ASX 200 fell 41 points to 6433 (-0.6%) as resources saw a big sell-off. Iron ore prices in China fell heavily leaving BHP down 5.3%, RIO off 5.1% and FMG falling 8.6%. Gold miners too joined in with NCM falling 4.6%, NST down 6.1% and EVN off 6.2%. Base metal and lithium stocks eased, PLS down 2.9%, LTR down 1.9% and IGO off 2.6%. Oil and gas stocks under heavy pressure, STO down 6.0%, WDS unwinding 4.9% and coal stocks not so merry, SMR fell 9.6% and WHC off 9.2%. Industrials were better, healthcare rallying across the board, CSL up 2.8%, RHC up 0.9% and RMD rallying 1.7%. REITs rallied as 10-year yields fell back to earth with a thud, GMG up 3.4% and GPT up 4.2%. Consumer stocks also doing well, WES rallying 3.0%, ALL up 2.2% and TCL up 2.2% on its distribution announcement. Tech stocks better, XRO up 3.0% and WTC up 0.8% with the AllTech Index up 0.7%. Banks were a stalwart with the Big Bank Basket up to $154.19 (-0.4%). ANZ the standout up 1.1%. Insurers better, QBE up 0.2%, IAG up 1.7% and ASX up 0.4%. In corporate news, PBH rallied hard in the news of a new strategic shareholder in SIG up 18.6%. IFM got another bid up 7.4%, VCX reaffirmed guidance rising 6.3% and LKE fell 13.7% unwinding last week’s rally on a new Executive Chair. Nothing on the economic front, Asian markets flat with Japan down 0.9%. 10-year yields fell to 4.06%. 

Headlines

  • Winners: PBH, APX, IFM, IMU, VCX, SGF, ARB
  • Losers: LKE, GRR, PDN, NHC, CIA, BGL, LFS, DEG
  • Positive sectors: Banks. Healthcare. Tech. Consumer discretionary. REITs.
  • Negative sectors: Iron ore. Gold miners. Lithium. Uranium. Oil and gas.
  • High 6493 Low 6407
  • Big Bank Basket: Rises to $154.19 (+0.4%)
  • All-Tech index: Up 0.7%.
  • Gold: Higher at $2649.
  • Bitcoin: Lower at US$19950
  • Aussie Dollar: Lower at 69.69c
  • 10-Year Yield:Heads down to 4.06%
  • Asian markets: Weaker Japan down 0.9%, China and HK flat.
  • US Futures: Dow up 109 Nasdaq up 81 – European Futures showing small gains.

Major Movers

  • PBH +18.60% SIG takes a slice at 243c.
  • APX +9.68% PE speculation.
  • IFM +7.38% additional non-binding conditional offer and update.
  • EXR +13.04% hydrogen MPU with Softbank Energy.
  • CCR +11.43% achieves profitability and record revenue in May.
  • PSQ +10.47% recent patient fee performance.
  • BET +4.69% PBH deal helps.
  • HUM +11.11% new investors coming on board.
  • LKE -13.69% appoints executive chairman.
  • GRR -13.33% iron ore falls.
  • PDN -13.08% uranium drops.
  • SMR -9.59% coal stocks crash lower.
  • DCN -16.52% fallout from mine closure continues.
  • TRJ -12.44% $29.7m institutional placement.
  • ELO -11.76% no Mr Blue Sky here.
  • Speculative Stock of the Day: Culpeominerals (CPO) +22.50% multiple high-grade Cu intersections at Lana Corina project.

In the News

  • PointsBet (PBH) – has secured a $94.16m investment from SIG Sports Investment Corp, a member of the Susquehanna International Group of Companies. PBH will issue 38.75m shares to SIG Sports at a price of 243c a share, representing a 15% premium
  • Metcash (MTS) and Coles (COL) are expected to walk away from bidding for Superior Food Services. The price tag was estimated to be several hundred million dollars.
  • Appen (APX) – Blackstone is understood to have been eyeing Appen even before its profit downgrade in May.
  • Cooper Energy (COE) – announces a $245m capital raising at 24.5c to acquire APA Group’s Orbost gas processing plant this week. The raising comprises an $84m placement to institutional investors, and a 2-for-5 accelerated, non-renounceable, entitlement offer to raise a total of $160m. Additionally, Cooper Energy announced a new, fully underwritten $400m revolving corporate debt facility and $20m working capital facility
  • Infomedia (IFM) receives an offer from Solera Holdings of 170c. Grants DD to three parties.
  • Southern Cross Media Group’s (SXL) regional television assets sale in doubt according to newswires.
  • Transurban (TCL) declared a distribution of 26c for the half-year to June 30. 24c partly franked distribution from Transurban Holding Trust and a 2c fully franked dividend from Transurban Holdings. The payout takes the total FY22 distribution to 41c per stapled security.
  • Seven Group Holdings (SVW) – No change to guidance at investor presentation.
    Vicinity Centres (VCX) expects FY22 funds from operations (FFO) to be at or above 12.6c vs prior 11.8-12.6c. Asset valuations see $245m uplift.
  • IGO has completed its acquisition of Western Areas (WSA) -WSA shareholders have received 387c in cash.
  • Austal (ASB) – has been awarded two contracts worth more than $300m for two patrol boats in Trinidad and Tobago and 2 for the RAN.

Economic News/Bond Markets

  • National Australia Bank says the US Federal Reserve’s move to restrictive monetary policy, alongside other global economic challenges, will drag the US into a recession next year. It lowered its GDP forecasts, and now expects growth of 2.3% in 2022, and 1.1% in 2023.
  • Iron ore futures in China dived 9.1% in early trade.

Asian Markets

  • Chinese banks kept their main lending rates unchanged. The one-year loan prime rate was left at 3.7%. The five-year rate, a reference for mortgages, was also maintained at 4.45%.
  • A single local case in Shenzhen detected on Saturday triggered mass testing and neighbourhood lockdowns in some parts of the technology hub. China is reporting the lowest number of new cases since early February.
  • Macao began its second day of mass Covid-19 testing on Monday, with banks, schools, government services and other businesses shut, but casinos remaining open.

US and European Headlines

  • European markets set to open lower.
  • Nomura has lowered its real US GDP forecast for this year to 1.8%, compared to 2.5% earlier, while the projection for next year is seen declining 1%, from 1.3% growth earlier.
  • Macron loses majority in French Parliament.
  • In the UK, a YouGov survey shows 71% expect their costs to increase a lot.
  • Australian crypto casino Stake has signed a multi-year deal with Everton FC.
  • German turning to coal after Russia cuts gas supply.
  • Bitcoin hovers around $20,000. Celsius says stabilising crypto will take time.
  • Fed’s Mester says it will take a couple of years to get inflation back to 2%.
  • UK property companies see insolvencies rise strongly as rates rise.
  • Lunch with Warren Buffet sells for US$19m at auction.

And finally…..

Clarence

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