ASX 200 closed down 67 to 7267 (-0.9%) following a violent fall after the RBA surprised the market with another 25bps rate hike. All sectors are in negative territory today. Energy sector lost all of yesterday’s gains, down 1.5%, with WDS down 1.6%, STO down 1.1%, and BPT off 2.7%. Coal cooled with WHC down 2.3%, CRN down 1.2%, NHC down 2.0%, and YAL fell 0.5%. Gold is broadly down with the market, EVN down 0.9%, and NST down 1.4%. REITs worst performing sector today, falling 2.2%. GMG is down 1.4%, and MGR slipping 4.2%. Retailers weren’t popular either, with WES down 1.3%, DMP down 0.9%, and JBH down 1.3%. Banks down along with everything else. The Big Bank basket down 0.3% to $176.16. CBA down 0.3%, and NAB down 0.3%, should see a boost tomorrow after the market has digested rate news. Tech getting whacked too. The All-Tech index down 0.6%, and SQ2 down 1.5%. In corporate news, Macquarie Equities Conference kicked off with many companies presenting. WOW down 0.8% decreased despite reporting an 8% increase in sales in its third-quarter trading update, QAN slipped 3.0%, following the announcement that Vanessa Hudson will succeed Alan Joyce as CEO, HLS +1.7% sold its Montserrat facilities to Nexus Hospitals for $127m, and EDV -3.6% after reporting a 3.7% rise in sales in Q3 trading update. In economic news, RBA hiked rates by 25bps today taking the market by surprise triggering a market-wide sell-off, no sector safe. Asian markets mixed, Japan down 0.1% and HK up 0.3% with China closed. Bond yields soar, 2-year bond yield rose 23bps to 3.27%, and the 10-year rate up 11bps to 3.46%. Bitcoin down 1.54%. Dow Jones futures down 10 points and Nasdaq futures up 1 point.
- Winners: WBT, JDO, PNI, CWY, LKE, INR
- Losers: CPU, MGR, DTL, ABB, IMU, DEG, BGL
- Positive sectors: Food and Ag.
- Negative sectors: Everything else.
- High 7335 Low 7248 RBA surprises. Index tanks.
- Big Bank Basket Lower at $176.15 (0.3%)
- All-Tech index: Down 0.6%
- Gold eases to $2957
- Bitcoin: Slips to US$27985
- Aussie Dollar: Better to 67.06c. RBA sets cat amongst the pigeons.
- 10-Year Yield: Higher at 3.47%.
- Asian markets: Japan up 0.1%. China Golden Week HK up 0.6% HSBC results in focus.
- US Futures: Dow down 10 Nasdaq up 1
- WBT +13.86% have no idea!
- PNI +6.09% broker comments after FUM.
- JDO +6.77% ‘Atemi Waza’. Sell down creates opportunity.
- INR +5.08% bit of a lithium bounce.
- TYR +3.21% somebody bid already!
- CWY +5.79% Macquarie Conference Presentation.
- WGX +4.03% some gold interest.
- 4DX +21.47% going gangbusters as Penguins jump in.
- JRV +15.38% good volume buying.
- LRS +8.00% looking interesting.
- LTR +0.37% denies media speculation on another bid approach.
- GL1 +6.76% Macquarie favourite.
- CPU -4.79% Macquarie Conference Presentation.
- RF1 -2.87% Buy back and NTA yesterday.
- MGR -4.2% Macquarie Conference Presentation.
- BGL -3.62% Macquarie Conference Presentation.
- EDV -3.55% Q3 trading update.
- DEG -3.70% Macquarie Conference Presentation.
- WAF -2.60% Macquarie Conference Presentation.
- IHL -4.17% Incannex announces final results from Phase 1 trials.
- SGM -3.14% resource renewal
- Speculative Stock of the Day: Pinnacle Minerals (PIM) +50.00% ASX Please explain. Released a announcement today on the Disruptor drilling targeting REE’s scheduled in May.
- QANTAS (QAN) – Alan Joyce has announced his successor in the current CFO Vanessa Hudson a 28-year old QAN veteran. First female CEO of QAN. Handover is in November.
- Qualitas Ltd (QAL) reaffirms its FY23 guidance of net profit before tax between $30-33m and eps between 7.1 and 7.8 cps.
- MA Financial Group Ltd (MAF) announces it has acquired US credit asset manager Blue Elephant Capital Management and its affiliated entities for US$5m.
- Seven West Media Ltd (SWM) Provides trading update. Reports 3Q23 total TV market fell by 11%, expecting similar in 4Q. Expecting total TV share growth in 2H23, and identified $15-20m in temporary cost savings.
- IGO Ltd (IGO) – IGO subsidiary enters into a joint venture with Venus Metals Corporation Ltd regarding exploration, if warranted, development, and mineral extraction at the Henderson Nickel-Lithium Project.
- Helloworld Travel Ltd (HLO) announces it has agreed to acquire a 40% stake in Adelaide retail travel agency business, Phil Hoffman Travel.
