ASX 200 pushed another 34 points higher to 6845 (+0.5%) despite bank weakness after ANZ results. Six-week high. MQG tomorrow. The Big Bank Basket fell to $183.08 (-0.1%). CBA managed a gain of 0.4% as it’s out of cycle. ANZ down 3.3% on results and outlook. MQG up 0.3% with insurers also doing well, IAG up 1.0% and QBE rallying 1.1%. MPL steadied after the rout yesterday. Fund managers mixed, MFG down another 0.7%.  Healthcare stocks mildly positive, CSL up 0.2% and RMD rising 0.8%. Industrials firm but unspectacular, WOW up 0.7%, WES up 0.4% and TCL doing well up 1.3% on director buying. Tech slightly better, while resources were higher leading the market. BHP up 2.4%, RIO up 0.8% and FMG falling 0.4% on its quarterly. Base metal stocks and lithium slightly firmer as S32 recovered some lost ground up 3.0% and PLS rallied 2.6% after 7% sell-off yesterday. Gold miners heading higher, NCM up 3.2% and NST rallying 4.3%. Oil and gas stocks better as crude rose, WDS up 3.2% and STO rallying 2.0% with coal stocks back to their merry old souls. In corporate news, ANZ dominated, LYC rose 5.6% despite issues with the quarter, ACL revealed a cyberattack on data, falling 5.4%, CXO missed out on Musk’s signature, losing 5.2%, WBT soared 25.8% on another step along the ReRam road. On the economic front, economists were trying to grab headlines with RBA predictions for next week. 50bps rise now firming. Most got it wrong last time anyway. Asian markets mixed and 10-year yields slipped slightly lower. Dow futures are up 172 points.

HEADLINES

• Winners: RMS, SLX. SFR, RRL, HSN, NIC, PRU, PNV, LYC
• Losers: ILU, ACL, CXO, BOQ, STA, CXL, TIE, PPM
• Positive sectors: Iron ore. Gold miners. Energy. Oil and gas. Insurers.
• Negative sectors: Poker machines. Big Three banks.
• High 6874 Low 6824 Narrow range considering.
• Oil prices slipping slightly in Asia.
• Iron ore futures fell with the Dalian benchmark contract hitting an eight-week low.
• Big Bank Basket: Closed up to $183.08(0.1%)
• All-Tech index: Slightly higher by 0.7%
• Gold: Falls to $2557
• Bitcoin: Higher at US$20,757
• Aussie Dollar: Better at 65.01c
• 10-Year Yield: Lower at 3.87%
• Asian markets: Japan down 0.5%, HK up 1.7% and China down 0.2%
• US Futures: Dow up 172 Nasdaq up 52 Apple due tonight.
• European markets opening slightly lower. Credit Suisse results.

MAJOR MOVERS

• RMS +8.40% gold miners back in demand.
• RRL +6.85% quarterly activities report.
• LYC +5.57% water under the bridge. Issues may be behind it.
• GOR +5.15% investor presentation.
• CIA +4.80% quarterly report
• WBT +25.53% qualifies ReRam module.
• BTH +24.53% Appendix 4c
• RED +12.90% quarterly representation.
• NTO +7.45% media speculation on potential takeover.
• ACL -5.37% cyber incident.
• CXO -5.15% No offtake agreement with Musk.
• MAY -20.78% total depth reached at Zapato
• ESS -12.84% Pioneer Dome Assays.
• TBR -6.18% quarterly report.
• Speculative Stock of the Day: Koba Resources (KOB) +136.36% Trading halt pending clarification of recent high stakes pegmatite project in Canada.

