Tuesday 12th July – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 gave up early gains to close up 4 points at 6606 (+0.1%). Resources were once again on the nose after more shutdowns in China affecting stimulus hopes with recession fears trumping all. Iron ore miners led falls, BHP down 1.4%, MIN off 2.6% and base metal stocks weaker with lithium depressed. INR down 7.5%, PLS off 2.2% and AKE down 4.8%. Coal and energy stocks firmed with WHC up 1.8% and WDS rising 0.5%. In the banking sector, the Big Bank Basket rose to $164.56 (+1.1%) with CBA up 1.2%, elsewhere insurers flat, MFG continue to slip another 0.8%. Healthcare better led by CSL up 1.6% and RMD gaining 2.1%. Elsewhere industrials were mixed, WES better by 0.8%, COL up 1.9% and WOW up 2.0% but TLS down 0.8% and REA off 0.2%. Tech stocks slipping TNE down 2.4%, MP1 down 4.1%. The All–Tech Index fell 1.1%. In corporate news, APE rose 3.3% on a positive business update. CXO fell 7.1% after a resource upgrade. RHC eased 1.6% as media reports that KKR may walk and LNK down 3.5% for a similar reason. In economic news, consumer confidence fell again. Asian markets weak, lowest levels for two years. 10-year yields at 3.39%.

Winners: TER, LFS, NHC, MYX, ECX, APE, NHF, SKC
Losers: 360, 29M, BRN, INR, SYA, CHN, CXO, 5EA, PDN
Positive sectors: Banks. Staples. Energy. Healthcare
Negative sectors: Iron ore. Base metals. Lithium. Gold miners. Insurers

High 6650 Low 6602. Very quiet again
Big Bank Basket: Rises to 164.56 (+1.1%)
All-Tech index: Down 1.1%
Gold: Higher at $2571
Bitcoin: Lower at US$19,966
Aussie Dollar: Lower at 67.22
10-Year Yield: Falls to 3.39%
Asian markets: Easier with Japan down 2%, China down 1.3% and HK off 1.2%
US Futures: Dow down 182, Nasdaq down 80
European markets point to a weaker start, down ~0.5%-1%

MAJOR MOVERS

TER +3.94% coal still in favour.
APE +3.31% positive update.
WHC +1.78% becoming a substantial shareholder.
ZIP +6.0% pays $16m to break engagement.
SZL -38.55% no sezzle sizzle. Deal off. Jilted.
360 -12.19% reversing recent gains.
INR -7.45% lithium sell down again.
SYA -7.14% under pressure.
CXO -7.07% announces resource upgrade and extends mine life.
LLL -14.44% no roaring back.
GAL -9.26% profit-taking.
TYR -7.04% broker downgrades.
WSP -2.86% reverses recent gains.
Speculative Stock of the Day: Nothing on any volume.

IN THE NEWS

Zip Co. (ZIP) and Sezzle (SZL) have mutually agreed to terminate the agreement and merger plans signed in February. As part of the termination, SZL, will receive US$11m ($16m) from ZIP to cover expenses related to the transaction.
Sezzle (SZL) announced Preliminary Q2 results alongside the announcement of their ZIP merger termination. Underlying Merchant Sales are expected to be $415-420m, Total Income in the range of $28.5-29.5m and Total Income less Transaction Related Costs of $8.5-9m. The company also said it is “well-positioned” with ~$71m of cash on hand.
Eagers Automotive (APE) expects underlying operating profit before tax (PBT) to be around $195m, exceeding the May guidance of $183-189m.
Viva Energy Group (VEA) have provided a trading update. The company expected H1 unaudited underlying group EBITDA (RC) of $614m, representing a 140% rise on last years number. Total Group Sales Volumes came in at 6,822ML, up from 6,487ML a year ago, the Geelong Refining Margin rose to $19.1/bbl from $6.6/bbl a year ago, and the Refining intake is now 21.5MBBL, up from 21.4MBBL a year ago.
Carnarvon Energy (CVN) signs MoU with Horizon Power for the collaboration and development of renewable diesel in regional Western Australia.
Electro-Optic Systems Holdings (EOS) CEO Ben Greene resigns.
KKR’s $88 cash bid for Ramsay Health Care (RHC) is seen as increasingly unlikely.
Spark New Zealand (SPK) sells 70% of TowerCo to Ontario Teachers’ Pension Plan board for NZ$900m.
MyDeal (MYD) – has reported record gross sales of $272.2m for the 2022 financial year. The result was ahead of guidance and was up 24.8% on the same period last year.
Cooper Energy (COE) -raised $61m from retails investors. Total of $244m raised in total.
Carnarvon Energy (CVN) – its renewable diesel business, FutureEnergy Australia, has signed a non-binding memorandum of understanding with the regional Western Australian power provider Horizon Power.

ECONOMIC NEWS/ BOND MARKETS

NAB business survey (July): Conditions +13 (prior: +15); Confidence +1 (prior: +6). Business confidence fell to a below-average +1 index point in June as global uncertainty, looming interest rate hikes and inflation continued to cloud the outlook. Conditions have remained strong across the states and across most industries.

ASIAN MARKETS

Asian markets hit their lowest level in two years.
Wugang in Henan Province announced a citywide lockdown starting July 11, making it the latest Chinese city to shutdown. Wugang is home to Wuyang Iron and Steel Co.
China’s credit growth jumped much more than expected last month to the highest on record for June.

Chinese authorities will start repaying most of the victims in China’s biggest bank scam. Clients from the four rural banks in the central province of Henan and one in Anhui will be repaid “in advance” starting Friday for customers that had up to US$7,400 in deposits following civil unrest.
Tech and casino stocks getting walloped in HK.

US AND EUROPEAN HEADLINES

European markets are expected to open around 0.5%-1% lower. Euro heading for parity with USD.
UK to announce new PM on September 5^th.
Russia has shut part of the Nord Stream pipeline for maintenance. Will it ever reopen?
The French government could pay around EUR8bn for the 16% of EDF it does not already own to nationalise the energy provider.
USD/EUR is at its lowest level since 2002.
The founders of bankrupt crypto hedge fund Three Arrows are nowhere to be found, it seems.
Global population growth hits the lowest since 1950.
Bill Ackman winds down US$4bn SPAC after failing to find a target.
Musk has said Trump should “hang up his hat & sail into the sunset.”
Bernie Ecclestone accused of not declaring overseas assets believed to be worth in excess of GBP400m.
England beat Norway 8-Nil in Women’s European Cup.