ASX 200 fell 38 points to 7033 (0.5%) as market gave up most of the gains this week. Late rally helped somewhat. Resources slid as the AUD strengthened above 71c and 10-year yields soared to 3.40%. BHP fell 0.8%, BSL off 1.6% and FMG fell 0.7%. Base metals eased and lithium mixed after a good week. PLS up 0.3% and AKE down 0.4%. LTR fell 5.6% with SYA under pressure, down 3.5%. Oil and gas stocks moved higher on oil prices, WDS up 3.7% and STO doing well up 0.8%, coal was a merry old soul as SMR delivered with results and rose 10.9%. Gold miners eased back on the stronger dollar hitting bullion prices. Banks were mixed with CBA suffering downgrades and down 0.5%, NAB up 0.8% and the Big Bank Basket relatively unchanged. MQG dropped 0.5%, insurers fell too with QBE down 2.4% and SUN falling 3.9%. Healthcare dived, CSL off 0.8%, RMD down 3.1% and SHL off 3.3%. Industrials were weaker with REITs under pressure, GMG fell 2.8%. WES down 1.7% and consumer stocks generally eased, ALL off 0.7% with tech falling as Nasdaq dropped last night. WTC down 2.5%, XRO off 2.4% and the All-Tech Index off 1.6% with CPU rallying slightly. In corporate news, IAG reported and rose 1.1%. RMD tanked 3.1% on its results and BBN got wind and fell 4.9% on supply chain issues. Nothing on the economic front. Asian markets generally better, Japan back on stream after another holiday and up 2.4%. China down 0.1% and HK up 0.5%. 10-year yields at 3.40%. Bit of a worry.

HEADLINES

  • Winners: 5EA, SMR, RMC, TPW, FCL, PPC, REG
  • Losers: LKE, NVX, AGY, TLX, ARF, NAN, PBH, DMP
  • Positive sectors: Telcos. Oil and gas. Coal.
  • Negative sectors: Iron ore miners. REITs. Healthcare. Insurers. Gold Miners.
  • High 7066 Low 7012. Tried to rally but failed.
  • ASX 200 rises 17 points for the week.
  • Big Bank Basket: Unchanged at $177.80. Bond yields rising helps.  
  • All-Tech index: Down 1.6% CPU steadies
  • Gold: Slips to $2516. Strong AUD hurting.
  • Bitcoin: Drifts to US$23,988
  • Aussie Dollar: Bouncing to 71.20c
  • 10-Year Yield:  Up to 3.40%.
  • Asian markets mixed Japan up 2.4% on return. China down 0.1% and HK up 0.5%.
  • US Futures: Dow up 50 Nasdaq up 39.
  • European markets opening flat.

MAJOR MOVERS

  • 5EA +18.18% secures $60m from US investor.
  • SMR +10.89% merry old soul on results.
  • TPW +5.91% bouncing back.
  • WDS +3.74% oil price rise.
  • MNS +26.03% production begins at iM3NY battery plant.
  • RXM +15.38% copper play.
  • EGR +16.67% doing well.
  • LKE -13.48% shorts back.
  • PBH -6.32% same here.
  • DMP -6.01% stuffed crust.
  • MP1 -6.00% profit taking,
  • LTR -5.56% drifts lower.
  • AVH -15.64% burnt by HY report.
  • PH2 -12.20% falling back to trend.
  • BET -7.29% under pressure.
  • 1MC -10.71% profit taking.
  • Speculative Stock of the Day: Nothing. No brave souls out there.

IN THE NEWS

  • ACCC won’t oppose Woolworths (WOW) acquisition of online retailer MyDeal (MYD).
  • Baby Bunting Group (BBN) full-year pro-forma profit of $29.6m vs consensus of $24.7m. Revenue $507.3m vs consensus $519.7m. Final dividend 9c. Expect comparable store sales growth to moderate and to open at least 6 new stores in Australia for FY23.
  • Insurance Australia Group (IAG) full-year profit $347m in line with preliminary numbers. Gross written premium (GWP) $13.32bn vs year-ago $12.60bn. Underlying insurance margin of 14.6%. Final dividend 5.0c (franked to 70%) vs year-ago 13.0c (unfranked). Repeated FY23 guidance of mid-to-high single digit GWP growth and reported Insurance margin 14-16%.
  • Oz Minerals (OZL) and BHP Group (BHP) had been discussing potential offtake agreements before BHP tabled an offer. The two sides are understood to have been in discussions around a potential offtake agreement from West Musgrave. The Oz Minerals board quickly rejected the $25 offer and the board is adamantly opposed to granting BHP any sort of due diligence.
  • ResMed (RMD) Q4 EPS US$1.49 ex-items vs consensus US$1.45. Revenue US$914.7m vs consensus US$910.6m. Management comments, “looking ahead, we are confident in our ability to grow steadily throughout FY23 and to continue delivering for all stakeholders. We are investing in R&D to drive accelerated adoption of digital health solutions in sleep apnea, COPD, and outside-hospital care, as we progress towards our goal to improve 250M lives in 2025”. Declares Q4 dividend of 44c vs 42c in FY21.

ECONOMIC NEWS/ BOND MARKETS

  • Energy minister Chris Bowen has agreed to east coast gas reform. Ministers agreed to emissions reduction target in the national energy objectives, marking the first change to the objectives in 15 years.

ASIAN MARKETS

  • Samsung heir gets pardon and wants to rejoin the board. Gangnam style.
  • New Chinese IPO Hygon Tech a maker and distributor of computer components, doubled in its Shanghai debut.
  • Luxury watch prices plummet on weak Chinese consumer confidence.
  • Glencore cuts ties with Chinese trader over missing $500mn of copper.
  • Japan’s Prime Minister Fumio Kishida on Friday said he will ask his government to come up with ways to address rising fuel and food prices in the country. Nikkei rises strongly on return from Mountain Bear day.

US AND EUROPEAN HEADLINES

  • UK GDP – Jubilee would have helped. Q2 Prelim GDP -0.1% Q/Q v 0.4% in May. June estimate -0.6% M/M v 0.5% in May. Not as bad as many had forecasts. Services -0.5% M/M v 0.4% in May. Eeyore will be confused.
  • UK energy bills now expected to hit GBP5,000 a year. UK makes emergency plans for blackouts in Winter.
  • Big pharma drug companies, GSK, Haleon and Sanofi in Europe under serious pressure over Zantac litigation issues. Lawyers picnic beckons.
  • Ironic that the Inflation Reduction Act being sent to Biden to sign, is a government spending plan. Makes perfect sense. More spending to cure inflation.

And finally….

Clarence

XXX