ASX 200 rallied back 58 points to 7409 (0.8%) after the drubbing yesterday. Bank steadied on NAB Q1 results, with NAB up 0.7% and ANZ up 0.6%. CBA copped some downgrades falling another 1.5% with the Big Bank Basket falling to $179.69 (0.7%) MQG ran 1.7% with MFG also doing well on results up 6.4%, Insurers better too, QBE up 1.0% and SUN rallying 1.6%. Industrials were firm, WES kicked hard up 4.0%, Staples better, WOW up 1.4% and COL up 1.0%. TLS firmed up 1.9% on mobile dominance and dividend rise. Platform stocks in demand, REA up 4.9% and CAR better by 2.2%. Tech doing well with WTC up 3.2% and XRO up 4.1%. The AllTech Index up 2.8%. REITs better led by GMG up 2.1%. Builders are back as JHX rose 4.8% and BLD up 2.9%. In the resource space somewhat more muted with BHP up 0.4% and RIO better, FMG outperforming up 1.5%. Gold miners hit another air pocket dropping hard. NCM knocked back Newmont falling 1.7% and results not helping, NST off 3.0% and EVN falling 2.0% on its results. Second tier lithium bounced a little and oil and gas slipped despite crude gains in Asia. Coal stocks mixed, WHC reported with a disappointing dividend, falling 2.8%. In corporate news, Super Thursday came and went. AMP back to SOP with its first dividend in five years but core business remains challenged falling 13.4%. MFG roused the animal spirits and rose 6.4% on its numbers. TLS raised the dividend under the new CEO, Vicki Brady. BAP bounced 5.2% on DIY car repair surge, PRN fell 9.5% on a Dugald mine incident update. SHL went supersonic rising 14.3% on its results, ORA jumped 14.8% on numbers. On the economic front, unemployment rose to 3.7% as signs emerge that Phil Lowe’s cunning strategy is working. In Asia, markets pushed higher with Japan up 0.6%, HK up 2.3% and China rallying 0.8% as ‘balloongate’ tensions ease. 10-year yields steady at 3.76%. Dow futures up 19 points and Nasdaq futures up 48 points.

HEADLINES

  • Winners:  ORA, SHL, RIC, CTD, SQ2, BRN, MP1, CDA
  • Losers:  AMP, PRN, RED, NWH, AGG, BOE, GQG, DYL
  • Positive sectors:  Industrials. Tech. Staples. Builders. REITS
  • Negative sectors: Oil and gas. Gold miners. Base metals. Banks.
  • High 7422 Low 7351 Unemployment rises to 3.7%
  • Big Bank Basket: Down to $179.69 down 0.7%
  • All-Tech index: Up 2.8%
  • Gold up to $2660
  • Bitcoin: Rallying hard US$24714
  • Aussie Dollar: Falls to 69.15c
  • 10-Year Yield: Steady around 3.76% despite jobs number.
  • Asian markets: Higher with Japan up 0.6%, HK up 2.3% and China rallying 0.8%.
  • US Futures: Dow up 18 Nasdaq up 48

MAJOR MOVERS

  • ORA +14.83% results please
  • SHL +14.25% rallying hard on numbers.
  • BRN +8.82% back from the sell off yesterday.
  • CTD +9.97% not such a dog after all.
  • MFG +6.35% brokers starting to see light at the end of the tunnel.
  • MP1 +8.78% tech optimism helping.
  • SDR +6.02% low volumes.
  • BAP +5.15% results cheer.
  • CDA +7.60% rally detected.
  • GUD +7.49% broker upgrades.
  • MEI +8.33% zooming head again.
  • APX+9.85% DUB+11.11% FZO +10.00% tech bounce.
  • ZIP+8.11% enjoying a BNPL bounce.
  • EGG -22.56% scrambled on results.
  • AMP -13.36% pays first div in five years.
  • PRN -9.54% incident at Dugald River.
  • NWH -5.41% results in line with guidance.
  • NHC -3.66% WHC -2.81% coal results disappoint.
  • EVN -1.98% no shine for Klein.
  • ORG -3.23% misses forecasts. Bidders still engaged.
  • SPECULATIVE STOCK OF THE DAY – Matsa Resources (MAT) +27.03% on good volume. Strong gold intercepts at Fortitude North on the Lake Carey Project. 14m @2.87g/t AU.
  • Above Average Volumes: FNX, DNA

