) – has completed its acquisition of Citigroup’s Australian consumer business.
  • Lithium stocks smashed today in a perfect storm as a Goldman Sachs research piece coincided with a cap on lithium pricing in Argentina potentially and rumours that BYD in China had bought 6 lithium mines in African and was ready to kick start production of up very quickly, so cornering the market in lithium for the Chinese battery industry.
  • Lithium explorer AVZ Minerals (AVZ) has requested a trading halt until July 1 as it works through legal proceedings related to its mining and exploration rights at the Manono Project in Congo, Africa.
  • Telix Pharmaceuticals (TLX) – Darren Smith will succeed Doug Cubbin as the group chief financial officer.
  • Mesoblast (MSB) – has reported a $US23.1m ($32.15m) loss after tax for the third quarter of the 2022 financial year, compared to its $US26.5m loss for the same period last year. Cash on hand at the end of the quarter was $US76.8m.

Economic news/Bond Markets

  • Gross Domestic Product (GDP) rose 0.8% in the March quarter, following a rise of 3.6% in the December quarter. In contrast to previous COVID-19 strains, there was continued growth in economic activity through the peak of the Omicron variant outbreak.
  • Today’s GDP figures have pushed ANZ analysts to raise their expectations for the June cash rate increase, citing strong wages.
  • The Ai Group Australian Performance of Manufacturing Index (PMI) fell to 52.4 in May, from 58.5 in the previous month. The reading indicates the slowest growth in factory activity since a contraction in January.
  • Australian home prices posted their first fall in 20 months, led by declines in Sydney and Melbourne, as a combination of higher interest rates and a rising supply of properties damped demand.

Asian Markets

  • Chinese EV maker WM Motor Holdings is set to raise US$1bn in HK before the end of the year. The Shanghai-based company doubled sales to 44,152 vehicles in 2021 from a year earlier, contributing to a 77.5% jump in revenue.

US and European Headlines

  • European markets expected to open around 0.4% higher.
  • German retails sales fell 5.4% v 0.2% forecast as inflation takes its toll.
  • DWS CEO steps down after police raid on ‘greenwashing’ claims.
  • US to provide Ukraine with longer-range missile systems.
  • Yellen admits she was ‘wrong about inflation’.
  • Elliott to sell Italy’s AC Milan football club to RedBird for EUR1.2bn

And finally….

Clarence

XXXX

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