Monday 14th November – Australian Market Wrap | Beeks Downunder-Because not all financial news is boring!

ASX 200 finished down 12 points to 7146 (0.2%) as Fed official talks tough on rates again. USD rises, gold slips and yields up too. Banks wore the brunt of the selling as the bifurcation in the market kicked off again. The Big Bank Basket fell to $184.48 (-0.8%). Insurers also hurt with IAG down 2.4%, QBE down 4.0% and PPT off 5.8% on-court moves. Healthcare too in ICU with CSL down 2.0%, COH off 4.2% and RMD falling 3.4%. Industrials slipping as TLS fell 3.5% on a management change, staples eased back, WES down 2.1% and COL off 2.0%. REITs slipped too, SCG down 3.1%. Tech stocks mixed as WTC fell 1.7% and XRO resumed its slide down 3.9%. The All-Tech Index dropped 0.5%. Resources though were a different story although off highs as USD gathered strength. Iron ore in demand, BHP up 4.6%, FMG up 10.1% with base metals also doing well, S32 up 5.9%, CIA up 12.9%, OZL up 1.1% and selected lithium plays better. CXO marching 11.7% ahead with LTR in demand. Energy stocks better as WDS ran 1.5% with WHC up 3.2% the best of the coal stocks. In corporate news, ELD were smashed 22.9% on an uncertain outlook and the CEO retiring in the next 12 months. WGO rose 16.7% on a takeover from BPT. IVZ had another strong rise on drill results, RMS chopped by 6.5% on a 3-year production outlook and NEA fell 5.8% on churn issues. FLT fell 3.8% on underwhelming growth numbers and a threat to airline commissions. Nothing on the economic front, Asian market mixed as Japan fell 0.9%, China up 1.1% and HK up 2.9%. 10-year yields at 3.75%. Dow Futures down 69 points.

HEADLINES

Winners: CIA, STX, CXO, FMG, GRR, RNU, LFG
Losers: ELD, IPH, RMS, PPT, NEA, CUV, GL1.
Positive sectors: Iron ore. Lithium. Base metals. Oil and gas.
Negative sectors: Insurance. Banks. REITS. Consumer stocks. Healthcare. Tech.
High 7197 Low 7146
Big Bank Basket: Closed down at $184.48(-0.8%)
All-Tech index: Down 0.5%
Gold falls to $2640
Bitcoin: Slides to US$16,038. Heading lower.
Aussie Dollar: Higher at 66.76c
10-Year Yield: Higher at 3.75%
Asian markets: Japan down 0.7% HK up 2.9% and China up 0.5%.
US Futures: Dow down 79 Nasdaq down 65

MAJOR MOVERS

CIA +12.92% iron ore bounce.
GRR +9.33% IO doing ok.
RNU +7.84% Battery material gains.
CXO +11.68% CFO steps down.
LTR +6.80% cruises through resistance.
IVZ +39.58% total depth reached with additional gas shows.
EMV +10.37% first portable brain scanner delivered.
WGO +16.67% BPT bids 20c.
MLX +6.90% base metal exposure.
ELD -22.94% no guidance and numbers a bit light on.
RMS -6.45% 3-year production outlook.
NEA -5.80% litigation and trading outlook.
ATC -8.70% slipping slightly.
PPT -5.83% update on court process of scheme.
Speculative Stock of the Day: Tambourah Metals (TMB) +29.0% Multiple pegmatites confirmed at RJ 101 Lithium project.

IN THE NEWS

Ramelius Resources (RMS) – Has provided a 3-year production guidance, forecasting to produce between 250 and 290 thousand ounces of gold annually.
Telix Pharmaceuticals (TLX) – Announced that they have entered into an agreement to acquire Optimal Traces, a radio chemistry development business, intending to boost in-house development capability. The purchase cost has not been released at this time.
ALS (ALQ) – Has forecast an increase in underlying profit to between $300m and $320m. In the first half, underlying profit rose 29.3%.
Oz Minerals (OZL) – Provided update on MHP study, proving a premium nickel content with “ultra-low impurities”. Potential NPV $250m to $460m
Orica (ORI) – To acquire a 5% stake in Alpha HPA (A4N) for 44c a share. The acquisition hopes to expand into the US to establish a new manufacturing facility to produce high-quality aluminium products.
Elders (ELD) – has increased net profit 9% with sales increasing 35%. The board Chair said “Australian agriculture is in a strong position. Good seasonal conditions, strong commodity prices, and record demand for Australian agricultural products are all contributing to a very favourable production environment and a sense of confidence and excitement for the years ahead”. No guidance given.

ECONOMIC NEWS

Deutsche Bank says Australia will enter a recession next year, which it defines as a full percentage point increase in the unemployment rate. Deutsche projects headline inflation to end next year at 5.3%, higher than the RBA’s assumption of 4.7%, and sees the cash rate reaching a peak of 3.35% by February. Deutsche doesn’t expect the RBA will be in a position to cut rates until mid-2024.
Australia has the highest gambling losses per capita of any country in the world. Last year, Australians gambled away approximately $25bn. We have less than 0.5% of the world’s population but almost 20% of its poker machines.
Successive governments have failed to significantly curb betting advertising, resulting in gambling ads being played 948 times a day on free-to-air TV in Victoria alone. This doesn’t count online ads, which exist in the same ecosystem as the fastest-growing form of gambling addiction – online sports betting.

ASIAN MARKETS

HK is up as the property sector bounces on media reports on a number of additional measures to be introduced to support the real estate market’s recovery.
Softbank plunged as much as 12% Monday in its biggest intraday drop since the outbreak of the pandemic in early 2020, after the company failed to announce a widely-expected stock buyback.
Vision Fund segment posted a $7.2bn loss in the July-September quarter, following a record US$17bn loss in the preceding period.

US AND EUROPEAN HEADLINES

Joe Biden and Xi Jinping are set to meet in Bali later. Quick catch-up before the buffet begins.
Democrats will keep control of the Senate in the 2022 midterm elections, NBC News projected.
Crypto exchanges are moving quickly to soothe nerves on liquidity. Two US accounting firms under scrutiny on FTX audit.
UK budget on Thursday is set to raise taxes and cut spending. There’s a GBP55bn hole in your budget dear Rishi, dear Rishi. So fix it dear Jeremy! So fix it he did.

And finally….