ASX 200 falls 116 points to 6475 (-1.8%) well off lows ahead of US Juneeth Holiday Monday. A good rally into the close. ASX 200 is down 6.6% this week. Few sectors were spared today with the Banks falling hard, CBA down 3.6% and NAB down 1.7% hitting 52-week lows. The Big Bank Basket dropped to $153.53 (-2.6%). Insurers eased back as QBE fell 2.7% and MQG eased 3.0%. GQG fell 5.5% but MFG actually rallied 1.8%. Healthcare in casualty again today with CSL down 1.0%, RHC falling 3.2% a long way from the supposed bid price from KKR at 8800c. Barbarians not even in the area let alone at the gate. Industrials sagged as WES fell another 1.2%, REITs under pressure, GMG down 2.5%, TLS fell 2.1% and REA and SEK under pressure again. One bright spot in WOW up 0.2%. Tech stocks in the seller’s sights, XRO down 5.6%, CPU off 0.9% and SQ2 collapsing 7.8% with the AllTech Index down 1.2%. Resources on the nose as iron ore producers fell, BHP off 3.4%, FMG down 5.3% and RIO down 4.2%. Gold miners rose as AUD gold prices pushed higher, NCM up 3.7% and NST up 5.1%. Lithium depressed again, AKE down 4.2%, LYC down 2.8% and IGO off 3.5%. Oil and gas stocks fell hard too, WDS down 0.9% and STO tumbling 2.9%. Old king coal not such a merry old soul with WHC down 6.2% and YAL off 4.0%. In corporate news, BUB updated the market on a big bounce in China and US formula crisis as tailwinds rising 9.1%, GUD tried to sneak through a market update after hours last night, failed and fell 19.6%. DCN crashed 32.4% after closing Mt Morgans due to cost pressures. Nothing on the economic front today. Asian markets mixed with China and HK better. Japan down 1.7% as BOJ stays on hold.

Headlines

  • Winners: SWM, RFF, AAC, CAR, WGX, SLR, SBM, 5EA
  • Losers: GUD, MCR, SQ2, ARU, HUB, KAR, SGF, HVN
  • Positive sectors: Gold miners.
  • Negative sectors: Everything.
  • High 6554 Low 6410 Volume higher at $15.5bn than normal on index rebalancing and ETO expiry.
  • Big Bank Basket: Drifts to $153.53 (-2.6%)
  • All-Tech index: Down another 1.2%.
  • Gold: Higher at $2628.
  • Bitcoin: Lower at US$20695
  • Aussie Dollar: Higher at 70.22c
  • 10-Year Yield:Climbs again to 4.15%
  • Asian markets: Weaker Japan down 1.7%, China up 0.6% and HK up 0.8%.
  • US Futures: Dow up 122 Nasdaq up 50 – European Futures showing small gains.

Major Movers

  • EVN +5.43% SLR +6.21% RMS +5.70% gold a port in a storm.
  • AAC +9.90% change in substantial holding.
  • BBN +5.51% inflation hedge.
  • BUB +9.09% business update.
  • SLX +5.79% keeps on going higher.
  • ZIP +6.93% some value appearing.
  • GAL +5.00% pushing higher again.
  • DCN -32.35% closes production at Mt Morgan.
  • HUM -21.74% rattled and LFS deal now off.
  • EXP -10.64% change in director’s interest.
  • VHT 10.28 change in director’s interest.
  • GUD –19.56% No bad. Update.
  • KAR -7.18% no reason found.
  • GRR -5.63% iron ore off.
  • LKE -5.71 % Joint debt coordinators appointed for Kachi lithium project.
  • INR -5.00% slips back.
  • SQ2 -7.79% bitcoin exposure.
  • Speculative Stock of the Day: Nothing. Says it all.

In the News

  • Fortescue Metals (FMG) – Andrew Forrest says there is “not a snowflake’s chance in hell” of a global recession this year but added it could be a choppy few years ahead.
  • Syrah Resources (SYR) has lifted a temporary suspension on movements on its primary transport route in Mozambique following an insurgent attack. Its main Balama graphite operations ‘were not affected’.
  • Link Group (LNK) has affirmed the 2022 financial year guidance it provided in February. It now expects FY22 revenue to increase by a low single digit percentage and operating EBIT to be at least 5% higher than FY21.
  • Bubs (BUB) expects FY22 gross revenue to exceed $100m on the back of momentum in China and the unanticipated volume of sales in the USA. Revenue in FY21 was $39.3m.
  • Humm Group (HUM) – abandons deal to HCF business to Latitude (LFS) – director Andrew Abercrombie buys 1.7m shares.Abercrombie owns 114.9m (23%) shares now.
  • SCP Property Group (SCP) portfolio value $4.46bn vs $4.43bn in December. The REIT owns sub-regional and neighbourhood shopping centres.
  • GUD – now anticipates fiscal 2022 underlying EBITA of $147m, versus previous guidance of $155 to $160m. GUD doesn’t anticipate inventory levels will moderate at least into the first half of fiscal 2023.
  • BWX – Tattarang (Twiggy) discloses 16.8% stake.

Economic News/Bond Markets

  • New PM Albanese will attend NATO summit in this month.

Housing market

  • ANZ predicts 20% fall in 2022-23; BI sees 12-15% drop in 2022. BI estimates a Sydney couple’s ability to service a mortgage would decline by more than 20%, based on a model that uses average net income of $140,700 by end-2022.
  • National prices may decline by 30% through 2025, Coolabah says.
  • Over three quarters (78.6%) of Australians had at least one long-term health condition in 2020-21
  • Nearly half had at least one chronic condition (46.6% or 11.6m)
  • Mental and behavioural conditions (20.1%), Back problems (15.7%) and Arthritis (12.5%) were the most common chronic conditions.

CBA is the only big four bank to increase some savings account rates whilst NAB, WBC and ANZ have yet to pass on a rise despite pushing up mortgage rates.

Asian Markets

  • The Bank of Japan held firm with its ultra low interest rates today. At the two-day policy meeting that ended on Friday, the BOJ maintained its -0.1% target for short-term rates and its pledge to guide the 10-year yield around 0% by a 8-1 vote.
  • The BOJ downgraded its assessment on production, exports and overseas economies, while taking an improved view of consumer spending.
  • China stepping up mass covid testing despite numbers being so low. Beijing reported 22 cases for Thursday, while Shanghai recorded just four cases, all of which were in government-run quarantine centres..

US and European Headlines

  • Joe Biden says Americans are ‘really down’ on the economy.
  • Spreads on US junk-rated corporate bonds, an important gauge of risk that signals higher defaults when it increases, surpassed 500 basis points for the first time since November 2020.
  • Credit Suisse is set to pay nearly 10% on latest debt issue!
  • Ferrari will invest $6.6bn in a shift to electrification. Electric and plug-in hybrid models will make up to 60% of its range in 2026.
  • Biden said he was told by Treasury Secretary Janet Yellen and others that his Covid aid package, passed 15 months ago, could have a marginal impact on inflation. But only marginal. Doh!
  • Musk pledges no change at Twitter for ‘exceptional workers’.

And finally….

Clarence

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