ASX 200 closed down 43 points to 7315 (-0.6%), easing after seven days of gains as commodity stocks lost traction on Chinese demand concerns. Gold stocks led today, falling 1.9%. NST down 2.3%, and NCM off 1.2%. Miners followed closely as iron ore prices fell. BHP lost 1.1%, RIO down 1.4%, and FMG off 1.7%. Lithium stocks mixed, MIN -1.1%, PLS +2.2%, and AKE +1.3%. Healthcare stocks healthier, with MSB +5.8% and TLX up 6.0%. Insurers are also good. QBE, IAG, and SUN all hit 52-week highs as the market bets their asset base will benefit from higher yields as rates rise. Tech rallied in the morning before a sell-off at lunchtime. All-Tech Index down 0.4%. XRO hit a new 52-week high in the morning, reaching $121.29, before closing down 1.1%. Banks mixed, CBA +0.1%, NAB +0.1%, ANZ -0.5% and WBC -1.0%.The Big Bank Basket slipped to $173.11 (-0.1%). Elsewhere, WES down 1.6%, GMG off 1.3%, and JBH off 2.4% as money found a way back into staples. In corporate news, the ACCC blocked a network-sharing agreement between TLS and TPG. TPG fell as low as 10.8% before stabilising in the afternoon and closing down 5.4%. SUL down 2.6% after UBS downgraded the stock. LKE up 4.9% as bargain hunters stepped in, following a 41% fall in the previous two sessions. DXS up 1.1% despite announcing a ~$1bn loss in asset revaluation. SYA announced positive preliminary lithium study results in Canada. In economic news, the Westpac-Melbourne Institute Leading Economic index was flat from the previous month in May. Asian markets mixed, Japan’s Nikkei rises on dip buying, up 0.5%, HK falling for a third straight session tracking US-listed Chinese stocks, down 1.9%, and China off 0.6%. Australian bond yields ease 2Y yield down 7bps to 4.1%, and 10Y yield down 7bps to 3.98%. Bitcoin up 1.69%, YTD +74.62%. Dow Jones futures down 27 points, and Nasdaq futures down 18 points.

HIGHLIGHTS

• Winners: FCL, LRS, WBT, MSB, TLX, CKF, PRN, SMR
• Losers: FLT, SLR, GMD, TPG, GRR, PMV, AX1
• Positive sectors: Staples. Fund managers. Insurers.
• Negative sectors: Iron ore. Gold miners. Oil and gas. Tech.
• High 7349 Low 7315
• Big Bank Basket: Lower at $173.11 (-0.1%)
• All-Tech index: Down 0.4%
• Gold lower at $2854
• Bitcoin:  Rallies to US$28,868
• Aussie Dollar: Slips to 67.85c
• 10-Year Yield: Lower at 3.98%.
• Asian markets: Japan up 0.5%, China down 0.6% and HK off 1.9%
• US Futures: Dow down 27 Nasdaq down 18. Powell in focus.
• European markets opening flat after UK CPI.

MAJOR MOVERS

• FCL +8.3% kicks again on recent contract win.
• WBT +6.4% shoulders stock doing well.
• LRS +7.5% presentation.
• CKF +5.2% ‘shut up and take my money’.
• MSB +5.8% surprising really.
• ELD +2.4% short covering?
• CHN +2.0% broker upgrade.
• BUB +31.0% US audit and update.
• AXE +14.3% Quantum is sexy again.
• TPG -5.4% merger news.
• GRR -5.4% iron ore stalls.
• GMD -5.6% winner of Leonora assets.
• SLR -5.8% loser of SBM assets.
• PMV -4.9% consumer stocks under pressure.
• FLT -6.9% strategy session. Bears winning.
• MQG -2.6% no news.
• CTT -2.7% giving some gains back.
• SUL -2.6% retail still stuffed.
• DGL -8.0% sinking.
• Speculative Stock of the Day: Iris Metals (IR1) +29.3% back on the Bourse with an oversubscribed capital raise at 100c to pocket $15m towards the drilling of a recently acquired lithium project in South Dakota.

