ASX 200 down 85 points to 6601 (-1.3%). Bond yields jump to 4.19% in 10-year yields as minimum wage worries fuel inflation fears. Banks get smacked down with the Big Bank Basket down to $158.25 (-1.2%). CBA down 0.6% and NAB off 1.9% with MQG holding firm up 0.5% as insurers rising slightly. SUN up 3.5% and QBE up 2.2%. Fund managers slipped with GQG off 3.1% and MFG down 2.1%. In healthcare, CSL dropped 1.2% and others fell, RHC off 0.9%, COH off 3.9% and FPH under pressure down 3.5%. Industrials saw selling with defensives like TCL falling 0.9% on higher rates, WOW down 1.6% and COL down 1.2%. REITS off as GMG fell 4.4%, DXS down 1.9% and old school platform stocks remain under pressure, REA down 6.4% and SEK off 6.8%. TLS was a green spot in another sea of red, up 2.1%. Tech down hard again, WTC off 3.7%, XRO down 5.2%. All Tech Index down 3.6%. In resources, BHP dropped 0.8% with S32 down 3.6% and FMG bucking the trend up 1.3%. Gold miners eased back, and lithium fell again, PLS down 5.1% and AKE off 1.4%. Oil and gas stocks fell too despite crude rising slightly, WDS down 3.1% and STO down 1.0%. Coal too buckled, WHC off 0.4% and SMR down 7.8%. In corporate news, RMD down 2.9%, agreed to buy a software firm in a $1.45bn deal. Plenty happening on the economic front as consumer sentiment plummets to recessionary readings and Chinese data better than expected. Asian markets were mixed with China up 1.8% and HK up 1.6%, Japan down 1.2%.
Marcus Today End of Day Podcast – Wednesday, June 15
- Winners: PNV, LYC, KMD, SUN, CPU, IAG
- Losers: NVX, JRV, MP1, 5EA, ECX, BCB, CHN
- Positive sectors: Insurers. Telcos.
- Negative sectors: Banks. Miners. Oil and gas. Healthcare. Tech.
- High 6681 Low 6590
- Big Bank Basket: Whacked to $158.25 (-1.2%)
- All-Tech index: Falls 3.6%
- Gold: Better at $2632 as AUD falls.
- Bitcoin: Heads lower to US$20,953
- Aussie Dollar: Lower at 69.08c
- 10-Year Yield:Higher at 4.19%
- Asian markets: Sold off, Japan off 1.2%, China up 1.8% and HK up 1.6%.
- US Futures: Dow up 86 Nasdaq up 68
- PNV +4.82% director buying?
- CPU +3.27% interest rate sensitive.
- LYC +4.22% good reaction to US deal yesterday.
- IAG +3.12% bond yields rise.
- TLS +2.13% defensive qualities.
- GAL +16.36% back in focus.
- PDI +11.76% deepest hole intercepts Au 630m down dip.
- X64 +4.90% share buy-back update.
- BCB -8.96% SMR -7.80% coal on the nose.
- JRV -11.38% metals weakness.
- SYA -7.14% slips again.
- CHN -8.75% fall continues.
- BOE -6.91% PDN -7.35% uranium price triggers profit taking.
- FFX -10.00% continues to slide.
- Speculative Stock of the Day: Chase Mining (CML) +21.43% transformational acquisition of high purity graphite project. Green Critical Minerals acquired with rights to acquire 80% if advanced McIntosh Graphite Project
In the News
- HUB24 (HUB) reiterates FY24 platform FUA target of $83-92B in investor presentation. 4Q22 net flows to be in-line with 4Q21 excluding large transitions. Dividend payout ratio targeting 40% – 60% of underlying NPAT.
- APRA finalises its macroprudential policy framework which comes into effect from September this year. Banks will need to have systems in place to limit growth in higher-risk residential mortgage lending, such as loans at high debt-to-income multiples or high loan-to-valuation ratios. Seems to be an obvious recommendation.
- Atlas Arteria (ALX) – IFM is apparently in no rush to bid for Atlas Arteria. Last week IFMacquired a15% stake, reports suggest IFM is interested in acquiring Atlas Arteria, but not in the near future. There is conjecture IFM will wait until Atlas agrees to a deal to renew its concession on the APRR toll road asset in France, which doesn’t end until 2035.
- Slater & Gordon (SGH) – Speculation Slater & Gordon could be takeover target.
- ANZ (ANZ) understood to be considering a bid for MYOB.ANZ held talks with MYOB owner KKR over an stake or the possibility of a full. KKR acquired the business for $2.4bn in May 2019.
- Mirae Asset Global Investments and its New York-based subsidiary GlobalX has acquired ETF Securities, the local fund manager founded by Graham Tuckwell. Mirae was previously an owner of ETF Securities rival BetaShares but was bought out by Wall Street firm TA Associates last year.
Economic News/Bond Markets
- Big move in bond yields
- ANZ expects headline inflation to peak at 7% y/y in the second half of this year, before heading back towards 3%..
- The Westpac -MI confidence index dropped 4.5% to 86.4 points, approaching levels normally seen during major economic dislocations.
- RBA chief Philip Lowe warned last night inflation could hit 7% by year’s end and said Australians need to brace for even higher borrowing costs, after it raised the cash rate in May and June to 0.85%.
- Weekly sentiment released by ANZ earlier posted a slump of 7.6% in the June 6-12 period and is now at recessionary levels.
- The Industrial Relations Commission raised the minimum wage by 5.2% from July 1. The national minimum wage will now be $812.6 per week, an increase of $40. The 5.2% increase is more than twice the annual wage price index of 2.4% recorded in the first quarter.
- Goldman Sachs has ramped up its forecast for future RBA rate increases with a call for a 50bps rise in July August and September.
- Australian Energy Market Operator (AEMO) has suspended the electricity market.
- Industrial output rose 0.7% from a year ago, the National Bureau of Statistics said Wednesday, while the almost 7% contraction in retail sales was better than the plunge in the previous month.
- Chinese aluminum output hit an all-time high and steel production rose to its strongest in a year, as industrial activity rebounded
- Property continued to struggle, with home sales down 41.7% and investment falling 7.8% in May from a year earlier. The services economy also remained in a deep slump, with restaurant and catering revenue dropping 21.1%, although that was an improvement from the 22.7% decline in April.
- South Korean agency behind BTS sinks after band announces hiatus.
US and European Headlines
- Biden set to meet Mohammed bin Salman (MBS) in Saudi policy U-Turn.
- FOMC tonight in US.
- European futures up around 1%.
- ECB to hold ad hoc meeting to discuss current market conditions.
- Crypto platforms start to lay off staff as major platforms cut staff.
- Apple scores deal for Major League Soccer streaming rights worth US$2.5bn.
- MicroStrategy says it hasn’t received a margin call against a US$205m bitcoin-backed loan it took in March.
- US average petrol prices now above US$5.016 a gallon. That works out at 194c a litre. Still below what we are paying here.