- Endeavour Group (EDV) has reported a 3.7% increase in sales to $2.83bn in its third-quarter trading update, with its BWS division seeing an increase in transactions. The company’s My Dan’s membership program also surpassed 5m active members during the quarter.
- Wesfarmers (WES) – Exploring the potential for bolt-on acquisitions to support growth in its health unit, according to managing director Rob Scott. The company has made investments in Adelaide Tools, Beaumont Tiles, and the Catch marketplace.
- Woolworths (WOW) – Reported an 8% increase in sales to $16.34m in its Q3 trading update. CEO Brad Banducci noted that while customer spending is stable, shoppers are becoming more price-conscious, opting for more affordable options.
- Cleanaway Waste Management (CWY) – Expects underlying EBITDA for FY23, including GRL, to be approximately $670m. Depreciation and amortisation are expected to be around $370m, in line with guidance.
- Computershare (CPU) – Affirmed FY23 guidance, with management EPS expected to be up around 90% and earnings driving strong cash flows with over $2bn of balance sheet capacity. CPU plans to continue investing in technology and driving business improvement, as well as actively pursuing M&A opportunities.
- HMC Capital (HMC) – Announced strong AUM growth trajectory and scale existing cost base, with five scalable platforms underpinned by diversified capital sources. The company is on track to achieve a $10bn AUM target by year-end 2023 and reaffirms FY23 DPS guidance of 12cps to support a high return on equity growth strategy.
- Medibank Private (MPL) – Announced that any permanent net claims savings due to COVID-19 would be given back to customers through additional support in the future, and they expect to announce a further customer giveback before the end of June. They also expect resident policyholder growth of approximately 0.5%-0.75%, and FY23 non-resident gross profit expected to be double from FY22.
- Centuria Capital Group (CNI) – AUM of $21.2bn, including $13.9bn of unlisted real estate, $6.5bn of listed real estate and $0.8bn of investment bonds.
- Healius (HLS) – Sold its Montserrat facilities to Nexus Hospitals for $127m, with Healius continuing to provide pathology services across a number of existing Montserrat facilities.
- Dexus (DXS) – Confirmed guidance to deliver distributions of 51 to 51.5 cps for the 12 months through June. The company said its portfolio had demonstrated its resilience, with high occupancy levels maintained in its office and industrial portfolios in Q1, despite the challenging macroeconomic environment.
- Domino’s (DMP) – Australia CEO, David Burness, will be the company’s first global culture coach where he’ll focus on “franchisee capability and developing the next generation of pizza entrepreneurs.”
- The Takeovers Panel has applied for a court extension over its inquiry into HotCopper parent The Market Herald.
ECONOMICS & OTHER NEWS
RBA Meeting Click here for the full transcript.Governor Lowe (High) is speaking tonight in Perth at RBA board dinner.
- The RBA Board decided to increase the cash rate target by 25bps to 3.85%. It also increased the rate paid on Exchange Settlement balances by 25bps to 3.75%.
- While the recent data showed a welcome decline in inflation, the central forecast remains that it takes a couple of years before inflation returns to the top of the target range; inflation is expected to be 4½% in 2023 and 3% in mid-2025.
- Wages growth has picked up in response to the tight labour market and high inflation.
- A significant source of uncertainty continues to be the outlook for household consumption. The combination of higher interest rates, cost-of-living pressures and the earlier decline in housing prices is leading to a substantial slowing in household spending.
- Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe.
- HSBC announces $2bn share buyback as profits surge. First quarterly dividend since 2019. HSBC’s headline profit was boosted by a reversal of a $2bn impairment it took against the planned sale of its French business, reflecting the fact that the deal may no longer go through. It also flagged the first of a new cycle of buybacks of up to US$2bn. Up 3% in HK.
- The International Monetary Fund predicts Asia-Pacific’s gross domestic product to expand 4.6% in 2023, after growing 3.8% in 2022. The IMF downgraded its predictions for Japan, Australia, New Zealand, Singapore, and South Korea.
- It lowered Japan’s 2023 growth estimates to 1.3% to reflect “weaker external demand and investment and carryover from disappointing growth in the last quarter of 2022.”
- Hong Kong’s economy expanded 2.7% in the first quarter from a year earlier. Hong Kong’s retail sales grew at the fastest pace in more than a decade in February as spending surged during the Lunar New Year break and tourists from mainland China and elsewhere returned to the city.
- China still closed for Golden Week.
US AND EUROPEAN HEADLINES
- European markets back from May Day holidays.
- BP results – Q1 Net Income US$8.2bn. Net Debt US$21.2bn. US$1.75bn share buy back.
- US government risks running out of cash as soon as June 1, Yellen warns.
- Morgan Stanley plans to cut another 3,000 jobs.
- Hollywood strike looms amid tense talks between writers and studios.
My half brother and I aren’t allowed to play
with chainsaws any more.
I remember being so poor that all we had to eat was coal.
Thinking of those times still brings a lump to my throat.