ASX 200 closed modestly, up 23 points to 7203 (0.3%) higher as banks rallied post the BEN results and Resources fell as UBS downgraded BHP and others. Cautious trade ahead of US CPI and FOMC. BHP sank 1.5% on the downgrade after a great run, RIO succumbed too with FMG off 4.2%. MIN collapsed 3.8% with lithium and base metal stocks also under pressure. LTR down 2.6%, NIC off 2.5% and SFR falling 4.1%. Gold miners eased with EVN down 1.4% and DEG off 1.2%. Energy stocks mixed, WDS up 0.1% but ORG regained some poise after the big fall yesterday. Banks were the standout today after BEN results cheered on NIM, the regional bank up % with CBA up 1.0% and NAB racing 2.0% ahead with the Big Bank Basket up to $184.99 (1.4%). Insurers also in demand, QBE doing well up 0.8% and SUN up 1.7% on the timetable for the SUN transaction. MQG managed a 0.8% gain. Industrials were firm across the board, TCL up 1.5%, ALL up 0.2% and TPG up 1.4%. Tech better following Nasdaq higher, WTC up 2.0% and XRO up 3.3%. The All–Tech Index rising 1.2%. In corporate news, MCR fell 4.4% after returning from a capital raise. CHN fell 8.1% on disappointment on the timing of the scoping study being pushed out. ZIP made a small capital call too falling %, BEN woke up the bank sector ahead of AGM with better NIM and rose 6.9%. On the economic front, consumer sentiment recovered a little and trade data out. China still our #1 trading partner. Asian market subdued, HK up 0.6%, China down 02% with Japan up 0.5%. 10-year yields tickling back up to 3.41%.

HEADLINES

• Winners: TYR, 29M, BEN, SLX, MP1, IDX, IMU, BCB
• Losers: ZIP, CHN, HCW, RNU, CTT, MYR, CIA, MCR, STX
• Positive sectors: Banks. Insurers, REITs. Industrials. Tech
• Negative sectors: Iron ore. Base metals. Gold miners. Lithium.
• High 7228 Low 7190 Narrow range.
• Big Bank Basket: Closed up at $184.99 up 1.4%
• All-Tech index: Up 1.2%
• Gold firms to $2641
• Bitcoin: Higher at US$17,151
• Aussie Dollar: Drifts to 67.43c
• 10-Year Yield: Firms to 3.41%
• Asian markets: HK up 0.6%, China down 0.2% with Japan up 0.5%.
• US Futures: Dow up 19 Nasdaq down 10

MAJOR MOVERS

• TYR +14.58% Potential for Potentia to go hostile.
• BEN +6.86% good results.
• 29M +7.33% nickel price rises.
• MP1 +5.95% ceasing to be a substantial shareholder.
• AVH +7.42% results of AGM.
• MAY +6.15% continuing to kick higher.
• EGH +14.47% company secretary resignation.
• ZIP -10.49% cap raise.
• CHN -8.06% scoping study results pushed back.
• MCR -4.42% cap raise.
• CIA -4.56% iron ore coming off the boil.
• FMG -4.21 % MIN -3.76% UBS downgrades.
• WBT -4.17% profit taking.
• Speculative Stock of the Day: Speculative Stock of the Day: Doctor Care Anywhere (DOC) +37.25% after signing a funding agreement with AXA Health UK. It can now borrow GBP10m in 3 tranches.

IN THE NEWS

• Zip Co Limited (ZIP) – Zip Co announces they have completed the reverse bookbuild for its liability management exercise on it’s $400m zero coupon senior convertible notes due 2028. $70m of the existing notes will now be converted into fully paid ordinary shares at a conversion price of $12.0576 per share. “We are pleased to confirm we have successfully retired $70m of out $400m convertible bond, at a very significant discount to face value. The transaction is highly accretive for Zip as out cash liability will be reduced by $76.6m by issuing only 27.8m shares, implying an effective conversion price of 276c per share” – COO Peter Gray.
• Bendigo & Adelaide Bank (BEN) has reported an increase in cash earnings by 22% year on year. BEN has also reported an increase in NIM, with the increases expected to continue into the new year as the RBA continues to raise interest rates. NIM post-revenue share arrangements were 1.85%, with an exit of 2.01%. They talk about NIM tailwinds continuing into the second half. Share price up 6% and has injected some, life into the rest of the banks as well.
• Star Entertainment Group (SGR) – ASIC has begun proceedings in the Federal Court against 11 of SGR’s current and former board members for allegedly not placing sufficient measures in place to prevent money laundering.
• CSL (CSL) – Appoints Dr Paul McKenzie as CEO after the previous CEO announced his retirement after 10 years in the role.
• G8 Education (GEM) – Has reported NPAT of $41m vs a year ago $43m. GEM has stated that there has been a recovery in occupancy rates since COVID, with occupancy rates more reflecting seasonal trends now. There has also been a “significantly improved” from the second quarter onwards.
• ASX (ASX) – Microsoft is buying a 4% stake in the London Stock Exchange (LSE) and the LSE is going to spend US$2.8 billion buying cloud computing services from Microsoft over 10 years. It is all part of stockmarkets moving to the cloud. The NASDAQ is doing the same thing with Amazon on Web Services.

ECONOMIC NEWS

• Consumer sentiment rose 3% to 80.3 in December, recovering from a 2-1/2-year low while pessimists easily outweighed optimists according to WBC survey. December’s improvement was largely driven by increasing amounts of speculation that the RBA should wind down its current rate hike cycle soon, as well as improving trends in tourism.
• Separate data from NAB. showed business confidence fell to -4 in November after holding above 0 since December 2021.

Average household debt grows by 7.3% according to the ABS.

International Trade Data showed China still our #1 trading partner.

Key statistics

• Australia’s balance on goods and services was a surplus of $147,931m in the 2021-22 financial year
• Total goods and services exports increased $135,024m (29%) to $593,798m
• Total goods and services imports increased $88,278m (25%) to $445,867m

The top 5 importing partners for Australia are:

   1. China, up $15,111m (17%) to $103,816m

   2. United States of America, up $6,347m (15%) to $49,601m

   3. Singapore, up $13,466m (110%) to $25,690m

   4. Germany, up $3,327m (19%) to $20,841m

   5. Korea, Republic of (South), up $8,966m (81%) to $19,980m

ASIAN MARKETS

• Hong Kong is scrapping some of its remaining Covid restrictions following China’s rapid shift away from the zero-tolerance approach.
• China hits back at US chip sanctions with WTO lawsuit.

US AND EUROPEAN HEADLINES

• US CPI tonight. 0.3% in November expected.
• Sam Bankman -Fried has been arrested in the Bahamas ahead of criminal charges in the US.
• ECB warns of higher loan losses and funding squeeze for eurozone banks
• Goldman Sachs aims to cut at least a few hundred more jobs as the Wall Street titan restructures its struggling consumer business and braces for an uncertain economy in the year ahead.
• Thomas Bravo continues tech deal spree with $8bn Coupa Software buyout.

And finally….

I went to a trivia quiz last night. One of the questions was, name three hits by Meatloaf. I got bat out of hell and dead ringer for love, but couldn’t think of a third. Oh well, two out of three ain’t bad.

Clarence

XXX