ASX 200 rose 34 points to 7145 (0.5%) as resources rallied hard on better Chinese numbers and debt ceiling relief. AUD back in demand. For the week, the ASX 200 is down 9 points. Iron ore miners going hard. BHP up 2.8% and RIO up 2.5%, with FMG up only 1.7%. Lithium stocks are also in demand, led by PLS up 3.0% and IGO up 2.5%. Base metals better, S32 rallying 1.8% and gold miners also flying high, NCM up 4.6%. Oil and gas better ahead of the OPEC+ meeting this weekend.  WDS up 1.1%, and STO rose 1.4%. Coal a little merrier too, with WHC up 1.4%. Banks left behind with the Big Bank Basket down to $166.01 (0.1%) with NAB the worst hit down 1.0%. MQG slightly higher up 0.3% and insurers unchanged, and money managers slightly better. REITS firmed as GMG rose 0.4% and Industrials a little soft on wage rises, COL down 1.7% and WOW off 1.4%. Healthcare mixed, CSL off 0.7% and RMD up 1.0%. Tech doing well, APX a standout up 15.0% with WTC up 1.5% and the All Tech Index up 0.6%. In corporate news, a slow day. New CFO for FMG and BUB in trouble, ADH cratered on business update down 15%. On the economic front, lending numbers are down. Asian markets running hot following US deal. HK powering ahead by 3.9%. Dow Jones futures up 58 points and Nasdaq futures up 24 points.

HEADLINES

  • Winners: PDN, SYR, IEL, SLX, A4N, RSG
  • Losers: TLX, MAD, NEU, JDO, LOV, RPL
  • Positive sectors: Resources. Oil and gas. Tech. REITs.
  • Negative sectors: Banks. Industrials.
  • High 7166 Low 7126 ASX 200 down 9 points for the week.
  • Big Bank Basket: Drifts to $166.01(0.1%)
  • All-Tech index: Up 0.7%
  • Gold Lower at $2995
  • Bitcoin:  Rises to US$27162
  • Aussie Dollar: On a roll to 66.15c. RBA beckons.
  • 10-Year Yield: Steady at 3.64%.
  • Asian markets: Japan up 1.6%, HK up 3.9% and China up 0.8% on debt ceiling relief.
  • US Futures: Dow up 58 Nasdaq up 24.

MAJOR MOVERS

  • PDN +10.7% Namibian issue over.
  • SYR +7.1% movement at the station.
  • RED +6.7% gold rise.
  • SLX +6.4% chip focus.
  • APX +15.0% go you good thing.
  • 5EA +13.1% change of director’s interest.
  • VIT +15.9% Bottoming. Cannabis stock.
  • AMI +7.1% recovering after cap raise.
  • CGS +10.0% buyback continues.
  • HAS +9.9% change of director’s interest.
  • IEL +6.3% Friday bargain hunters.
  • TLX -7.2% change in directors’ interest.
  • NEU -4.4% no AI here.
  • Speculative Stock of the Day: Betmakers (BET) +24.1%. Picking up steam following the restructure after a strategic review.

COMPANY NEWS

  • Coles Group (COL) – Announced it would make an additional $25m provision in relation to underpayment of salaried managers.
  • RIO Tinto Ltd (RIO) – Plans to invest $395m in a seawater desalination plant in WA’s Pilbara region. Construction is expected to start in 2024, creating 300 jobs, and the plant should be operational by 2026.
  • Bubs Australia Ltd (BUB) – Reports YTD China revenue down 57% on pcp. Q3 Australia’s new revenue of $4.26m was up 41% on pcp and other international net revenue, excluding the US of $922k up 67% on pcp.
  • Firefinch Ltd (FFX) – Announced it has received initial proposals and is engaged in active discussions, but a binding agreement is unlikely, they plan to return cash to shareholders and potentially delist from ASX.
  • Fortescue Metals Group Ltd (FMG) – Appoints Christine Morris as CFO effective July 23.
  • Adairs Ltd (ADH) – Issued 2H23 trading update. Downgrades guidance to $616-622m from $625-665m and EBIT to $62-65m from $70-80m.
  • Magnis Energy Technologies Ltd (MNS) – Announced it has completed 6 out of 7 tests required for UN38.3 certification for its lithium-ion cells, with 1 result pending. The cells are currently undergoing the final test, which will be concluded after a 7-day observation period.
  • Kelsian Group Ltd (KLS) – Completed previously announced acquisition of All Aboard America! Holdings for EV of $487m.
  • Silk Laser Australia Ltd (SLA) – Has granted due diligence to EC healthcare. Board unanimously intends to recommend offer.
  • European Lithium Ltd (EUR) – Announced it expected final SEC approval for Critical Metals Corp this month.FSA Group Ltd (FSA) – Downgrades guidance. Earnings down 15-20% compared to FY22, and full-year dividend to be 7-8cp
  • Mineral Resources (MIN) has completed its takeover of Norwest Energy.

ECONOMIC & OTHER HEADLINES

  • Prices of lithium carbonate at a 99.5% battery grade reached 300,500 yuan ($US42,344), extending gains from 180,000 yuan touched in early May.
  • Australia raises the national minimum wage by 5.75% from July 1st. UBS said higher labour costs will hurt Australian retailers after the Fair Works Commission’s increase to minimum wages by 5.75% will add pressure to the sector’s margins.

Lending

Key statistics

In April 2023, new loan commitments (seasonally adjusted):

  • fell 2.9% for housing.
  • rose 1.5% for personal fixed term loans.
  • rose 44.0% for business construction (a typically volatile series) and rose 2.0% in trend terms.
  • rose 9.8% for business purchase of property (a typically volatile series) and rose 0.3% in trend terms.

Housing finance

In April 2023 in seasonally adjusted terms, the value of new loan commitments:

  • for total housing fell 2.9% to $23.3b, after a rise of 5.3% in March. It was 25.8% lower compared to a year ago.
  • for owner-occupier housing fell 3.8% to $15.4b and was 24.3% lower compared to a year ago.
  • for investor housing fell 0.9% to $7.9b and was 28.6% lower compared to a year ago.
  • ANZ raises cash rate forecast to 4.35%, possible rate increase next week. Previous forecast was 4.1%. RBA cash rate is 3.85%. ANZ sees 4.1% insufficient for target inflation. Expects RBA move in August, potential rate hike in June or July.
  • Ben Roberts-Smith has resigned from his role as Seven West Media’s deputy general manager of Seven Queensland.
  • Economists at Citi say there is a risk the cash rate could go as high as 4.6% due to the large increase in the minimum wage and persistently high inflation.

ASIAN MARKETS

  • Nikkei has eighth weekly gain.
  • Japan’s liquefied natural gas imports last month fell to the lowest in more than 20 years. Deliveries declined to around 4m tons in May, about a 30% drop on the same month a year ago and the least since 2002.
  • For a third-straight month, Li Auto’s deliveries in China topped 20,000 with a climb to 28,277 vehicles in May. That’s up by about 146% from a year ago.

US AND EUROPEAN HEADLINES

  • US Senate passes bill to end debt ceiling stand-off and avoid default. Biden now to sign the Fiscal Responsibility Act.Ironic title really.
  • Jobs number tonight. 190,000 is the magic number. 3.5% headline unemployment rate.
  • Brussels urges UK to join trade pact to ease risk of post-Brexit car tariffs.
  • Saudi Arabia expands lithium processing to supply BMW.
  • Meta unveils new virtual reality device ahead of Apple headset launch.

And finally….

Clarence

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