COMPANY NEWS

• Telstra (TLS) / TPG (TPG) – The Australian Competition Tribunal has rejected the proposed Telstra-TPG agreement to jointly utilise infrastructure in regional Australia.
• Fletcher Building (FBU) – Lowered EBIT guidance to around NZ$800m with a margin of 9%. The company also revised its house sales guidance downwards, citing a slowdown in the country’s housing market.
• Regional Express (REX)- Announced that it expects to incur an operational loss of $35m and will not achieve a profit in FY23. The downgrade is attributed to supply chain disruptions and a pilot shortage, which have impacted travel capacity. Too many old planes.
• BHP Group (BHP) – Announced its goal to achieve a 30% reduction in operational carbon emissions by 2030. To achieve this target, BHP plans to invest approximately $4bn in initiatives aimed at reducing emissions from gas, diesel, and electricity outputs.
• Bapcor Ltd (BAP) – Successfully refinanced $150m of debt facilities due in July 2024, with new tranches totaling $250m maturing in July 2027 and July 2028.
• Objective Corporation Ltd (OCL) – Announced On-market share buyback of 95m shares.
• Growthpoint Properties Australia (GOZ) – Declares H2 distribution of 10.7cps bringing FY23 distribution to 21.4cps in line with guidance and a payout ratio of 80.1%.
• Sayona Mining (SYA) – Conducted a positive preliminary study for the production of lithium carbonate at its North American Lithium (NAL) Project in Québec, Canada. The study shows a pre-tax NPV of A$3.2bn and a pre-tax IRR of 60% for the standalone carbonate plant.
• Westpac Banking Corporation (WBC) – Concluded sale process for BT platforms; will retain business.
• Cleanaway Waste Management Ltd (CWY) – Reaffirmed FY guidance in Blueprint 2030 strategy presentation; EBITDA ~$670m.
• Dexus (DXS) – Reported a draft external independent asset valuation has resulted in a $1bn or 6% fall on prior book values for the six months to 30 June 2023.
• Bubs Australia Ltd (BUB) – Guides US FY23 revenue to be at the upper end of previous forecast range of $20-22m vs $8.1m in FY22.
• 3P Learning (3PL) – Reduced its financial 2023 sales guidance to $106-108m, down from the previous range of $111-115m. Additionally, it anticipates that its financial 2023 EBITDA will be towards the lower end of the previous range of $15-18m.
• Adriatic Metals (ADT) – Provided an update on the Vares Silver Project, stating that 78% of the construction is complete, with first concentrate production expected in November 2023. The final project cost estimate is $182m, and the company remains fully funded until project completion.

ECONOMIC & OTHER HEADLINES

• In April 2023, total wages and salaries paid by employers fell by 1.7% or $1.6 billion from March 2023
• Total wages and salaries paid by employers was $91.4 billion in April 2023

ASIAN MARKETS

• China extended tax breaks through 2027 for consumers buying clean cars to support the EV industry and policymakers are facing growing calls for economic stimulus. Several investment banks have downgraded their growth forecasts for China in the past week amid mounting evidence of a slowdown, although most of them expect Beijing to still meet its relatively conservative target of around 5% for the year.
• Chinese electric car company Nio announced Tuesday it received $738.5m in new capital from a fund owned by the Abu Dhabi government. Should make them into golf buggies.

US AND EUROPEAN HEADLINES

• UK Inflation report today. UK May CPI 8.7% Y/Y v 8.4% consensus. Same as April number.
• UK Core CPI up 7.1% Y/Y v 6.8% forecast. BoE rate rise tomorrow? Hunt says resolved to crush inflation.
• Slight bounce higher in European markets snuffed out by CPI..
• Biden to meet with Indian PM Modi. Full state visit.
• Hunter Biden hit with federal tax and firearm charges.
• U.S. President Joe Biden referred to Chinese President Xi Jinping as a ‘dictator’ at a fundraiser after Blinken went to mend ties.
• And the only winners as usual are…the administrators. FTX bankruptcy ‘on track to be very expensive’ as fees top US$200m.
• A Canadian aircraft has detected underwater noises during the search for a submersible that vanished whilst diving on the wreck of the Titanic.

And finally….

Clarence

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