ASX 200 fell 38 points to 6650 (-0.6%). Asian markets all weaker and RBA minutes kicked in at 11.30am to help us down a little. Volumes remain modest. Resources turned turtle with iron ore miners mixed on BHP production report, down 1.0%. FMG up 0.7% whilst base metals stocks slipped quietly away, IGO down 1.4%, S32 off 2.3% and LYC down 1.6%. Lithium stocks a little depressed, AKE off 3.3% and PLS down 3.3%. Gold miners going nowhere but energy stocks full of beans, WDS up 3.6%, STO up 1.1% and WHC up 5.3%, Banks were firm on higher bond yields around 3.49% post-RBA, the Big Bank Basket up to $166.66 (0.2%). ANZ still suspended but CBA better by 0.8%. MQG slid 3.3% and insurers under pressure again despite higher bond yields. Healthcare in ICU today, CSL falling 2.0%, RMD down 4.6% and SHL sliding 3.7%. Industrials weak, WOW and COL off with GMG leading REITs lower with the GMG at 2.6%. Tech eased as XRO cratered 6.0%, WTC saw profit taking down 4.9% and the All Tech Index down 2.2%. In corporate news, PDL looks like it will be knocked off with another share bid from PTM. JBH pushed 2.2%  higher despite record results. HUB fell 5.0% on a market update. In economic news, ANZ consumer confidence showed a slight kick higher the RBA minutes curbed enthusiasm. Asian markets weaker with 10-year yields rising to 3.51%.

Headlines

  • Winners: LKE, PDL, MSB, RED, LFS, STX, SLX, WHC, MCR
  • Losers: XRO, PBH, AEF, SUN, HUB, WTC, COH, JHX
  • Positive sectors: Banks. Oil and Gas. Coal.  
  • Negative sectors: REITs. Healthcare. Staples. Telcos. Tech. Base metals.
  • High 6696 Low 6640
  • Big Bank Basket: Drifts to $166.63 (+0.2%)
  • All-Tech index: Down 2.2%
  • Gold: Lower at $2497
  • Bitcoin: Lower at US$21,937
  • Aussie Dollar: Better at 68.48c on RBA minutes.
  • 10-Year Yield: Up to 3.51%
  • Asian markets: Japan up 0.5%. China down 0.2% and HK down 0.9%
  • US Futures: Dow up 36 Nasdaq up 20
  • European markets opening around 0.6% lower.

Major Movers

  • LKE +13.60% bouncing back on short covering.
  • MSB +7.60% more positive test results.
  • WHC +5.25% merry old soul still.
  • VUL +4.57% short covering.
  • PDL +7.79% trading halt ahead of a control transaction.
  • SYR +5.0% battery tech commodities doing well.
  • BCB +18.75% coal price gains.
  • ARL +13.33% quarterly activities report
  • AHQ -67.86% quarterly activities report
  • EOS -5.59% interim CFO.
  • XRO -6.02% sinks
  • PBH -5.99% downturn resumes.
  • MP1 -4.29% takeover rumours subsiding.
  • EML -5.02% ceasing to be substantial shareholding.
  • WTC -4.91% profit taking on broker comments.
  • JHX -4.74% US home building
  • RMD -4.58% disrupted sleep.
  • Speculative Stock of the Day: Nothing on any volume.

In the News

  • Paladin (PDN) has restarted uranium production in Namibia.
  • JB Hi-Fi (JBH) hits record sales, earnings in FY22. Preliminary FY profit $544.9m vs consensus $487.7m. Sales momentum was strong throughout the year, with total sales up 3.5% to $9.2bn. Online sales were up 52.8% to $1.6 billion, representing 17.6% of total sales.
  • HUB24 (HUB) posts record annual net inflows. Q4 FUA $65.57bn vs quarter-ago $68.34bn. Adviser numbers in December 2021 were 3402 and in March 2022 they totalled 3432.
  • Pendal (PDL) – Trading halt pending a potential control transaction.
  • Ampol (ALD) refining margin at its sole refinery, the Lytton plant in Brisbane, surged to $US32.96 a barrel in April-June, a level the company described as “unprecedented”.
  • Magellan Financial (MFG) – New CEO David George will join the board of the company as well as its asset management subsidiary.
  • Djerriwarrh(DJW) has increased its final dividend bringing total dividends for the year ending 30 June 2022 to 13.75c, an increase of 25%. Portfolio performance for the year was negative 6.5% underperforming the S&P/ASX 200 Accumulation Index which returned negative 5.1%.

Economic News/Bond Markets

  • Consumer confidence has notched its first weekly improvement since June, gaining 0.2% last week. ANZ head of Australian economics David Plank said strong labour data last week was the main contributor.

RBA minutes

  • Noted inflation had increased significantly and was expected to increase further in the near term.
  • Inflation forecast to peak later in 2022 and then decline back towards the 2 to 3% range in 2023.
  • A full set of updated forecasts will be published in August following the release of the June quarter CPI.
  • Economic growth supported by household and business balance sheets that are generally in good shape.
  • Job vacancies and ads at high levels with further declines in unemployment and underemployment expected.
  • Recent spending data is positive, although household budgets are under pressure from higher prices and higher interest rates.
  • The household saving rate is also still higher than it was before the pandemic.
  • Global outlook remained clouded by the war in Ukraine and its effect on the prices of energy and agricultural commodities.
  • Mentioned ongoing uncertainties related to COVID-19, especially in China.
  • Arguments for raising interest rates by 50 basis points were stronger than 25bp.
  • Interest rates still very low for an economy with a tight labour market and facing a period of higher inflation.
  • Labour market and inflation the key focus points for making policy decisions in the coming months.

Asian Markets

  • New COVID-19 cases in China jumped to almost 700. Shanghai widens testing – be better to widen vaccinations.
  • The Indian rupee fell to a record low as foreign investors further sell down the nation’s equities.
  • Top European leaders haven’t responded to an invitation from President Xi Jinping to meet him in Beijing later this year, according to the South China Morning Post (SCMP)..

US and European Headlines

  • UK unemployment numbers very solid. Wage data also firm.
  • Softbank has put its UK IPO on hold. Possible US listing instead.
  • SAS reaches a pay deal with its pilots.
  • Delta has placed an order for 100 737 Max.
  • UK set for a record breaking 40 degree day. Rest of Europe swelters too.
  • Gazprom declares force majeure on several European clients. Cuts gas supplies. Nord Stream 1 now cut by 40%.
  • GM reveals electric Chevrolet Blazer priced starting at US$45,000.
  • Goldman Sachs CEO David Solomon said that inflation is deeply embedded in the economy and it’s unclear whether the situation will improve later this year.
  • Novartis Q2 Core income up 5%. Higher sales.
  • Ukraine warns of big cut to wheat harvest if Russian blockade continues.
  • Nancy Pelosi to visit Taiwan next month.
  • The number of travelers reporting stranded luggage this summer jumped 30% from 2019, according to a Spanish insurer. Delta also deployed a wide-body plane without passengers to collect 1,000 stranded bags.
  • Apple up 295% in five years. Investors should still be pretty happy.

And finally….

Clarence

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