ASX 200 fell another 101 points today to 7020 (-1.4%) as once again banks saw widespread selling and resources eased despite good numbers from China. The Big Bank Basket fell to $167.72 (2.6%). CBA down 2.6%, WBC down another 3.7%. MQG held up with a small loss, insurers were under a little pressure, QBE down 0.7% and MFG rose 2.2% on news of Hamish. Industrials were patchy with CSL up 0.3% and RHC up 0.6% with SHL off 1.7%, WES continued its slide down 1.0%, GMG down 1.7% and QAN falling 4.1% as it strains to cope with travel boom. Tech under pressure again with WTC down 3.1%, XRO off 2.6% and the All–Tech Index off 1.3%. BNPL stocks steadied at lower levels, ZIP flat and SQ2 up 0.2%. In resources, BHP fell 2.4%, RIO dropped 1.2% with base metals and lithium under a little pressure, PLS down 5.4% and AKE off 4.2%. Energy stocks mixed, WDS up another 1.9% with STO off 1.1% and coal stocks seeing some sellers as Chinese coal imports weaken on demand. In corporate news, JLG dropped 5.5% again despite reaffirming guidance, SYR fell 10.1% on a little trouble in Mozambique. In economic news, banks and economists racing to talk down property and the economy and rates rises to come. Meanwhile, in Asia, China slid a little as Shanghai is seeing some isolated lockdowns again, HK down 1.2% and Japan flat.
End of Day Podcast – Thursday, June 9
- Winners: 5EA, MAD, OFX, GQG, BBN, LOV, PRN, SKC
- Losers: SMR, SYR, SYA, BCB, LKE, GMA, RED
- Positive sectors: Energy (but only WDS)
- Negative sectors: Everything else
- High 7111 Low 7020
- ECB in focus.
- Big Bank Basket: Whacked to $167.72 (-2.6%)
- All-Tech index: Falls 1.3%
- Gold: Better at $2582.
- Bitcoin: Steady at US$30306
- Aussie Dollar: Lower at 71.72c
- 10-Year Yield:heads higher again to 3.59%
- Asian markets: Japan flat China down 1.1% and HK down 1.2%
- US Futures: Dow down 72 Nasdaq down 48.
- LOV +3.54% low volume rally.
- MFG +2.15% Hamish is back. Sort of.
- SLX +5.31% kicks again.
- BOE +1.63% uranium better in spots.
- MP1 +2.00% bargain hunters.
- RAC +11.24% announces on-market buy back.
- AMA +15.15% change in substantial holding.
- PDI +5.41% becoming a substantial shareholder.
- SYR -10.10% problems in Mozambique.
- SMR -11.64% coal under fire.
- LRS -9.76% North American roadshow.
- Speculative Stock of the Day: Southern Cross Gold (SXG) +16.00% no reason but maybe some drill results to come.
In the News
- Cleanaway Waste Management (CWY) calculates the fire at a medical waste processing facility in Victoria and the disruption caused is expected to reduce EBITDA by $2-$3m/month.
- ACCC outlines preliminary competition concerns with Aurizon’s (AZJ) proposed acquisition of One Rail. The issue for the ACCC is determining whether Aurizon’s divestiture undertaking will be effective in replacing the competition that would be lost because of the proposed acquisition.
- Johns Lyng Group (JLG) upgrades guidance for FY22, sees EBITDA of $83m vs prior $78.7m which would be a 53% improvement on last year’s result. Expects revenue of $867m vs prior A$802.4m
- Syrah Resources (SYR) – reported an insurgent attack at a mine in Mozambique, 200km from its Balama site.
- Magellan Financial (MFG) – co-founder Hamish Douglass will take a consultancy role within the company, providing investment insights across geopolitical and macroeconomic issues. The starting date of newly appointed CEO David George has been brought forward to July 19, 2022, from August 8.
Economic News/Bond Markets
- CBA cuts its growth outlook for the economy from 4.7% this year to 3.5% and sees the economy slowing to ~2.1% next year, down from 3.1%. It expects the hawkish stance from the RBA to curb inflation but not before the headline figure hits 6.25% this year.
- AMP expects the increase in energy prices to add 1% to headline inflation, with a peak of 7% in the Sept Quarter. It is forecasting that the trimmed mean inflation will hit 5.5% in the last quarter of this year.
- Authorities talk about closing down some parts of Shanghai to do testing.
- Chinese coal imports fall on weak demand.
- China’s exports grew at a faster pace in May than the previous month as Covid disruptions to production and logistics eased.
- Exports in USD grew 16.9% in May from a year earlier, accelerating from April’s 3.9% increase and climbing well above an 8% gain forecast by economists. Imports rose 4.1% after staying unchanged in the previous month. Economists had expected a 2.8% increase.
- China’s exports to the US in the first five months, in yuan terms, grew 12.9% on year, and imports rose 2.1%.
US and European Headlines
- ECB Today. European market expected to open around 0.5% lower.
- In the UK, it now costs GBP100 to fill up the average tank.
- Twitter to share data with Musk as it presses ahead with vote on $44bn deal.
- Abbott Laboratories received a complaint filed by a former employee concerning problems at an infant-formula plant months earlier than previously publicly known.
- SEC Chairman Gary Gensler said the agency is considering requiring brokerages to route individual investors’ stock orders into auctions.
- Target Corp. CEO Brian Cornell said moving quickly to unload excess inventory is a necessary short-term pain for the retailer.
- US Mortgage-Application Index Falls to Lowest Level in 22 Years.