ASX 200 rallied 29 points to 6651 (+0.4%) despite US CPI and a strong jobs number locally. Resources firm., Banks weak ahead of US reports tonight. The Big Bank Basket fell to $163.39 (-1.3%).  CBA off 1.5%, MQG falling 0.2% and insurers under pressure, SUN down 0.2% and QBE unchanged Industrials firm with CSL up 0.8%, RHC up 1.1% in the healthcare space, TLS rallied 0.8% on its acquisition finalised. ‘Old Skool’ platform stocks better, SEK up 2.7%, REA up 2.1% and CAR doing well up 1.4%. Tech stocks better too, WTC up 2.5% and XRO going to hero up 2.0%, maybe some valuation upgrades given ANZ moves on MYOB. All Tech Index up 2.2%. Resources were better led by coal stocks, WHC up 6.5%, TER up 9.6% and SMR up 4.3% as coal prices remain elevated. Rumours that China will abandon its coal ban. BHP and FMG doing well as iron ore rise, Base metal stocks also in demand, IGO up 2.4%, MIN up 5.7% and IGO doing well up 2.4%. Lithium stocks marched ahead, PLS up 3.8% on a positive BMX result, AKE up 2.7% and oil and gas stocks better with WDS up 1.6% and STO rallying 1.5%. In corporate news, DTL rose 9.9% on a positive upgrade, CHN up 8.4% on director buying, LKE returns and falls 10.4% on short seller attack. In economic news, jobs data showed a remarkably strong economy with 3.5% unemployment. Lowest in 41 years. Asian markets, mixed with Japan up 0.2%, China down 0.2% and HK down 0.7%.

Headlines

  • Winners: SLX, YAL, DTL, TER, IMU, CHN, CRN, SYA
  • Losers: LKE, BGA, SBM, PPM, SIG, AAC, PDL
  • Positive sectors: Iron ore. Base metals. Oil and gas. Coal. Tech.
  • Negative sectors: Banks. REITs
  • High 6659 Low 6612. Narrow range. Lacks conviction.
  • Big Bank Basket: Falls to $163.39 (-1.3%)
  • All-Tech index: Up 2.2%
  • Gold: Steady at $2557
  • Bitcoin: Rallying back to US$20,138
  • Aussie Dollar: Steady at 67.52c.
  • 10-Year Yield:  Rises to 3.40%
  • Asian markets: Better with Japan up 0.2%, China down 0.2% and HK down 0.7%
  • US Futures: Dow down 56 Nasdaq down 47
  • European markets pointing to a choppy start.

Major Movers

  • DTL +9.92% Net profit grew 19% to $44m. Pre-tax profit of at least $6m
  • SLX +10.66% back on.
  • YAL +10.29% coal stocks merry again on Chinese moves.
  • CHN +8.42% buyers back.
  • CNB +18.38% Greater Duchess update.
  • EML +12.30% becoming a substantial holder.
  • TIG +13.33% TER +9.56% Chinese coal hopes.
  • WHC +6.49% highest since 2018.
  • LKE -10.37% short seller response.
  • BGA -8.45% business update.
  • MIR -1.87% gives back yesterday.
  • EXP -9.52% fails to open parachute.
  • Speculative Stock of the Day:  Nothing again. Maybe Panther Metals (PNT) +28.95% Bonanza peak gold assays at Burtville East.

In the News

  • ACCC will not oppose the proposed acquisition of One Rail by Aurizon (AZJ), pending divestitures
  • Lake Resources (LKE) responds to J Capital short report. Rejects claims that its direct lithium extraction technology (DLE) is inadequate for commercial scale lithium production at its Kachi Project in the Andes, Argentina. Twitter fight between LKE and JCap breaks out.
  • Netwealth (NWL) says total funds under administration (FUA) fell 3.4% in the June quarter to $55.7bn due to negative market movements equal to $4.5bn.
  • Australian Ethical Investment (AEF) FUM at the end of June $6.2bn, down 9% vs a quarter ago.
  • Pilbara Minerals (PLS) secures $US6,841 a tonne for 5000dmt of lithium cargo.
  • Uniti Group’s (UWL) proposed scheme with Morrison / Brookfield Consortium receives FIRB approval.
  • Bega Cheese (BGA) confirms FY22 normalised EBTIDA guidance of $175-190m, reflecting growth of 28% on FY21. In FY23, EBITDA of $160-190m is expected, added farm gate prices in Victoria for FY23 have further increased to a level of ~30% higher than FY22 prices.
  • Telstra Corp. (TLS) completes the previously announced acquisition of Digicel Pacific.
  • Objective Corp (OBL) – 2022 net profit rose 30% to $21mand revenue increased 12% to $106.5m Annual recurring revenue for the software group increased by 15% to $85.5m, and EBITDA by 20% to $30.6m.
  • Pacific Smiles (PSC) – earned $11.3m in full-year 2022 earnings, and total patient fees were up 5.3% in June, or 0.6% on a same-clinic basis.
  • Lendlease (LLC) and its joint venture partner, Mitsubishi Estate Asia, will acquire One Circular Quay for $800m.
  • Select Harvests (SHV) –  says it has contained the Varroa Mite incursion and expects to sell its almonds at an average price of $6.64/kg in 2022.

Economic News/Bond Markets

  • Labour data for June: Employment change: +88,400 vs estimates +30,000, unemployment rate: 3.5% vs estimates 3.8%. This is the lowest unemployment rate since August 1974. Eighth consecutive rise in employment
  • Nomura expects the Reserve Bank to deliver a 75bps rate hike at its next meeting on 2nd August. Indeed, if Q2 CPI inflation data deliver a significant upside surprise on 27 July, it would not rule out a 100bps move.

Asian Markets

  • China is making 7.2 trillion yuan (US$1.1 trillion) in funds available for infrastructure spending. Citigroup estimates overall growth in fixed-asset investment will reach around 6% this year, which would contribute 2% to China’s gross domestic product growth
  • Singapore has tightened monetary policy in a surprise announcement today.
  • Japanese Chief Cabinet Secretary expresses concern over Yen weakness.
  • Chinese home buyers have stopped mortgage payments on at least 100 projects in more than 50 cities as of Wednesday.
  • Tokyo has raised the CV19 alarm to its highest level as cases surge.

US and European Headlines

  • Italian government looking dicey as 5-Star rules out supporting the government in a no-confidence vote. Ciao.
  • Europe heading for lukewarm open.
  • Swedish CPI up 8.7% Y/Y v 8.3% forecast. ECB still yet to move.
  • SAS enters 11th day of strike.
  • JP Morgan and MS to report today.
  • US June PPI 0.8% expected.
  • Biden touches down in Israel as he begins his Middle East tour.
  • Crypto lender Celsius files for bankruptcy.
  • Panasonic to build US$4bn battery plant in Kansas to meet Tesla demand.
  • Risi Sunak now the front runner to replace Boris.

And finally….

Clarence

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