ASX 200 Live Today - Monday, 19th May

Welcome to our live ASX coverage for Monday, May 19. We’re excited to be trialing this new format. Be sure to refresh manually for the latest updates — and let us know how we can make it even better.

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ASX 200 snaps eight day win streak

[5:00 pm] The S&P/ASX 200 couldn't extend its win streak to nine, closing 0.58% lower and near worst levels. Coincidentally, there are only nine instances where the market has managed to streak for nine or more days (since 2000).

The session had a defensive tone, where Utilities (+0.31%) and Telcos (+0.22%) managed to finish higher, while Materials (-1.55%) and Energy (-1.82%) recorded sharp declines.

Overall, we're seeing the market face some downward pressure, partly from the US credit rating downgrade. We'll have to see where the dust settles after the recent V-shaped move.

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BGH Capital and Helloworld expected to join forces for Webjet

[3:45 pm • The Australian] Market expects believe Helloworld and BGH Capital could ultimately team up in a deal that will see Webjet Group and Helloworld combine, and then get taken private.

Helloworld recently raised its stake in Webjet Group by an additional 5%, paying more than 85 cents per share. The company now owns approximately 10% of the company.

Source: The Australian

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Lithium stocks broadly lower

[2:50 pm] Its a sea of red for lithium stocks after Chinese lithium carbonate futures opened sharply lower this morning (down 2.1% to 61,240 yuan a tonne). Prices are now down around 19% year-to-date and trading at levels not seen since January 2021.

Spodumene prices (SC6, CIF China) are also down 3.3% to US$665 a tonne. To add some perspective, Pilbara Minerals' March quarter report noted average realised prices of US$851 and unit operating costs (CIF) of US$499 a tonne.

Stocks leading the downward move include Liontown (-15.9%), Patriot Battery Metals (-10.0%) and Pilbara Minerals (-8.9%).

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Stocks moving on unusual volume

[2:05 pm] These are the S&P/ASX 200 stocks experiencing unusual volume, as a % of their 20-day average volumes, as at 2:00 pm AEST.

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Stocks on the move

[2:00 pm] Here are the S&P/ASX 200 stocks making the biggest gains and declines as at 2:00 pm AEST.

Gold miners are broadly higher amid volatile gold prices, likely driven by last Friday’s US credit rating downgrade. Spot gold surged up to 1.5% earlier today, now holding a modest 0.3% increase at US$3,210 per ounce.

Lithium stocks are broadly lower after Chinese lithium carbonate futures tumbled a further 2.1% to 61,240 yuan a tonne, the lowest in over four years.

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Talga launches placement to raise $10m

[1:55 pm • AFR] Talga Group is seeking to raise $10 million at 40 cents per share or a 15% discount to its last close of 47 cents on Friday.

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Rate cut tomorrow, and two more by year's end – Morgan Stanley

[1:20 pm • By Carl Capolingua] An interest rate cut is coming tomorrow, says Morgan Stanley. "We expect the RBA will cut the cash rate 25bps, to 3.85%, at its May meeting," the broker said in a research note this morning.

Trade war uncertainty will be weighed more heavily than recent bullish indications on the Australian economy such as April's jobs report, suggests Morgan Stanley, noting "A softer global backdrop will be balanced against resilient domestic conditions, but we expect the former will have more emphasis this meeting."

There's even better news for mortgage holders and property investors, the broker is tipping the RBA will cut interest rates another two times by the end of the year. "We continue to see a further move towards more neutral settings, with two more rate cuts to end the year at 3.35%," it said.

But, Morgan Stanley also provided a warning for investors, noting that the commentary of this meeting could set the tone for the rest of the year, and that markets could be in for some disappointment from its base case.

"Should the post-statement narrative from the RBA be noncommittal or even outright hawkish, consumers and mortgagees will be disappointed and some give-back in cash rate-sensitive sectors could be on the cards," the broker said.

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Small caps making moves

[10:40 am] Here are the top small caps ($200m to $1bn market cap) winners and losers as at 10:40 am.

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Top gainers and losers at open

[10:30 am] Here are the top S&P/ASX 200 gainers and losers as at 10:30 am.

