ASX 200 closed up 78 points to 7197 (+1.1%), boosted by cooler-than-expected inflation results. The Aussie dollar fell to 66.43c (-0.6%), and the 2Y and 10Y bonds took a hit following inflation results, before closing down 6bps and 5bps, respectively. Interest rate-sensitive sectors performed well. Consumer discretionary the best-performing sector today WES up 1.3%, JBH up 2.5%, and SGR jumped 11.5%. Banks rallied, with the big four all gaining over 1%, with NAB the standout up 1.9%. Big Bank Basket up to $170.62 (+1.4%). Energy stocks are up on higher oil prices as WTI crude futures rose above $68 a barrel. STO +1.2%, WDS +1.1% and S32 +1.1%. REITS gained as treasury yields fell. Defensive sectors outperformed. Healthcare stocks were mostly better, RMD up 1.1% and RHC up 4.8%. Industrials were strong today, WOW up 0.3%, and ELD up 5.2%. Travel stocks enjoyed a small rally, FLT up 3.1%, KLS up 1.0%, and WEB up 2.8%. Iron ore better, BHP +0.7% RIO +1.0% and FMG +0.3%. Gold was sold off, nearing three-month lows after strong economic data from the US overnight and today’s CPI result. NST -1.0%, EVN -0.9%, and PRU -1.2%. In corporate news, LRS +18.4% confirmed the presence of a significant lithium corridor at its Salinas Lithium Project in Brazil, QAN +3.2% onits management reshuffle, PBH +0.6% board unanimously recommends Fanatics Betting and Gaming’s improved proposal of US$225m to acquire PointsBet’s US Business, HVN up 4.9% on solid preliminary results, and COF +1.8% completed $225m of debt refinance and divests Clarke St property in Canberra for $23m. In economic news, Australia’s headline inflation came in at 5.6%, significantly below consensus of 6.1%, down from 6.8% in April. Core inflation fell to 6.4%, slightly lower than April’s 6.5%. China’s industrial profits fell 18.8% YoY, the decline followed a 20.6% plunge in the prior period as a softening demand squeezed margins reinforcing hopes of more policy support to bolster economic recovery. Asian markets subdued, Japan up 2.0% as the Yen nears a 15-year low on a rising euro, HK flat, and China up 0.1% after Beijing fixed the currency lower than many expected. Bitcoin down 0.42%. Dow Jones futures down 5 points and Nasdaq futures down 44 points.

HIGHLIGHTS

• Winners: LRS, SGR, CTT, VUL, IMU, SYR, TUA
• Losers: BGA, PMT, SYA, WGX, RSG, BFL.
• Positive sectors: Everything bar gold
• Negative sectors: Gold
• High 7215 Low 7118
• Big Bank Basket: up 1.4% to $170.62
• All-Tech index: Up 1.4%
• Gold: Higher at $2891
• Bitcoin: Down to $US30,402
• Aussie Dollar: Lower at 66.43c
• 10-Year Yield: Dropping to 3.88%
• Asian markets: Japan up 2% HK flat and China up 0.1%
• US Futures: Dow down 5 Nasdaq down 44.
• European markets expected to open slightly higher.

MAJOR MOVERS

• LRS +18.4% Salinas lithium corridor confirmed.
• SGR +11.5% big volume bounce.
• CTT +8.9% rally continues.
• VUL +8.5% finding friends.
• AZS +3.7% kicks higher again with good momentum.
• CKF +7.5% broker upgrades. Shut up and take my money!
• ENR +24.5% mineralised carbonatites intersected at West Arunta.
• BET +13.0% PBH move perhaps and buy back completed.
• DGL +9.0% bargain hunters.
• PPT +2.0% client data breach spreads.
• HVN +4.9% Citi cuts PT by 10%
• ELD +5.2% year end touch up.
• HAS +11.2% Macquarie Critical Minerals Forum presentation.
• BGA -8.5% sours at 10-year low.
• CAJ -7.1% business update.
• SKO -6.6% AGM update and guidance.
• PMT -3.5% under a little pressure.
• JLG -1.9% still falling.
• RSG -2.4% gives back yesterday’s gain.
• Speculative Stock of the Day: Ora Gold Mines (OAU) +60.0% exceptional high grade gold intercepts at Crown Prince. Not huge volume and penny dreadful.