IN THE NEWS

• Lynas Rare Earths (LYC) – First-quarter production down vs the previous quarter, with a challenging outlook. Total sales revenue for the quarter was $163.8m vs quarter-ago sales of $294.5m. LYC outlined a difficult outlook, citing continued significant operational challenges, which include a complete outage of water supply in Malaysia. The group also forecasts the Kalgoorlie Rare Earths Processing Facility costs to increase by approximately 15% over the initial project budget estimate.
• Karoon Energy (KAR) – Reported first quarter production volume of 1.29 mmbbl vs 1.08 mmbbl last quarter. KAR lifted the lower end of its full-year production guidance to between 7.5 and 9.0 mmbbl, previously the bottom end was 7.0 mmbbl.
• ANZ Bank (ANZ) – reported a statutory NPAT of $7.12bn, a 16% jump on last year, while cash profit rose 5% year-on-year. The group announced a 74c final dividend, bringing the final dividend to 146c, up 4c on last year. ANZ reported a full-year net interest margin of 1.8% in line with consensus.
• Fortescue Metals Group (FMG) – Reported first-quarter total iron ore shipped 47.5M wmt – a record high for first-quarter shipments. FMG provided a guidance update for FY23, with shipments C1 costs and CAPEX all remaining unchanged. Shipments are expected to be between 187Mt and 192Mt, which includes 1Mt from Iron bridge. C1 costs for hematite are expected to be between $18 and $18.75/wmt, and CAPEX is expected to be between $2.7bn and $3.1bn.
• Corporate Travel (CTD) – Guidance unchanged – Revenue $810m adjusted EBITDA $265m. Expects a similar 1H profit skew to FY22, c30%/70%, on-track No noticeable impact from economic conditions – Consistent theme: demand for corporate travel exceeding supply, travel rebounds rapidly with travel impediment removal & reliability in airline and airport experience – Further material recovery levers: supply constraints, client recovery, synergy & scale benefits, organic growth -Two regions already surpassed pro-forma FY19 despite constraints, reinforcing CTM market share gains. Zero debt, significant cash holdings building since 30 June 2022 consistent with 1Q23 profit generation.
• HUMM Group (HUM) – Has reported 1Q23 business update detailing an increase in the volume of 29% to $988.2 million, with a net loss of $19.3 million, a decrease of 20% from the previous corresponding quarter. Despite a 24% growth in receivables. Looking forward, the company claims to be looking to reduce the cost base and manage the rising interest rates. Humm opened earlier this morning on the back of positive news.
• JB Hi-Fi (JBH) – First-quarter sales update shows continued sales momentum and strong sales growth over a three-year period. Total sales growth in Australia for JBH was 14.6% YoY, while NZ outpaced Australia with a 27.7% growth in sales YoY. The Good Guys also experienced strong sales growth with a 12.3% YoY growth rate
• Newcrest Mining (NCM) – Today released a third-quarter report with copper and silver production falling to 362Koz and 32Koz, respectively, from the previous quarter. All-in sustainable costs have increased to $1,098 an ounce from $896 in the previous quarter. Despite this NCM has opened strongly with the news that organic growth is strong and the Cadia two-stage expansion is on schedule, and Brucejack, Red Chris and Havieron providing strong drilling results, with the potential for resource growth.
• Telix Pharmaceuticals (TLX) – Has announced they are to collaborate with the University of Queensland to develop a radiolabelled molecule targeting checkpoint protein.
• G.U.D Holdings (GUD) – Strong positive start to the year as GUD provides a trading update at their AGM today, with the automotive aftermarket segment seeing good demand. OEM orders have seen a decline in demand due to supply constraints, yet still slightly higher than 4Q22.
• Corporate Travel Management (CTD) – Looks like investors were hoping for more of a bounce back in corporate travel, shares are trading up 1.3%. The sector is well and truly back up and running – so where is the growth from COVID?
• South32 (S32) CEO Graham Kerr said the company is well positioned for 2023, given its growing production and strong balance sheet.

ECONOMIC NEWS/ BOND MARKETS

• Economists lowered Australia’s annual growth forecast for 2023, the median estimate for gross domestic product next year was reduced to 2% from a prior 2.3%.
• Inflation remains the biggest concern according to the survey.

• Indexed swaps imply a peak rate of 4.2% in July 2023, while economists see the central bank halting tightening at 3.5%.
• Barrenjoey is calling for a 0.5% point increase to the cash rate at the Reserve Bank policy meeting on Tuesday, saying this will show that the RBA is truly responsive to incoming data and that “the facts have changed”.
• Westpac chief economist Bill Evans forecasted the cash rate on Melbourne Cup day, taking it to 3.1% with a terminal rate of 3.85%.

ASIAN MARKETS

• Growth in Southeast Asia’s internet economy is slowing after years of expansion. Online spending in the region will rise about 20% this year to US$200bn, research from Google, Temasek Holdings Pte and Bain & Co. showed, slowing from 38% a year earlier.
• South Korean growth weakens as global slowdown hits exports.

US AND EUROPEAN HEADLINES

• Musk tells his Twitter staff that he doesn’t plan to sack 75% of them.
• Sunak reinstates the fracking ban in England.
• US Senator Sherrod Brown this week sent a letter to Fed Chair Jerome Powell, expressing concern about the impact interest rate hikes could have on employment.
• Credit Suisse results, cutting cost base and refocus.
• Volvo Q3 car sales fall 8% to 138k vehicles.

Clarence

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