Evening Wrap: ASX 200 belted on further rate cut delay woes, gold stocks smashed, uranium stocks soar

A dismal day on the Aussie share market for all but one tiny sub-sector.

Why was everything else so bad? Investors are once again fretting they're not going to get their much anticipated interest rate cuts as soon as they would wish.

And the "as soon as they would wish" part is getting drawn out and out – quite possibly no longer in 2024 😭.

It wasn't all doom and gloom, however. There was a warm radioactive glow coming from ASX uranium stocks which exploded higher on as many as four possible reasons.

To learn about these reasons, and the best and worst of today's market gyrations...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 94.2 points lower at 7,569.9, 1.24% from its session high and just 0.18% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a dismal 34 to 243.

All eleven of the major ASX sectors were down today (there, I said it again!). The least worst sectors were Utilities (XUJ) and Financials (XFJ) which each fell 0.6% – and let’s face it, this is still lousy.

The rest ranged from the above two’s lousy to the really lousy 2% each declines of Resources (XJR) and Energy (XEJ). But the dubious honour of disgustingly lousy went to the Gold (XGD) sub-index, which dumped 4%. Yuk 🤢!

Why? Answer: Exactly what I said in yesterday's update. Gold and silver charts were precariously placed. Some investors dumped gold stocks yesterday in anticipation, and others dumped them today following last night's 2.3% drop in the gold price.

The worst of resources stocks today, hint: they were mainly gold stocks!

There was however, one tiny radioactive glow among the carnage. Uranium stocks had a stonking day as per the table below. There’s potentially four reasons for this (and no doubt one of them absolutely might be correct!):

1. The US Senate voted Tuesday evening to approve legislation banning the import of enriched uranium from Russia

2. Front month uranium futures rose 2.3% on Tuesday on COMEX (see ChartWatch)

3. Toronto-based “situations” fund manager MM Asset Management has popped up on Deep Yellow’s share register with a 5% stake

4. Global uranium heavyweight Cameco (NYSE: CCJ) is up around 5% in after hours trade after releasing its March quarter results after market Tuesday

A warm radioactive glow across local uranium stocks today

ChartWatch

Bond Yields, Australian & US 10 Year Government Bonds

It's always all about yields...

Why did we get belted today? The answer to any question of this nature usually has something to do with yields. Market rates. The cost of money.

Q. What does the cost of money influence?

A. Anything you can buy with money (like stocks!)

It's always all about yields...and they trudged higher Tuesday – both abroad (see the chart above of the US 10 year T-Note yield), and locally (see the chart below of the Australian Government 10 year bond yield).

It's always all about yields x 2

Basically, you have to think of these charts like this: If you are a trend follower (I trust, like me, that you are), would you buy or sell the asset who's price is shown in each chart?

As a trend follower, both of these charts look fantastic to go higher. I.e., the return you can get in a zero risk asset like each of these government bonds is increasing. In short, why would you want to buy anything which yields less and is more risky? (E.g., pretty much all stocks!)

Uranium Futures COMEX

All hail the dark green zone...for now!

I thought given the melt-up in ASX U-stocks today, I'd better revisit this one. Last time we looked at the uranium futures chart, we were hoping the price action would return to rising peaks and rising troughs (i.e., demand reinforcement and supply removal, buy the dip, etc.) and that the dynamic support of the long term uptrend ribbon would hold.

I'm going to say two checks for now on both items, and now add in a close above the dynamic resistance of the short term trend ribbon. Tripple check.

As far as I can tell, the demand-side looks like they're still in control here. This means there's no reason the uranium futures price can't probe higher retracements of the January-March pullback. I suggest a move above US$92/lb would likely seal the deal.

Economy

Today

• There weren't any major economic data releases in our time zone today

Later this week

Thursday

• 00:00 USA JOLTS Job Openings March (8.68 million forecast vs 8.76 million February)

• 04:00 USA Federal Reserve official cash rate, statement, and press conference (no change at 5.25-5.50%)

Friday

• 22:30 USA Non-Farm Employment Change April (+243,000 forecast vs +303,000 March); Unemployment rate April (3.8% forecast, no change); Average Hourly Earnings April (+0.3% forecast, no change)

Saturday

• 00:00 USA ISM Services PMI April (52.0 forecast vs 51.4 March)

Latest News

Interesting Movers

Trading higher

• +11.1% Mesoblast (MSB) - No news, not going to try to explain this one away…just consistent with recent extreme volatility

• +9.7% Bannerman Energy (BMN) - No news, combination of positive factors drove broad ASX uranium sector gains, rise is consistent with prevailing short and long term uptrends 🔎📈

• +7.5% Clarity Pharmaceuticals (CU6) - Continued positive response to yesterday's Quarterly Activities/Appendix 4C Cash Flow Report plus Complete response with Cu-67 SAR-bisPSMA, rise is consistent with prevailing long term uptrend, closed back above short term uptrend ribbon 🔎📈

