The ASX 200 dropped 86 points to 8926 (-1.0%) as inflation came in hotter than expected and snuffed out any rate cut hopes for next week. The banks bore the brunt, CBA down 2.1% and WBC falling 3.1% with the Big Bank Basket falling to $289.08 (-2.1%). Insurers fell, QBE down 1.6% and SUN off 2.0%. Other interest rate stocks fell, TCL down 1.9% and REITs under pressure, GMG down 1.4% and SGP off 3.9%. Industrials eased back, WES dropped 1.7% and ALL off 1.6% with WOW up 2.4% as COL fell 1.9%. CSL continued to decline down 4.0% and XRO falling 2.0% with the All-Tech Index off 1.4%. In resources, iron ore rallied, BHP up 1.3% and FMG up 1.0% and the gold sector doing much better, EVN up 2.4% and NST up 2.4%. Rare earths still under some pressure, ARU off 20.0% as the capital raise weighed, lithium stocks trying to push higher, PLS up 1.6% and the uranium sector soaring on a Cameco deal in the US and BOE jumped 19.8% on quarterly numbers, PDN up 11.3% and oil and gas flat.

In corporate news, NCK gained 12.7% on strong Q1 ANZ sales. WOW up 2.4% on quarterly sales, SDR rose 2.5% on a trading update. On the economic front, underlying inflation came in stronger than expected at 3%. Rate cuts are off for 2025. Trimmed mean of 1% QoQ. Well above the forecast 0.6%.

Asian markets generally firm, Nikkei 225 up 1.9%, HK up 0.1% and China up 0.4%.

10-year yields 4.23%. US Futures mixed.

HIGHLIGHTS

  • Winners:  BOE, DTR, FML, BMN, NCK, PDN, NXG
  • Losers: ARU, DRO, CRN, ASB, SDF, PME
  • Positive Sectors: Gold miners. Iron ore. Lithium.
  • Negative Sectors: Interest rate sensitive. REITs. Banks. Healthcare.
  • ASX 200 Hi 9022   Lo 8922
  • Big Bank Basket: Falls to $289.08 (-2.1%)
  • All-Tech Index: Down 1.4%
  • Gold: slips to $6002
  • Bitcoin: rises to US$112953
  • AUD: Better at 65.97c.
  • In Asian markets – Tokyo up 1.9%, HK down 0.3% and China up 0.5%.
  • 10-year yields higher at 4.22%.
  • US futures – Dow down 45 Nasdaq up 73
  • European markets set to open flat.

MARKET MOVERS

  • DTR +16.7% back – volatility continues.
  • BOE +19.8% better production report and short squeeze.
  • NCK +12.7% quarterly report.
  • PDN +11.3% NXG +10.8% uranium squeeze on Cameco deal.
  • EOS +6.9% defence stocks finding buyers.
  • LDX +15.0% bounces back.
  • AGE +21.7% quarterly report.
  • NMG +7.1% broker upgrade.
  • TM1 +19.4% Massive sulphides intercepted at Southwest.
  • LOT +8.6% uranium rally.
  • ARU -20.0% capital raise.
  • DRO -12.2% ASB -7.1% defence slips.
  • AFG -3.3% rate cut off.
  • LRM -13.6% exceptional rutile grades at 2.2% insitu at Minta
  • CCV -6.0% capital raise.
  • CSL -4.0% falls again.
  • MYR -3.6% continues to fall.
  • Speculative Stock of the Day:  MRD +41.7% reports world’s biggest gallium resource.

ECONOMIC AND OTHER NEWS

  • Nup to the cut – Underlying Inflation jumped to a three-year high at 3%. The result, well above the 2.7% underlying price rise market economists were expecting.
  • AMP economists are sticking with their call for interest rate cuts, albeit not until next year.
  • Westpac’s chief economist Luci Ellis said inflation would keep interest rates on hold next week, the delay only added to the chance of more reductions next year.
  • Fed in focus. Trump floats Treasury secretary Scott Bessent as new Fed chair.
  • Tech results kick off.
  • Nikkei 225 blows through 51,000. First time ever.
  • Chinese lithium prices are getting a boost from growing confidence in demand for large-scale battery storage. The most-active lithium carbonate contract on the Guangzhou Futures Exchange has risen for five sessions in a row.
  • Hopes are high for an extension of the tariff and export-control truce — for longer than 90 days — alongside Chinese purchases of US agriculture products, a conclusion of the TikTok deal, and a potential reduction in US tariffs linked to fentanyl.
  • Trump said he may discuss Nvidia’s Blackwell AI chips, the ‘super-duper’ ones,  with Chinese President Xi Jinping.
  • Amazon to invest another $5bn in data centres in South Korea.

And finally….

The swordfish has few predators to worry about in the wild, Except for the seldom seen penfish, which is said to be even mightier…

The police just pulled me over, and the officer came up to my window and said “papers?” I said “scissors, I win!” and drove off. He’s been chasing me for 45 minutes now, I think he wants a rematch.

Clarence

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