COMPANY NEWS

  • AMP Ltd (AMP) reported results. Underlying NPAT $184m, down 34% from the previous fiscal year, largely driven by lower earnings from AMP Bank, lower wealth management earnings, and lower New Zealand Wealth Management earnings. AMP’s statutory NPAT profit was $387m, including gains from the sale of the Infrastructure Debt platform, partially offset by costs associated with separation, impairments, transformation, and remediation.The company is paying its first dividend in five years of 2.5c, 20% franked. Core profits continue to disappoint though.
  • ASX Limited (ASX) reported a resilient financial performance for the first half of 2023, with operating revenue of $499.5m, down 0.4% from the previous period, and a statutory profit of $73.7m. The underlying NPAT was $250m, down 0.1%, and the Group declared an interim dividend payment of 116.2c, reflecting a payout ratio of 90% of underlying NPAT. The ASX has a near monopoly in the Australian equity market that generates initial and annual listing fees from companies on its exchange generating ~20% of its revenue, additionally they have a strong economic moat underpinned by network affects and regulations.
  • Domain Holdings Australia (DHG) Revenue up 6% after excluding significant items to $186.6m, while expenses amounted to $137.3m and EBITDA was $49.3m. Net profit of was $15.9m, and its eps is 2.52c, showing a YoY decline of 44%. The company said, the “unprecedented listings reduction” outpaced the drop during the COVID lockdowns and the banking royal commission. The company said that January saw a strong performance of buyer activity on the web site. ‘Buyers are out there – auction clearance rates are still fairly strong’ according to the company.
  • Newcrest Mining Ltd (NCM) reported 1H23 results, with a statutory profit and underlying profit of $293m, AISC of $1,089/oz, and cash flow from operating activities of $429m. The company is on track to deliver its FY23 guidance, has advanced its global pipeline of gold and copper growth options, and increased shareholder returns, while maintaining a strong balance sheet. The company has also rejected the Newmont bid. “The board has considered the indicative proposal and has unanimously determined to reject the offer as it does not represent sufficient value for Newcrest shareholders,” said Newcrest in a statement but will give it access to confidential information in the hope it flushes out a higher offer.
  • Goodman Group (GMG) 1H23 results showed a significant increase in operating profit and operating eps from the previous year up 10.7%, with a strong capital position and almost fully leased portfolio. The Group expects 13.5% full-year OEPS growth, with additional highlights including a statutory profit of $1.1bn, gearing at 9.7%, available liquidity of $2.8bn, and NTA per security of $8.87, up 6% from June 2022.
  • Origin Energy Ltd (ORG) Origin’s profit fell to $44m from $268 from pcp, due to lower Energy Markets gross profit and higher tax expenses, but higher Integrated Gas earnings partly offset the decline. APLNG had strong cash flow despite challenging conditions, and Origin’s full-year earnings guidance improved. Energy Markets suffered from unprecedented market conditions, which caused under-recovery of higher wholesale energy costs in customer tariffs. Origin’s natural gas gross profit up $145m, and its retail business performed well, while continuing to invest in renewable and cleaner energy and customer solutions.
  • National Australia Bank (NAB) – 1Q Trading update. Statutory net profit of $2.05bn with cash earnings of $2.15bn. 18.7% earnings growth. Not a dividend announcement. Results in May. 11.3% CET1 Ratio. The important NIM rose 12bps to 1.79%, below CBA’s NIM. NAB said its credit impairment charges increased 23% (compared to the quarterly average in the second half) to $158m. According to the CEO, maintaining cost discipline and managing NAB safely would help to deliver “sustainable growth and improved shareholder returns”. The result seems to have been taken better than the CBA result but the reaction was muddied yesterday by the fall in the whole sector. NAB remains in second place in terms of quality and outlook.
  • Evolution Mining (EVN) – reported an 11% increase in statutory net profit to $101m. Interim dividend of 2c. EBITDA up 13% to $446m. Leading the sector with EBITDA margin of 39%. The company says it remains on track to deliver Group FY23 production and cost guidance with a skew to the second half, (never great). Hard to tell if the market is disappointed with the results given the general weakness in the sector on bullion falls.Nothing to get excited about here one way or another. Gold price remains the driver.
  • Incitec Pivot Ltd (IPL) held their AGM today. IPL saw significant increases in financial performance, with a 162% rise in EBIT, NPAT up 186%, and strong EBIT results from Dyno Nobel Americas and Asia Pacific, leading to a record final dividend of 17cps and the board announced an on-market buyback of up to $400m.
  • AUB Group Limited (AUB) provides a trading update and upgrade to full-year guidance. AUB Group’s underlying NPAT for 1H23 exceeded mid-point guidance by 8.5% ($46.7m), and they upgraded their full year guidance to include growth of 52.5% to 64.0% versus FY22, driven by strong trading performance and strategic growth initiatives.

