ASX 200 fought back to close down only 5 points at 7142 (0.1%). Once again it was the tale of two sectors. Resources on the nose after some good rises, lithium stocks depressed as Goldman Sachs issued another sell note citing oversupply from 2025. CXO, PLS and AKE whacked hard with second liners also in the seller’s sights. Stop losses and profit taking also at play. Base metals eased too with OZL down 1.0% and S32 off 1.1%. Less damage than lithium and rare earths as money flowed into laggards, iron orestocks saw some selling pressure BHP down 0.2% and FMG off 0.8%. Gold miners steady and selective. DCN up 6.7% with DEG off 1.1%. No real damage in the sector with bullion flat. Oil and gas eased, WDS down 1.4% and coal stocks mixed. In the banking sector, CBA up 1.3%, was the focus after ok results, only Q1 so no dividend announcement and not much detail, the Big Bank Basket $185.16 (0.4%) as NAB went ex-dividend. MQG and the insurers better, IAG up 1.3%. MPL pretty much unchanged. Industrials slightly weaker, REITs down led by GMG, healthcare better after falls yesterday CSL up 1.5% and RHC up 1.3%. Tech slightly higher XRO up 3.1%. The All–Tech Index up 1.3%.  On the corporate front, AKE held its AGM, AGL saw four new MCB nominated directors join the board, DGL rose 16.7% on its AGM and IPL rose 5.9% on decnet results. In economic news we had RBA minutes. Not sure we learnt much, Asian markets continued higher on Chinese optimism. TSMC a stand-out as Buffett buys in and tech sector doing well. 10-year yields slightly higher at 3.77%. Dow Futures up 127 points.

HEADLINES

• Winners: 360, MGH, IMU, MSB, IPL, TPW, ELD
• Losers: CXO, AKE, SYA, PLS, LYC, LKE, IGO, RIC
• Positive sectors: Banks. Insurers. Healthcare. Tech.
• Negative sectors: Iron ore. Lithium. REITs. Oil and gas.
• High 7144  Low 7114 Narrow range again.
• Big Bank Basket: Closed up at $185.16(+0.4%)
• All-Tech index: Down 0.5%
• Gold falls to $2644
• Bitcoin: Rallies to US$16,781
• Aussie Dollar: Higher at 66.98c
• 10-Year Yield: Higher at 3.77%
• Asian markets: Japan up 0.4% HK up 3.6% and China up 1.6%.
• US Futures: Dow up 118 Nasdaq up 85

MAJOR MOVERS

• MGH +9.73% despite downgrade yesterday.
• UMG +4.49% China moves. Investor presentation.
• ELD +4.70% bounce back from carnage yesterday.
• IMU +7.69% investor presentation.
• AGY +3.70% escapes the lithium rout.
• MSB +7.1% amendment to constitution.
• DGL +16.67% AGM presentation.
• WR1 +11.31% win some win some – raising $6.8m
• DCN +6.67% GMD – offer extended again.
• MSL +69.7% takeover from Pemba.
• CXO -15.82% AKE -12.36% PLS -8.70% Goldman Sachs back with another report.
• AGL -1.17% MCB wins four board seats. Second prize was five board seats.
• MAY -14.29% appraisal program for Block 9 Cuba.
• Speculative Stock of the Day: 1VG +30.56% high-grade ionic clay REE extension. bonus SSOTD WSP+31.31% cash flow positive following internal restructure.

IN THE NEWS

• Incitec Pivot (IPL) – Reported a 45% increase in revenue for the FY compared to last FY year. With NPAT increasing 186% to $1.02bn. Record results for the company as they continue to look towards demerging the fertiliser and explosives components of the business. An on-market share buyback of up to $400m has been approved to be conducted over the next 12 months.
• Lifestyle Communities (LIC) – Lifestyle communities provide FY23 updates at AGM. Key points noted, 3 out of 7 planned project launches were completed, underlying profit rose 69% from $36.4m to $61.4m, and 3-year settlement guidance of 1,400 to 1,700 settlements between FY23 and FY25.
• United Malt Group (UMG) – Has released financial results for year-end, with a 13.9% increase in revenue, primarily due to the higher barley prices. With the outlook that “United Malt continues to expect a material increase in earnings in FY23”. With the completion of the Scottish expansion due and better crop conditions in North America. UMG has reaffirmed FY23 guidance, with EBITDA in the range of $140m to $160m.
• IGO Limited (IGO) – IGO Limited has recommenced diamond drilling at the Lake Mackay Project. Drilling is expected to take approximately 2-3 weeks to complete, with results expected to be released during the Northern Territory wet season.
• Life360 (360) – Reported a 39% growth in Monthly active users, the largest ever jump, while consolidated revenue grew 92% to US$57.2. While EBITDA loss was equal to $US9.4m, over double that of the previous corresponding quarter. At the time of writing this, the stock price has plummeted 9.2%, with the EBITDA loss not impressing investors.
• Allkem (AKE) – Reported a 9x increase in revenue with a 4x increase in NPAT year on year. With AKE noting “Strong customer relationships and long-term contracts”.
• AVZ Minerals (AVZ) – AVZ Minerals has requested an extension to their voluntary suspension dated 31 October 2022 to the commencement of trade on 15 December 2022 regarding the finalisation and release of an announcement to their mining exploration rights for the Manono Lithium and Tin Project (Manono Project).
• OPEC has now cut its oil demand forecast for the fifth time since April. Economic challenges, including inflation and rising interest rates, were cited as reasons for the decrease. OPEC now expects oil demand to increase by 2.55m barrels per day or 2.6%, in 2022, and expects oil demand next year to rise by 2.24m bpd, which is 100,000 bpd lower than the previous forecast. The energy sector has been the best performer across a number of periods now and is currently within 10% of its 5-year high. Woodside Energy (WDS) is trading a hair off its 5-year high, and Santos (STO) was 2.7% off its 5-year high in June but has since fallen away. The energy sector and energy stocks are a stone’s throw from their 5-year highs, which in most cases were pre-covid levels. Oil prices fell around 3.5% overnight, and it seems falling energy prices are one of the only things that could unravel the energy sector.

ECONOMIC NEWS

• The RBA said money markets are a better guide to the trajectory of interest rates after an assessment of pandemic-era forward guidance found its use presented “substantial” communication challenges.

ASIAN MARKETS

• Japanese GDP fell 1.2% – weak yen and high inflation eroded Japanese consumers’ buying power.
• Chinese Retail sales fell by 0.5% in October from a year ago — the first decline since May — and industrial production grew by 5%, data from China’s National Bureau of Statistics showed Tuesday.
• Fixed asset investment for the first 10 months of the year grew by 5.8%, a touch below expectations for maintaining the same pace as September, with a 5.9% increase year-on-year.
• At G20, Joko Widodo warned that 2023 could be an even more challenging year unless action is taken on food security including fertilizer scarcity.
• Chinese property stocks soar on hopes of turning point for sector.

US AND EUROPEAN HEADLINES

• G20 draft communique agreeing to reject an ‘era of war’.
• Walmart tonight.
• Big night for Trump. Kari Lake loses in Arizona.
• Google to pay $391mn in its biggest privacy settlement
• Berkshire Hathaway buys US$4bn stake in chipmaker TSMC

And finally…..pushed for time..

Clarence

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