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ASX regrouped after an early swoon jumping 81 points to 7681 (+1.1%). The CPI number turned things around coming in below forecast and pointing to zero chance now of a rate rise. Rate cuts could be sooner rather than later. Looked like some month end window dressing helping things along too. Banks continue to lead the market ever higher, CBA up to another record up 1.3%, WBC up 1.5%, and ANZ up 1.5%. MQG rose 1.3%, with financials and REITs kicking higher. Insurers doing exceptionally well, QBE up 2.7% and SUN up 1.9% as CPI showed strong insurance growth. Industrials were solid, TLS up 0.5%, with supermarkets finding friends COL up 1.3% and EDV up 1.6%. Utilities doing well, ORG numbers helped this morning, APA up 1.6%, and TCL managing a 1.1% gain. Tech slightly higher despite US slipping slightly. Resources were once again a mixed bag; Oil and gas were better as crude prices rose in Asia, WDS was up 1.7%, and coal was better. Iron ore stocks moving a little sideways, lithium remains an outpost of negativity, PLS down 1.4% and MIN slipping back 1.5%. Gold miners fell, NST down 1.4%. In corporate news, plenty of quarterlies dropping. WBT fell 9.8% on royalty timing concerns, IGO down 2.2% after placing Cosmos on care and maintenance, CCP dropped 2.6% and posted a net loss. On the economic front, Chinese factory activity shrank again, local inflation slowed to 0.6% in Q4. Over the last 12 months, CPI fell back to 4.1% from 5.4%. Asian markets slipped again, with Japan up 0.6% HK off 1.1% with China off 0.4%. 10Y yields dropping to 4.03%. Dow Futures up 22 points. NASDAQ Futures down 140 points. 

HIGHLIGHTS

  • Winners: NIC, SGR, TAH, CIA, SIG, HDN
  • Losers: WBT, WC8, IMU, PRN, RED, AD8, DMP, LTM
  • Positive sectors: Pretty much everything.
  • Negative sectors: Lithium depressed again.
  • ASX 200 Hi 7682 Lo 7570
  • Big Bank Basket: Pushes hard up to $201.51 (+1.4%)
  • FOMC tonight.
  • All-Tech Index: Flat.
  • Gold: Better at $3095
  • Bitcoin: Settles a little lower at US$42899
  • 10-year eases to 4.01%
  • AUD: Lower at 65.71c
  • Asian markets: Japan up 0.6%, HK down 1.1% as selling returns, China down 0.4%
  • Dow Futures flat Nasdaq down 140

MAJOR MOVERS

  • NIC +9.7% broker upgrades.
  • TAH +5.3% defensive buying.
  • CIA +4.8% positive quarterly.
  • SLX +3.0% uranium bounce resumes.
  • ASK +3.7% rates on notice.
  • PLY +20.8% strong quarterly result.
  • SHV +17.0% going nuts.
  • DSE +7.41% finding friends on tech rally.
  • WBT -9.8% wot no royalties!
  • SDR -3.8% quarterly.
  • RED -4.6% quarterly.
  • CCP -2.6% US write-downs.
  • AD8 -4.5% rare sell off.
  • PAR -16.0% burning through cash.
  • GLN -19.4% capital raising hurts.
  • 29M -19.1% Broker downgrades.
  • ART -10.0% always subjective. Disappointing quarterly.
  • PRN -4.7% supports IGO in the Cosmos.
  • Speculative Stock of the Day: Select Harvest (SHV) +17.0% Good volume on strong crop volumes and stronger market pricing. Not huge volume but then in speculative stocks nothing volume-wise again.
  • Winners: NIC, SGR, TAH, CIA, SIG, HDN
  • Losers: WBT, WC8, IMU, PRN, RED, AD8, DMP, LTM

COMPANY NEWS

ECONOMIC AND OTHER HEADLINES

  • Australian CPI rose 0.6% in the December quarter (vs. 0.8% expected) and 4.1% annually (vs. 4.2% expected) according to the ABS. This is now the first time in over four years that the inflation rate has fallen below the RBA’s target cash rate (currently at 4.35%). The annual reading has fallen 3.7% since its peak two years ago. Core inflation (excluding food and energy) came in slightly higher at 4.2%.
  • APRA will conduct a stress test on large banks mid-year. Banks have been able to handle higher mortgage repayments “very well” said the chair.
  • Chinese Manufacturing PMI reaches 49.2 in January, below expectations. Non-manufacturing gauge hits 50.7, better than December’s 50.4.
  • China merges hundreds of rural banks as financial risks mount. Move affects 2,100 rural banks with US$6.7 trillion assets
  • Evergrande’s liquidation crisis won’t be China’s ‘Lehman moment,’ China Beige Book CEO says.
  • Samsung optimistic on chip demand despite decline in net profits.
  • A judge in the US has ruled that the US$55bn pay packet for Elon Musk is excessive. Really?
  • China’s Temu launches $3bn US online ads blitz in challenge to Amazon.
  • FOMC in focus. Tech too.