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Volatile price action for Dicker Data

[10:20 am] Dicker Data shares quickly rebounded into positive territory after a sharp opening dip, spurred by the announcement that co-founder David Dicker will step down as CEO, Chairman, and Director to pursue other interests. Here are the price points of interest:

• Open: -2.0% ($8.32)

• 10:05 am: -3.6% ($8.18)

• 10:11 am: +0.2% ($8.49)

• 10:19 am: +2.0% ($8.66)

"Dicker Data is in great hands with an experienced and strategic three-person executive leadership team - Vladimir Mitnovetski, Mary Stojcevski and Ian Welch," the company said in a statement.

All three executives have been active on-market buyers of the stock.

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Two microcap takeovers

[10:10 am] Two sub-$100 million market cap companies announced takeover bids/speculation this morning.

Matrix Composites & Engineering says it received a confidential, highly conditional and non-binding indicative proposal from Advanced Innergy Solutions. No offer price was mentioned in the announcement.

Xanadu Mines and Bastion Mining have entered into a bid implementation agreement, under which Bastion will make an off-market takeover offer to acquire the company at 8 cents per share (56% premium to Xanadu's 5.1 cent close last Friday).

Source: Matrix Composites | Source: Xanadu Mines

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Broker Moves

[9:40 am] Here are some broker ratings and target price changes that have crossed this morning.

• Fletcher Building retained Underperform; target cut to $1.85 from $1.95 (MQG)

• Insurance Australia Group downgraded to Neutral from Buy; target up to $9.30 from $8.30 (UBS)

• Orora retained Neutral; target cut to $2.10 from $2.4 0 (UBS)

• Resolute Mining retained Outperform; target up to $0.65 from $0.55 (MQG)

• Temple & Webster retained Hold; target up to $21 from $15.60 (BP)

• Xero retained Buy; target up to $215 from $196 (UBS)

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Small caps making headlines

[9:35 am] Here are a few small cap headlines of interest.

Metals X commits to $5m investment in Elementos, to subscribe for 59m shares at 8.48 cents per share, will hold 19.98% of the company after the placement.

Electro Optic Systems secures new RWS order for 31m euros (A$53m vs. $250m market cap), delivery expected to occur throughout 2025-26.

Talga Group shares halted pending capital raise announcement.

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Gentrack reports 1H25 results

[9:30 am] Gentrack reported its 1H25 results and provided a relatively vague full-year guidance. Here are the key numbers for the first-half (no consensus numbers due to lack of analyst coverage in our database):

• Revenue up 9.8% to $112m

• EBITDA up 5.1% to $13m

• Lower earnings growth due to investments in sales and tech, expects full-year EBITDA to grow faster than revenue

• Statutory NPAT up 34.7% to $7.2m

• Cash balance of $70.7m vs. $39.3m a year ago

The company's full-year guidance was relatively vague, including:

• Revenue to be at or above $230m (vs. Citi ests of $240m)

• EBITDA margin to be above 12% (vs. Citi ests of 14.0%)

The sizeable gap between its FY25 guidance and Citi estimates could translate to some downward pressure on the stock today.

Source: ASX Announcement | Company page: Gentrack (GTK)

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Lendlease sells UK development assets

[9:20 am] Lendlease has entered a 50/50 joint venture with The Crown Estate, selling UK development assets to the JV.

As part of the agreement, Lendlease will be appointed as the development manager for the JV, earning cost-plus and performance-based fees for its services. While neither partner is obligated to undertake vertical development, both retain the right to commit up to 50% of the capital for each project, with entitled land lots potentially being sold to third parties.

This transaction brings Lendlease's total announced or completed capital recycling initiatives to $2.5 billion in FY25, advancing towards its $2.8 billion target and providing further scope for a security buyback.

The news shouldn't come as a big surprise after the company confirmed 'late stage' discussions last week. However, the stock is trading at a material discount to NAV (approx 0.8x) and the confirmation of the deal/potential buyback should drive some positive flows.

Source: ASX Announcement | Company page: Lendlease (LLC)

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New Hope tweaks FY25 guidance

[9:15 am] New Hope has reported its March quarter report as well as an adjustment to its FY25 guidance.

