ASX 200 put in a good day up 48 points to 7251(0.7%). After a spluttering start, firm US futures ahead of FOMC, turned thing around with resources finding their feet. BHP up 0.5%, RIO up 0.5% and FMG up 1.1% leading things higher. Lithium stocks found their level for now and base metal stocks also in demand, IGO up 0.5% and SFR running 3.4%. 29M doing well up 6.0% too with gold miners especially firm as GMD rose 12.6% on the SBM merger and the later up 13.9%. Energy stocks also doing well, WDS up 1.5% and STO up 0.9%. Coal stocks better, WHC up 2.4%. Industrials were also firm with CSL up 0.8%, TLS rose 1.2% as TPG ran into cyber trouble falling 2.8%. ORG continued to rally 2.9% with REITs also in demand, CHC up 1.0% and GMG rallying 1.6%. Tech stocks slightly better, XRO up 3.0% and the Index up 1.3%. Banks were the one sector overlooked. Some downgrades for BEN hurt a little with NAB down 0.30% and BEN off 3.3%. The Big Bank Basket up to $185.21 (0.05%). Insurers eased and money managers pushed a little higher. In corporate news, GMD and SBM back after merger and cap raise. WOW sold down some EDV with the drinks company off 4.3%. In economic news, some jobs data showed the tightness of the labour market still. Asian markets were better as China is opening up at breakneck speed. Japan’s Tankan survey out with markets slightly positive. 10-year yields falling to 3.34%

HEADLINES

• Winners: ARU, SBM, WBT, SQ2, GEM, MAD, AGY
• Losers: JRV, IMU, EDV, RNU, BEN, SGF, IDX
• Positive sectors: REITS. Industrials. Oil and gas. Coal. Base metals.
• Negative sectors: Insurers. Telcos.
• High 7254 Low 7206
• Big Bank Basket: Closed up at $185.21 up slightly.
• All-Tech index: Up 1.3%
• Gold firms to $2650
• Bitcoin: Higher at US$17,815
• Aussie Dollar: Higher to 68.24c
• 10-Year Yield: Eases to 3.34%
• Asian markets: HK up 0.8%, China up 0.2% with Japan up 0.8%.
• US Futures: Dow up 112 Nasdaq up 43

MAJOR MOVERS

• ARU +17.98% Gina nabs 10%
• SBM +13.85% in the beginning was the word. GMD merger cheers.
• SQ2 +8.15% US move
• AGY +6.78% lithium back in favour.
• CHN +6.41% Stare Street buying in.
• GEM +7.32% buyback update.
• 29M +6.02% finding friends.
• GMD +12.55% off to the races on merger.
• LLL +6.52% investor presentation. High grade drilling results.
• TLG +3.69% silicon anode demand driving progress.
• A11 +6.67% Ghana is back baby.
• MAY -13.04% profit taking.
• RXM -10.64% Hillside Mineral resource reserve.
• JRV -9.52% broker downgrades.
• EDV -4.33% WOW sells down.
• TYR -1.1% so much for the Buy signal.
• BEN -3.31% broker downgrades.
• TPG -2.76% cyberattack on some business accounts.
• Speculative Stock of the Day: Pursuit Minerals (PUR) up 58.33% as it announced the acquisition of a lithium brine project in Argentina. 100% of Trilogy Minerals PUR has a market cap of around $40m now. The deal has added significant value at a fraction of that in costs. The company is also undertaking a small capital raise and options issued to Trilogy.

IN THE NEWS

• Orica Limited (ORI) – Orica Limited held its AGM today. The positive momentum from the second half of the 2022 financial year has continued within the first two months of the 2023 FY delivering strong results. Statutory net profit after tax (NPAT) in FY2022 was $60m, including a $257m significant items expense after tax. Orica expects the momentum to continue through the financial year.
• Westpac Bank (WBC) – AGM – The CEO said the group is “well placed to support customers through what will be a tougher period.” Westpac chairman John McFarlane has also advised that he will retire following the AGM in December 2023 (long way off yet). WBC said in its outlook statement it “expects the combination of rising interest rates and the increase in cost of living to be felt more fully by consumers and businesses after Christmas.” There was no specific guidance, pretty wishy-washy.
• Woolworths Group (WOW) – WOW sold a $636m stake in Endeavor Group (EDV) at $6.46 per share Tuesday night through UBS. This comes after WOW was reported to be looking into the purchase of PETstock, understood by the AFR to be purchasing a 50% stake in the company for $600m. WOW has since confirmed they maintain a 9.1% stake in EDV that they intend to sell in the short to medium term.
• Ramsay Health Care (RHC) – The Australian has heard from sources that KKR may look again at a takeover bid for RHC in the new year after RHC has divested certain real estate assets.
• Santos (STO) has entered into a supply agreement with Strike Energy (STX), with Santos to purchase a total of 36.5 petajoules of gas from STX for the next five years.
• David Jones sale imminent. Price tag around $120-130m which is a long way from the $2.1bn it paid in 2014.
• JPMorgan has become the latest broker to downgrade the major miners following their share price rally fuelled by China’s reopening. The broker said S32 has been a laggard and upgraded it to “overweight”. The stock is JPMorgan’s preferred base metal play over SFR and OZL.
• TPG Telecom (TPG) – cyber security adviser, Mandiant, discovered evidence of unauthorised access to the hosted exchange service which houses up to 15,000 iiNet and Westnet business customer e-mail accounts.

ECONOMIC NEWS

• Around one in every thirty jobs (3.2%) were vacant in the September quarter, a new record high, according to figures released today by the Australian Bureau of Statistics (ABS).

Total jobs increased 0.3% to 15.4m. Filled jobs increased 0.2% to 14.9m. Secondary jobs decreased 0.2% to 997,200.

• New Zealand forecasts 2023 recession as rates rise. GDP will contract for three quarters starting from the second, the Treasury Department said in its Half-Year Economic report.

• The RBNZ last month projected four straight quarters of contraction beginning in the second quarter, and said it may raise the Official Cash Rate as high as 5.5% from 4.25% currently to regain control of inflation.

ASIAN MARKETS

• The Bank of Japan’s Tankan Large Manufacturers Index read 7 in the three months to December, slightly better than expectations for a reading of 6 but below last quarter’s reading of 8. The big non-manufacturers’ confidence index likely extended growth to 17, the highest since late 2019, from 14, as face-to-face service operators cheered Japan’s economic reopening from the pandemic, according to the survey.
• China will stop releasing comprehensive data on new Covid cases after the dropping of mandatory testing meant the numbers no longer reflected reality.
• November saw a surge in Covid cases and strict rules including lockdowns in several cities to bring infections under control.

US AND EUROPEAN HEADLINES

• Big night tonight. 50bps is the likely outcome from the Fed. Dot Plots in focus.
• Binance the world’s largest crypto exchange, sought to counter concerns about outflows by reiterating its position that user assets are underpinned by reserves while also flagging an absence of debt.
• Sam Bankman – Fried charged with one of the biggest frauds in US history.
• Berkshire Hathaway sells 1.33m BYD shares.
• Jack Dorsey admits he made mistakes at Twitter. Says the site still has issues. No kidding.

And finally…..

Clarence

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