ECONOMIC & OTHER NEWS

The Australian economy lost 11,495 jobs in January, missing economist expectations for 20,000 jobs added. The market is taking this as a positive as maybe rate rises are working and so more agressive moves are not quite so necessary.

In seasonally adjusted terms, in January 2023:

  • unemployment rate increased to 3.7%.
  • participation rate decreased to 66.5%.
  • employment decreased to 13,721,900.
  • employment to population ratio decreased to 64.0%.
  • underemployment rate remained at 6.1%.
  • monthly hours worked decreased to 1,836 million.
  • full-time employment decreased by 43,300 to 9,567,800 people.
  • part-time employment increased by 31,800 to 4,154,100 people.

ASIAN MARKETS

  • Standard Chartered misses estimates but announces US$1bn buy back. Shares rise.
  • Chinese air passengers in January up 34% YoY.
  • Japan’s exports is up 3.5% YoY to JPY 6,551.2bn in January beating market consensus of 0.8% the softest pace since February 2021.

US AND EUROPEAN HEADLINES

  • The World Bank President is set to leave early after pressure on tackling climate change.
  • Nicola Sturgeon steps down from SNP leadership. Searching for the next leader who has a fish name.
  • KPMG is first Big Four firm to cut staff in US as economy slows.
  • US government risks defaulting on debt as soon as July, agency warns.
  • Tesla to open up US charging network to other electric vehicles.
  • Charlie Munger says that BYD is so ‘far ahead of Tesla in China it is almost ridiculous’.
  • Biden planning to talk balloons. Nena was a singer ahead of her time.
  • “One of the biggest risks to the future of civilization is AI,” Elon Musk told attendees at the World Government Summit in Dubai. He should know he co-founded the company.
  • Vale Raquel Welch.

And finally…..

IF ONLY THEY HAD JEWISH MOTHER

MONA LISA’S JEWISH MOTHER:

“After all the money your father and I spent on braces, this you call a smile?”

CHRISTOPHER COLUMBUS’ JEWISH MOTHER:

“I don’t care what you’ve discovered, you didn’t call, you didn’t write.”

MICHELANGELO’S JEWISH MOTHER:

“A ceiling you paint? Not good enough for you the walls, like the other children?

Do you know how hard it is to get that schmutz off the ceiling?”

NAPOLEON’S JEWISH MOTHER:

“You’re not hiding your report card? Show me!

Take your hand out of your jacket and show me!”

ABRAHAM LINCOLN’S JEWISH MOTHER:

“Again with that hat! Why can’t you wear a baseball cap like the other kids?”

THOMAS EDISON’S JEWISH MOTHER:

“Okay, so I’m proud that you invented the electric light bulb.

Now turn it off already and go to sleep!”

PAUL REVERE’S JEWISH MOTHER:

“I don’t care where you think you have to go, young man,

midnight is long past your bedtime!”

ALBERT EINSTEIN’S JEWISH MOTHER:

“Your senior photograph and you couldn’t have done something with your hair?”

MOSES’ JEWISH MOTHER:

“Desert, schmesert! Where have you really been for the last forty years?”

BILL GATES’ JEWISH MOTHER:

“It would have killed you to become a doctor?”

BILL CLINTON’S JEWISH MOTHER:

“Well, at least she was a nice Jewish girl, that Monica.

Clarence

XXX

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