ASX 200 closed up 23 to 7162 (+0.3%) buoyed by positive sentiment following softer-than-expected US CPI numbers. Banks rose, riding positive market sentiment. The Big Bank Basket up to $166.36 (+0.8%) led by MQG up 1.4%, and WBC up 1.3%. Money managers doing well. Insurers also had a good day, IAG up 2.6% and QBE rose 0.9%. REITs lower as bond yields climbed, SCG down 1.2% and MGR down 2.2%. The Healthcare sector got slammed as CSL reduced profit guidance, CSL dropping 6.9% knocking 35 points off the market. Resources regained yesterday’s losses and then some as China lowered their short-term lending rate in a bid to stimulate the economy, boosting commodity prices. Iron ore miners performed well, BHP up 3.6%, RIO up 2.9% and FMG up 4.3%. Lithium boosted on Chinese optimism, MIN up 5% and PLS up 3%. Gold miners were sold off for a second day now that markets are convinced the Fed will ‘skip’ June’s rate hike. EVN -0.6% and NST -0.9%. Oil and gas rose as the US announced overnight, they would be purchasing an additional 12m barrels to replenish depleted national reserves. WDS +1.1% and STO +1%. In corporate news, CSL fell 6.9% after it reduced FY23 profit guidance, noting a significant hit from FX exposure. MAQ rose 1.1% after completing a $160m institution share placement at $58.50 per share. AIA dropped 3.8% after adjusting their dividend policy to be in line with industry standards. DMP continued to drop as brokers downgraded their ratings, down 0.9%. On the economic front today, Consumer confidence fell to a 3-year low, as inflation and interest rates hit home. Asian markets mixed ahead of the Fed rate decision, Japan’s Nikkei Index rallied 0.9% by midday, currently up 1.3% looking to extend its gains for a fourth session. HK down 0.6% with China down 0.1%. Australian bond yields remain inverted, 10Y yield at 3.99% and 2Y yield at 4.1%. USD Index flat at $103.4. Dow Jones futures down 74 points and Nasdaq futures down 6 points.

HIGHLIGHTS

  • Winners: EMR, LLL, PMT, MIN. AKE, KAR, PTM, PLS
  • Losers: SLX, CSL, SMR, PDN, BGL, CUV, DYL
  • Positive sectors: Iron ore. Lithium. Banks. Insurers. Oil and gas. Consumer.
  • Negative sectors: Healthcare. Tech. Gold miners.
  • High 7168 Low 7136. Narrow range. CSL accounts for 34 plus points.
  • Big Bank Basket: Higher at $166.36(0.8%)
  • All-Tech index: Falls 0.9%
  • Gold falls to $2875
  • Bitcoin:  Falls to US$26037
  • Aussie Dollar: Steady at 67.69c.
  • 10-Year Yield: Kicks to 3.99%.
  • Asian markets: Japan up 1.3%, China down 0.1% and HK down 0.6%
  • US Futures: Dow down 74 Nasdaq up 6
  • European markets set to start slightly lower.

MAJOR MOVERS

  • EMR +11.9% commodity bounce.
  • LLL +6.7% lithium back in favour.
  • MIN +5.0% Iron ore bounce.
  • PMT +5.3% new director.
  • KAR +4.5% oil recovery.
  • VUL +4.4% lithium back in favour.
  • IGO +3.0% Cosmos electrification study awarded to PRN and ABB.
  • MGX +23.1% Koolan Island shipments increase.
  • AKE +4.6% lithium up.
  • PAN -10.1% nickel project update.
  • SLX -7.2% crashes and burns.
  • CSL -6.9% rare downgrade. Plasma collection margins falling.
  • PDN -5.3% uranium sell-off.
  • APX -9.9% sell-off continues after recent run.
  • CEL -% Initial MRE of 4.5Moz in Ecuador.
  • TIG -12.5% coal stocks on the nose
  • Speculative Stock of the Day: Golden Mile Resources (G88) +133.33% – Highest ever grades at Quicksilver including 28m at 2.34% Ni and 0.109% Co from 32m.