COMPANY NEWS

• Pointsbet Holdings Ltd (PBH) – Board unanimously recommends Fanatics Betting and Gaming’s improved proposal of US$225m to acquire PointsBet’s US Business, representing a 50% increase to prior bid.
• Centuria Office REIT (COF) – Completed $225m of debt refinance and divests Clarke St property in Canberra for $23m a 1.7% discount to book value.
• NRW Holdings Limited (NWH) – Received a Letter of Intent from Allkem Limited (AKE) for a mining services contract at the Mt Cattlin lithium mine in Western Australia, valued at around $332m over 36 months, includes Load & Haul, Drill & Blast, and Material Rehandling services.
• Musgrave Minerals (MGV) – Rejected an unsolicited buyout offer from Westgold Resources (WGX) stating that the offer undervalues the company. The offer, which proposed exchanging one Westgold share for 5.37 Musgrave shares, was unanimously rejected by Musgrave’s board.
• Ramsay Health Care (RHC) – Considering a 50/50 joint venture with Sime Darby Health Care, citing significant interest in Sime Darby that warrants consideration. In order to repay debt, Ramsay has obtained a three-year loan of $1.5bn from one of its two main banks.
• Qantas Airways (QAN) – Made several executive appointments and changes within the company. Markus Svensson, currently the CCO, has been appointed as the domestic CEO. Rob Marcolina will transition from his executive role in strategy, people, and technology to become the CFO. QantasLink CEO John Gissing will retire in November.
• Boss Energy Limited (BOE) – Achieved a major milestone in the restart of the Honeymoon uranium project in South Australia, with the completion of the first wellfield and the near completion of related gypsum ponds and water treatment plants. On track for production in the December quarter of 2023.
• Latin Resources (LRS) – Confirmed the presence of a significant lithium corridor at its Salinas Lithium Project in Brazil. Multiple spodumene-rich pegmatites have been intersected in diamond drill holes, extending the “Colina pegmatite system” southwest of the Colina Deposit.
• Harvey Norman Holdings (HVN) – Provided unaudited, preliminary, draft accounts indicating that the expected profit before tax and non-controlling interests for the year ending June 30, 2023, is within a range of +/- 5% of $670m. Net property revaluations for the same period are estimated to be around $119m.
• Neuren Pharmaceuticals (NEU) – Opened the first site in the United States for its Phase 2 clinical trial of NNZ-2591 in Prader-Willi syndrome, aiming to generate data for subsequent registration trials.

ECONOMIC & OTHER HEADLINES

• Australia eyes bigger budget surplus but warns economy still slowing.

AUSTRALIAN CPI

• In May, the monthly CPI indicator increased by 5.6%, showing a decrease from April’s 6.8%. The annual movement for the CPI excluding volatile items and travel rose by 6.4%, while the annual trimmed mean inflation decreased to 6.1% from 6.7% in April. The most significant price rises were Housing (+8.4%), Food and non-alcoholic beverages (+7.9%) and Furnishings, household equipment and services group (+6.0%). Offsetting the rise was Automotive fuel (-8.0%). This now gives room for the RBA to pause rate hikes in July as inflation appears to be cooling.

• New dwelling prices experienced an 8.3% increase over the twelve-month period ending in May, primarily driven by high labor and material costs. However, the rate of price growth has been gradually slowing down compared to the previous record-high increase of 21.7% in the twelve months leading to July 2022.

• CBA predicts the global economy will expand by only 2.4% in 2023 and 2.1% the following year because of high interest rates.

ASIAN MARKETS

• China’s industrial profits recorded an 18.8% year-on-year decline in the first five months, following a 20.6% contraction in January-April, indicating a weakening economy.

• Chinese foreign firms saw a 13.6% decline in earnings, while private-sector companies saw a 21.3% slide.
• Xi says China and New Zealand should promote trade and investment. He pledged that his nation would ‘do right’ by foreign investors.
• China stocks fall on weak industrial profit, US weighing new chip export curbs.
• Tesla to hit record quarterly sales in China even as market share shrinks.
• Soaring Japan tech puts Nikkei on track to snap 4-day losing streak.

US AND EUROPEAN HEADLINES

• Fed will release its annual bank stress test today.
• US weighs tougher restrictions on AI chip exports to China.
• US banks step up sales of loan portfolios to private lenders.
• European airport boss calls for scrutiny of rising airfares.
• Bernard Arnault, the billionaire CEO of LVMH, is making his first trip to China since the pandemic. He has been spotted doing some shopping.
• UBS is planning to cut more than half of Credit Suisse’s 45,000-strong workforce starting next month. It aims to save some US$6bn in staff costs in the coming years.

And finally…..

Clarence

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