ASX 200 slipped 34 points to 7291 (0.5%) after fighting back from early US-inspired losses. RBA moved rates 25bps higher as expected, and the market sold off after the announcement. Bank slid finally after holding up well until the RBA decision. CBA dropped 0.5%, NAB down 0.7% and the Big Bank Basket off to $185.60 (-0.5%). ASX fell hard on the latest volume numbers off 2.5%. MFG disappointed with FUM down 3.3%. Insurers were better, with QBE up 0.6% and IAG up 1.3%. MPL grinding higher by 1.7%. REITS fell led by GMG down 1.1%, SCG off 1.4% and VCX down 1.5%. Healthcare was mixed, CSL barely changed, RMD fell 2.3% as US listing slid on broker comments. Industrials relatively solid, TLS grinding higher again up 0.5%, BXB up 0.8% and WOW up 0.3%. Tech fell hard, WTC down 2.4% and XRO off 4.0%. Resources under pressure. BHP and RIO easing slightly but FMG off 1.6% and gold miners slammed NST down 2.0% and NCM off 2.3%. Lithium feeling depressed today AKE down 0.8%, LTR off 3.2% and AGY off 4.6%. Oil and gas stocks down with STO off 1.2% and KAR off 3.3%. In corporate news, SPT did a deal with Google. BGL raising $60m in a placement at 105c. On the economic front, it was the RBA and consumer confidence, 25bps as expected, but Lowe has raised his terminal rate forecast. This is the rate at which the economy becomes terminal. In Asia, HK down 1.1% and China slipping 0.2%. Tokyo better by 0.2%. 10-year yields up to 3.40%. Dow futures are up 40 points and NASDAQ futures are up 4 points.

HEADLINES

  • Winners: WBT, YAL, STX, TLG, GRR, A4N, SLX, CUV
  • Losers: INR, JRV, MSB, NVX, SBM, WAF, RMS
  • Positive sectors: Industrials.
  • Negative sectors: Banks. REITs. Resources. Healthcare.
  • High 7321 Low 7283
  • Big Bank Basket: Closed down at $185.60(0.5%)
  • All-Tech index: Down 1.7%
  • Gold steady at $2635
  • Bitcoin: Falls to US$17,041
  • Aussie Dollar: Eases to 67.24c
  • 10-Year Yield: Rises to 3.40%
  • Asian markets: HK down 1.1% and China slipping 0.2%. Tokyo better by 0.2%.
  • US Futures: Dow up 40 Nasdaq up 4 points. 

MAJOR MOVERS

  • TLG +4.3% graphite on the move
  • WBT +6.34% kicking higher again.
  • GRR +4.17% iron ore play.
  • CRN +2.56% WHC +2.72% coal back in favour.
  • SPT unchanged – Google expands agreement with SPT.
  • CCX +4.93% bouncing back on change in substantial holding from Citi.
  • ASN +2.33% update on exploration programs for REE and lithium.
  • WR1 +17.07% kicking higher again.
  • BET -7.94% giving it back again.
  • TMH -10.00% reinstatement to official quotation.
  • INR -10.48% rethink after AGM comments.
  • MSB -9.61% broker downgrade.
  • SBM -8.76% gold falls.
  • SIQ -5.14% media speculation wears off.
  • MAF -6.44% buy back update.
  • Speculative Stock of the Day: Ragusa Minerals (RAS) +6.90% initial drill results at Burracoppin with strategic rare earth mineralisation discovered. Ultra-bright kaolin identified. Sarytogan Graphite (SGA) +19.67% – announcement of a breakthrough of 99.87% graphite purity. The company has a project based in Central Kazakhstan.  Low-temperature alkaline roasting improved to 99.70% Total Graphitic Carbon (TGC).

IN THE NEWS

  • Bellevue Gold (BGL) -Bellevue Gold is raising up to A$70m (before costs) at 105c per share. $60m (placement) and ~$10 non-underwritten share purchase plan (before costs). The raise will allow Bellevue gold to de-risk by opening additional mining fronts and increasing financial flexibility ahead of the first production in 2HFY23.
  • APA Group (APA) – The AFR has reported that landowners along the proposed Western Slopes pipeline from the Santos (STO) Narrabi project have been notified that the plan will no longer be going ahead.
  • Magellan Financial Group (MFG) – Has reported FUM of $50.2bn compared to the previous month with FUM of $51bn. Magellan reported $2.5bn worth of net outflows. Their funds under management are down 57% in a year.
  • ASX Limited (ASX) – Will face increased regulatory supervision after the Company had failed to upgrade the CHESS system. ASIC chairman Joe Longo has asked the Government to provide regulators with increasedregulatorypowers to help the ASX improve pricing and governance. ASX has also released today a 6% decrease in activity for the month vs pcp.
  • ACCC releases Airline competition report. ACCC warns and will continue to monitor airlines over airfares. “Airfares have risen due to strong demand for travel and constrained supply as airlines have scaled back their schedules in response to high jet fuel costs and operational challenges – We accept that the airlines are still experiencing some pandemic-related resource challenges, but the ACCC will be monitoring them closely to ensure they return capacity to the market in a timely manner to start easing pressure on airfares” – ACCC Commissioner Anna Brakey.
  • Australia unexpectedly posted a current deficit for Q3 of (A$2.3bln) vs consensus A$6.0bln shifting downward from A$14.7bln surplus in the previous period. This is the first current account deficit since March 2019.

ECONOMIC NEWS

The Reserve Bank increased its cash rate by a quarter-percentage point to 3.1%, the highest level since November 2012, at its final meeting of 2022.

  • The Board expects to increase interest rates further over the period ahead, but it is not on a pre-set course. It is closely monitoring the global economy, household spending and wage and price-setting behaviour. The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.

ASIAN MARKETS

  • Japanese PM Kishida ordered defence spending of about 43 trillion yen (US$315bn) for the five-year period starting in April, Defence Minister Yasukazu Hamada said.
  • China announced that negative Covid tests will no longer be required to enter most public areas, malls or residential areas.
  • Foxconn said November revenue totalled 551.1bn new Taiwan dollars ($18.05bn), down more than 29% versus October and over 11% lower compared to Nov. 2021. The company struggled with a Covid outbreak and worker unrest at the world’s biggest iPhone factory in China.

US AND EUROPEAN HEADLINES

  • President Xi heads to Saudi Arabia
  • Venture capitalist Tim Draper previously predicted that bitcoin would top $250,000 by the end of 2022. Bitcoin would need to rally nearly 1,400% from its current price of around $17,000 for Draper’s prediction to come true. Dreamin’.
  • Nike terminates Kyrie Irving contract after anti-Semitism controversy.
  • Glencore to pay DR Congo $180mn to cover corruption claims.
  • Vale Kirstie Alley.

And finally…..

I got a Christmas card full of rice in the post today

I think it was from my Uncle Ben.

I was reading a magazine in the dentist’s waiting room this afternoon and I was surprised to find out that Ford have stopped production of the Cortina and are launching the Sierra.

There was another mate of mine….he showed me a bag of shallots, saying, “This one’s called Brian, this one’s Dave, here’s Alan, and the small one is called Steve.

I thought – this bloke really knows his onions.

Clarence

XXX

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