ASX 200 pushes another 16 points ahead to 6823 (+0.3%), as CPI comes in below expectations. Core inflation at its highest since 1991 at 4.9%. Good news. Relative. Banks led the market higher as the Big Bank Basket rallied to $173.17 (+1.7%), with ANZ up 0.4% and ANZR up 2.9%. Insurers slightly higher with IAG better by 1.1%, MQG dropped 1.1% though. Healthcare better, with CSL up 1.8% and RMD up 0.7%. Industrials mixed as WES rose 0.9%, WOW up 0.7% and TCL rose 1.9%. REITS slightly better, 10-year yields dropping to 3.28%. Techs were flying, risk appetite is back. The AllTech Index was flat, but second-line June casualties are roaring ahead. BNPL SZL was up 95.82% before a trading halt, ZIP up another 21.0%, FLN up 8.6% CTT up 11.5% and ALC up 14.8%. Quarterly reports better than expected. In resources, it was a red day with smatterings of green. Iron ore stocks eased, BHP down 2.0% RIO off 2.0% with LYC off 0.7%. Lithium stocks were mixed, LTR down 0.8% but AKE up 2.6%. Coal stocks mixed and oil and gas flat. Gold stocks twitching. In corporate news, plenty of quarterlies, SRX began life ex ILU. CMM rose 8.8% on its quarterly report. On the economic front, CPI came in at 6.1%, below forecasts and 10-year yields fell again. Good sign and one reason why tech is rallying hard. 50bps now locked in. Asian markets mixed Japan up 0.3%. China up 0.1% and HK down 1.1%.

Headlines

  • Winners: ZIP, CMM, BRN, RED, CUV, SLR, OBL.
  • Losers: PPH, CCX, 29M, CIA, OML, ILU, ARU, BFL.
  • Positive sectors: Banks. Consumer stocks.
  • Negative sectors: Iron ore. Oil and Gas.
  • High 6833 Low 6779 Tight range again. Fed the key. Still quiet.
  • Big Bank Basket: Roars ahead to $173.17 up 1.7% ANZ Rights trading slightly higher.
  • All-Tech index: Flat. Second liners bought aggressively.
  • Gold: Steady at $2477
  • Bitcoin: Steady at US$21,187
  • Aussie Dollar: Dropped on CPI to 69.32c
  • 10-Year Yield:  Slightly lower at 3.28%. CPI better than expected and may have peaked.
  • Asian markets: Japan up 0.3%. China up 0.1% and HK down 1.1%
  • US Futures: Dow up 159 Nasdaq up 170
  • European markets opening green on screen.

Major Movers

  • ZIP +20.98% the rally keeps on zipping along.
  • CMM +8.75% quarterly activities.
  • SLR +6.02% quarterly activities report.
  • BRN +8.62% quarterly report and director’s interest.
  • TER +4.35% coal price rise continues.
  • DEG +3.77% gold stirs.
  • ALC +14.81% quarterly report and presentation.
  • FLN +8.57% tech rally and results commentary.
  • BTH +7.63% Appendix 4C.
  • DCG +17.39% another profit warning.
  • CTT +11.46% second line tech is flying.
  • SZL +95.83% trading halt after doubling.
  • 29M -4.95% selling after quarterly
  • OML -4.44% becoming a substantial.
  • ILU -4.32% ex-bonus
  • NTO -5.95% GS says buy
  • PNR -10.00% quarterly disappoints.
  • SLX -3.82% profit taking.
  • Speculative Stock of the Day: Prospect Resources (PSC) up 66.02% on huge volume after ex capital return and distribution totalling 96c.

In the News

  • Rio Tinto (RIO) first-half results out after the bell. Underlying earnings were $8.63bn vs consensus of $8.37bn. Declared a dividend of $3.837/share – 4% fully franked. 
  • Betmakers Technology Group (BET) FY revenue $91.6m, +370% vs a year ago.
  • Novonix (NVX) operating cash loss of $7.9m on sales of $2.5m for the June quarter. For the 12 months to June 30, operating cash outflows reached $43.8m.
  • Orica (ORI) released targets at its investor presentation: Gearing between 30% and 40%. Dividend payout ratio between 40% and 70% and annual capital expenditure between $340 and $360m.
  • IGO (IGO) hits production and cost guidance for FY22, profit and revenue missed consensus. Full-year Nova nickel production 26,675t vs guidance 25-27Kt. Full-yearNPAT $330.9m vs consensus $407.2m.Revenue $900.6m vs consensus $941.8m.
  • St Barbara (SBM) increased production 40% in the June quarter from the previous three-month period, helping to reach its target for the financial year.
  • Perpetual (PPT) confirms it has received two unsolicited non-binding indicative offers for its corporate trust business
  • Integral Diagnostics (IDX) reports preliminary FY underlying NPAT $21.7m vs consensus $26.3m

Economic News/Bond Markets

  • Q2 inflation came in at 6.1%, lower than estimates of 6.3%. New dwellings (+20.3%) and automotive fuel (+32.1%) the most significant contributors. The annual rise in the CPI is the largest since the introduction of the goods and services tax (GST).
  • International Monetary Fund has cut its forecast for global economic growth in 2022 from 3.6% to 3.2%.

Asian Markets

  • China’s Covid-19 infections rebounded, with an increase in cases in the south. Nationwide, cases were 868 for Monday, CCTV reported, up from 680 a day earlier.

US and European Headlines

  • All about the Fed tonight.
  • Biden to speak with Xi on Thursday as relationship worsens.
  • Credit Suisse names Ulrich Körner as chief executive.
  • Italy told to stick to EUR200bn Covid recovery plan after Draghi exit.
  • Deutsche Bank beat market expectations to post an eighth straight quarter of profit on Wednesday, recording a second-quarter net income of EUR1.046bn euros (US$1.06bn).
  • The Ferrari CEO has moved to allay fears the firm’s upcoming electric offering will compromise on performance. The company has said ICEs will have a 40% share in its “product offering” by the year 2026, with hybrid and fully electric vehicles making up 60%.

And finally…

Clarence

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