COMPANY NEWS

  • Auckland Airport (AIA) – Adjusted its dividend policy to pay out 70% to 90% of net profit, with the possibility of deviating from this range under certain circumstances.
  • CSL Limited (CSL) – Revised its FY23 profit forecast downward, citing foreign currency damage, with an estimated impact of $230m to $250m. However, the company expects a 13% to 18% profit growth in FY24, reaching $2.9bn to $3bn, excluding FX effects.
  • IPD Group (IPG) – Anticipates an increase in earnings for FY23, with an estimated range of $27.1m to $27.6m in EBITDA, surpassing the previous year.
  • Macquarie Technology Group (MAQ) – Raised $160m through institutional share placement at $58.50 per share.
  • National Storage REIT (NSR) – Executed a $400m syndicated term loan, received credit approvals for an additional $200m in debt facilities, and increased its hedge profile. NSR reaffirms its FY23 underlying earnings guidance at 11.5cps.
  • Global Lithium Resources (GL1) – Begun exploration activities at its Marble Bar Lithium Project in Western Australia. Up to 20,000m of drilling will focus on expanding the lithium resource.
  • Mount Gibson Iron Ltd (MGX) – Reported a steady increase in high-grade iron ore shipments from its Koolan Island operation. The company is on track to meet or exceed its shipping guidance for the 2022/23 financial year.
  • Select Harvests Ltd (SHV) – Reported 65% of crop sold and provided 2024 crop outlook at conference presentation.
  • Cobram Estate Olives (CBO) – Completed around 60% of the harvest in its Australian groves, expecting a production of 12.6m to 13.2m liters of olive oil, which is 20-25% below initial forecasts due to colder weather and smaller fruit size. Californian groves anticipate a good harvest in November.
  • Delta Lithium (DLI) – Idemitsu Australia has invested approximately $46.4m in DLI. This strategic placement increases Idemitsu’s shareholding to 15% and allows for a strategic cooperation agreement to leverage capabilities.
  • Winton Land Ltd (WTN) – Reaffirms FY23 guidance and expects FY23 net profit after tax towards the lower end of our guidance of between $72.4-$82.4m.
  • Panoramic Resources Ltd (PAN) – A crack was discovered in the filter press pressure plate at the Savannah Nickel Project in WA,  and although repair works were undertaken, a new crack emerged during recommissioning. Ore processing and concentrate production have been suspended.

ECONOMIC & OTHER HEADLINES

  • Consumer confidence for June fell to a three-year low, the ANZ-Roy Morgan weekly survey showed today. Consumer confidence dropped to its lowest since April 2020 and was among the four weakest results since the COVID-19 pandemic, the survey showed.

ASIAN MARKETS

  • Barclays expects the People’s Bank of China to also reduce the reserve requirement ratio for banks by 25bps each in the third quarter of this year and first three months of next year to boost credit expansion.
  • Japanese Prime Minister Fumio Kishida is considering calling an early election if the opposition submits a no-confidence motion to parliament Friday.
  • South Korea’s jobless rate for May hits record low.
  • Toyota hit a 16-month high today after shareholders voted to retain Akio Toyoda as its chairman in a broad endorsement of the company’s board and renewed strategy.

US AND EUROPEAN HEADLINES

  • FOMC Tonight. Hawkish pause or a skip.
  • UK GDP – +0.2% M/M
  • European markets are expected to open lower.
  • Paul McCartney told the BBC that artificial intelligence was used to “extricate” and clean up the vocals of former bandmate John Lennon from an old recording, allowing them to feature in an upcoming track.
  • Manchester United shares surge on Qatari speculation.

And finally…..

I was at a mates house the other week, his ‘phone rang and he asked if I’d mind answering it. Having answered it he says: “Well who is it?” I said it sounds like some woman playing a mouth organ. “Oh” he said “That’ll be our Monica”

The National Orchestra of Bermuda just flew in to Heathrow to begin a tour.
The triangle player is missing!

Clarence

XXXX