ASX 200 fell 246 points to 6686 (3.6%). A surprisingly calm and steady day at least after the nasty collapse at the open. A good rally into the close as US futures rallied. Sideways from the initial dump, until the last hour. All sectors of the market were trashed today with financials under pressure led by the big four as the Big Bank Basket fell to $160.11(-3.4%). MQG fell 5.2% as deals are drying up, MFG was down just 0.4 % and insurers were under pressure with QBE down 4.0%. Healthcare proved no happy hiding place, CSL down 2.7% and RHC falling 3.5%. RMD the best of the bunch up 0.2% as it buys MEDIFOX DAN for US$1bn. Industrials were under pressure, and even consumer staples succumbed to the sell-off. WOW down 1.5%, COL off 1.4% and EDV unchanged. REITs got smacked down as GMG fell 3.6% and DXS down 4.6%. tech stocks sold off led by SQ2 down 15.1% with WTC down 6.0% and Z1P falling 15.9%. In resources, BHP staggered 4.2% wiping 30 points off the index by itself. Iron ore stocks were down hard as China sees CV10 cases rise and some restrictions back. FMG fell 8.5%, RIO down 4.2% and base metal stocks eased, IGO down 4.0%, S32 off 6.5% and lithium stocks depressed, PLS down 4.0% and AKE off 5.3%. Plenty of other casualties in the hot metal space, oil and gas also under pressure, STO down 5.0% and WDS down 5.3%. No hiding in energy despite oil holding above US$120. In corporate news, WGX rose 3.9% on production numbers, MSB down 10.3% on a second-class action. Not much in economic news, household spending rose 7.6% in April 2022. Asian markets lost ground as expected but escaped better than local markets, China up 0.1%, HK up 0.2% and Japan down 1.2%.

Marcus Today End of Day Podcast – Tuesday, June 14

HEADLINES

  • Winners: LKE, PNV, WGX, BLY, ACL, DMP, CPU
  • Losers: SQ2, 5EA, CHN, INR, PPM, URW, GRR, RPL, KMD
  • Positive sectors: Nothing
  • Negative sectors: Everything
  • High 6842 Low 6566
  • Big Bank Basket: Whacked to $160.11(3.4%)
  • All-Tech index: Falls 3.9%
  • Gold: Better at $2627 as AUD falls
  • Bitcoin: Off lows at US$22189
  • Aussie Dollar: Lower at 69.54c
  • 10-Year Yield:Higher at 3.99%
  • Asian markets: Sold off, Japan off 1.2%, China up 0.1% and HK up 0.2%
  • US Futures: Dow up 295, Nasdaq up 2

MAJOR MOVERS

  • LKE +13.57% bargain hunters.
  • BLY +2.22% investor presentation.
  • PNV +7.79% bit of skin in the game.
  • WGX +3.86% positive production numbers
  • INR -13.64% US lithium play.
  • SQ2 -15.07% bitcoin exposure doesn’t help.
  • CHN -14.20% becoming a substantial shareholder.
  • MSB -10.26% second class action.
  • SYR -8.46% ceasing to be a substantial shareholder.
  • VUL -9.95% on the nose.
  • PDN -9.93% uranium under pressure.
  • BET -15.38% all bets off.
  • Z1P -15.87% comes undone.
  • EGR -12.66% German research confirms recycled graphite performance.
  • LCY -4.55% exploration update.
  • EXR -11.11% QUPEX Conference presentation.
  • Speculative Stock of the Day: ResApp (RAP) +50.00% reinstated to ASX with an increased bid from Pfizer to either 20.7c in the event of confirmed data consideration, or 14.6 if unconfirmed.

IN THE NEWS

  • Pro Medicus (PME) signs two contract renewals with a combined minimum value of $47m.
  • Aurizon (AZJ) Glencore no longer in running to acquire One Rail Coal from Aurizon.
  • GrainCorp (GNC) – speculation GrainCorp and Elders (ELD) circling Ridley Corp (RIC). Similar speculation appeared in the AFR in 2020.
  • South32 (S32) – Speculation South32 may look to divest Illawarra coal mine.
  • SKYCITY Entertainment (SKC) expects FY normalised NPAT of NZ$3.5-7m. Notes strong performance following recent relaxation of COVID-19 operating restrictions.
  • PointsBet (PBH) turned down a $220-300m offer for its Australian division. It is understood News Corp and Matthew Tripp put in a non-binding bid, but the PointsBet board rejected it almost two weeks ago.
  • Monash IVF (MVF) has said it would be happy to talk to potential suitors according to newswires. CEO Michael Knaap added that demand for services is high, however COVID case numbers are playing havoc with scheduled fertility treatments.
  • Life360 (360) amends March quarterly reports and reaffirms CY22 guidance with revenue to be in the range of US$245-275m, underlying EBITDA of -US$32 to -US$38m.
  • Lynas (LYC) signs ~US$120m contract with the US Department of Defence to establish heavy rare earths (HRE) separation facility. Facility targeted to be operational in FY25.
  • Mesoblast (MSB) has announced that a second class action has been filed against the company in the Federal Court of Australia.
  • Bapcor (BAP) has appointed Stefan Camphausen as chief financial officer, effective from July 4.

ECONOMIC NEWS/ BOND MARKETS

  • Household spending rose 7.6% in April 2022. The largest increases in spending were on furniture and household equipment (14.9%), hotels, cafes and restaurants (14.3%) and transport (12.4%).
  • NAB business survey for May: Conditions: +16 vs prior: +19. Confidence: +6 vs prior: +10. Both measures remain above the long-run average.
  • 19 of 24 economists see a half-point increase in July to 1.35%. Goldman forecasts cash rate will reach 2.6% by end of the year.
  • Australian benchmark 10-year yields surged as much as 33 basis points to 4.01%, before easing back to 3.95% at the close.
  • US dollar jumped to a fresh two-decade high against a bunch of its peers. The USD Currency Index, which tracks its performance against six other major currencies, was up 0.6% at 105.04, after scaling to its highest level since December 2002.
  • UBS hascut its growth forecast for the Australian economy, to 2.35% by the end of the year. The broker cut its forecast for real GDP in 2022 to 3.9% year-on-year, down from its previous prediction of 4.1%.

ASIAN MARKETS

  • Beijing reported the highest number of daily Covid-19 cases in three weeks. The city recorded 74 infections for Monday, the most since May 22.
  • Iron ore in Singapore slipped lower ahead of Wednesday’s economic data.

US AND EUROPEAN HEADLINES

  • European markets are expected to rally at the open.
  • US PPI out from the US tonight.
  • UK unemployment rate 3.8% v 3.7% in March.
  • German May Final CPI up 7.9% YoY.
  • Swedish CPI up 7.2% ahead of 7% forecast.
  • EU risks creating ‘false expectations’ with Ukraine’s EU candidacy, Portugal’s PM says.
  • Johnson pushes ahead with UK law to rip up N Ireland protocol.
  • Elon Musk has sacked his Singapore country manager, Christopher Bousigues with his role eliminated. Musk will participate in an all-hands meeting on Thursday.
  • Prologis is buying Duke Realty in a US$26bn deal.
  • President Biden to announce a visit to Saudi Arabia. Humble pie is on the menu.

No jokes today…

Clarence

XXX

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