• Q3 saleable coal production of 2.76Mt, up 3% QoQ

• Q3 coal sales of 2.74Mt vs. 2.65Mt consensus (3.4% beat)

• Underlying EBITDA of $155.2m, down 27% QoQ

• FY25 ROM coal production guidance of 15.93-17.45Mt vs. prior 15.48-17.0Mt (2.7% upgrade at midpoint)

• FY25 saleable coal production guidance of 10.58-11.57Mt vs. prior 10.83-11.87Mt (2.4% downgrade at midpoint)

• The revised FY25 guidance reflects challenges with rail capacity and performance at its New Acland Mine

Source: ASX Announcement | Company page: New Hope (NHC)

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Dicker Data CEO steps down

[9:05 am] Dicker Data co-founder David Dicker announced plans to step down from his position as CEO, Chairman and Director to pursue other interests.

"Although Mr Dicker will no longer be an executive within Dicker Data, at the request of the Board, Mr Dicker has agreed to enter into a six-month Consultancy Agreement with the Company to provide strategic advice on market terms," the company said in a statement.

The key concern here is that Mr Dicker is the company's largest shareholder, owning approximately 47.47% of shares as at March 19, 2025. Any large selldowns or block trades (which will come at a discount) could place downward pressure on the stock.

Source: ASX Announcement | Company page: Dicker Data (DDR)

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US Credit Rating Downgrade

[8:55 am] Moody's Ratings lowered the US credit score from tripe-A to Aa1 last Friday. Here are some of the key takeaways:

• Moody’s cited a decade-long increase in federal debt and interest payment ratios, now significantly higher than those of similarly rated sovereigns.

• Successive US administrations and Congress have failed to implement measures to reverse large annual fiscal deficits, which reached US$1.8tn in 2024 and are running at US$1.05tn year-to-date in 2025, 13% higher than the previous year.

• Rising costs for mandatory programs (e.g., Social Security, Medicare) and relatively low revenue generation are driving fiscal deterioration.

• Potential extension of the 2017 Tax Cuts and Jobs Act, a priority for the Trump administration, is expected to add US$4tn to the primary deficit (excluding interest) over the next decade.

The downgrade marks the first time in over a century that the US lacks a AAA/Aaa rating from any major agency, potentially undermining its status as the world’s highest-quality sovereign borrower. This could lead to higher borrowing costs for the government, impacting Treasury yields and, indirectly, consumer borrowing rates.

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Top stories from Livewire

Are US Treasuries still the world's safety net? | US Treasuries, long regarded as the global financial system's risk-free asset, are facing scrutiny due to rising deficits, political dysfunction, and softening foreign demand, exemplified by April 2025's bond market volatility. Despite these pressures, Treasuries remain a vital portfolio anchor, offering stability, attractive yields, and unmatched liquidity amidst ongoing economic uncertainties.

Sell in May, go away and lose money | The "sell in May and go away" strategy, rooted in historical market folklore, suggests selling stocks in May and switching to safer assets until November, but detailed analysis of Australian equities from 1875 to 2025 reveals no statistically significant seasonal pattern, with apparent trends being random fluctuations.

Rare earths are a big deal right now - but are they a buy? | China's retaliatory export restrictions on rare earth elements (REEs), critical for defense, tech, and green energy, have heightened U.S.-China trade tensions, spotlighting Australia's strategic role as a key non-Chinese supplier, particularly through companies like Lynas Rare Earths.

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What's driving stocks?

[8:40 am] It was a relatively quiet overnight session, where major US benchmarks finished broadly higher (S&P 500 +0.70%, Nasdaq +0.52% and Dow +0.78%).

• Markets still buoyed by de-escalation of US -China tariffs

• M&A revival, with Dick's Sporting Goods looking to acquire Foot Locker for US$2.4bn as well as Charter to acquire Cox in deal with US$34.5bn

• VIX down to 17, not far from three-month low

• US 10-year yield remains elevated but still slightly below key 4.5% level

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Good morning!

[8:35 am] S&P/ASX 200 futures are down 8 pts (-0.08%) as of 8:30 am AEDT.

If you’re new to the blog – catch up quick via today’s Morning Wrap.