• +6.5% Deep Yellow (DYL) - No news, combination of positive factors drove broad ASX uranium sector gains, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.1% WA1 Resources (WA1) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.0% Paladin Energy (PDN) - No news, combination of positive factors drove broad ASX uranium sector gains, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.0% Alligator Energy (AGE) - No news, combination of positive factors drove broad ASX uranium sector gains, bouncing off long term uptrend ribbon 🔎📈

• +4.6% Amcor (AMC) - March Quarter Results

• +4.5% Peninsula Energy (PEN) - No news, combination of positive factors drove broad ASX uranium sector gains

• +4.5% Strike Energy (STX) - No news 🤔

• +4.3% Silex Systems (SLX) - No news, combination of positive factors drove broad ASX uranium sector gains

• +4.2% Life360 (360) - No news 🤔

• +4.0% Boss Energy (BOE) - No news, combination of positive factors drove broad ASX uranium sector gains

Trading lower

• -10.8% Electro Optic Systems Holdings (EOS) - No news today, possible delayed response (i.e., from overseas investors) to yesterday's Business Activity Statement & Appendix 4C - Mar 2024 Qtr

• -8.4% Coronado Global Resources (CRN) - No news today, but several broker price target cuts (see Broker Moves) following yesterday's Q1 2024 Quarterly Activities Report, fall is consistent with prevailing short and long term downtrends 🔎📉

• -7.9% Emerald Resources (EMR) - No news, general weakness in the gold sector today following 2.3% drop in the gold price Tuesday, price action now shows falling peaks and falling troughs, closed below the short term uptrend ribbon 🔎📉

• -7.8% Red 5 (RED) - Change in substantial holding (sell down), general weakness in the gold sector today following 2.3% drop in the gold price Tuesday

• -7.1% Firefly Metals (FFM) - No bad news (Becoming a substantial holder), likely caught up in gold sell off

• -6.7% Ramelius Resources (RMS) - No news, general weakness in the gold sector today following 2.3% drop in the gold price Tuesday

• -5.9% Regis Resources (RRL) - No news, general weakness in the gold sector today following 2.3% drop in the gold price Tuesday

• -5.6% Perseus Mining (PRU) - No news, general weakness in the gold sector today following 2.3% drop in the gold price Tuesday

Broker Notes

• 4DS Memory (4DS) retained at buy at Ord Minnett; Price Target: $1.20

• Aeris Resources (AIS) downgraded to underweight from neutral at Macquarie; Price Target: $0.20 from $0.15

• Ampol (ALD)

  • Downgraded to neutral from overweight at Barrenjoey; Price Target: $37.76 from $39.60

  • Retained at outperform at Macquarie; Price Target: $40.35 from $42.50

  • Retained at equal-weight at Morgan Stanley; Price Target: $40.00

• ANZ Group (ANZ) retained at underperform at Macquarie; Price Target: $27.00

• Bapcor (BAP) retained at equal-weight at Morgan Stanley; Price Target: $5.75

• Beach Energy (BPT)

  • Retained at outperform at Macquarie; Price Target: $2.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $1.68 from $1.71

• Big River Industries (BRI) retained at buy at Ord Minnett; Price Target: $1.91 from $2.39

• Bubs Australia (BUB) retained at hold at Bell Potter; Price Target: $0.15 from $0.14

• Commonwealth Bank of Australia (CBA) retained at underperform at Macquarie; Price Target: $95.00

• Cooper Energy (COE) retained at outperform at Macquarie; Price Target: $0.25 from $0.27

• Coles Group (COL)

  • Upgraded to outperform from underperform at CLSA; Price Target: $17.60 from $17.10

  • Retained at outperform at Macquarie; Price Target: $17.50

  • Retained at equal-weight at Morgan Stanley; Price Target: $15.60

  • Retained at lighten at Ord Minnett; Price Target: $15.00

  • Upgraded to buy from neutral at UBS; Price Target: $18.25 from $17.50

• Coronado Global Resources (CRN)

  • Retained at buy at Bell Potter; Price Target: $1.60 from $1.65

  • Retained at outperform at Macquarie; Price Target: $1.80 from $2.00

  • Retained at hold at Ord Minnett; Price Target: $1.30 from $1.40

• Carnarvon Energy (CVN) retained at outperform at Macquarie; Price Target: $0.28

• Droneshield (DRO) upgraded to buy from hold at Bell Potter; Price Target: $1.00

• DUG Technology (DUG) initiated at buy at Shaw and Partners; Price Target: $3.45

• Elanor Commercial Property Fund (ECF) retained at hold at Ord Minnett; Price Target: $0.76 from $0.75

• Electro Optic Systems Holdings (EOS) retained at buy at Bell Potter; Price Target: $2.20

• Evolution Mining (EVN) retained at buy at Citi; Price Target: $4.50 from $3.90

• Envirosuite (EVS) retained at buy at Bell Potter; Price Target: $0.10

• Frontier Digital Ventures (FDV) retained at buy at Bell Potter; Price Target: $0.77

• IGO (IGO)

  • Retained at neutral at Citi; Price Target: $7.60

  • Downgraded to outperform from buy at CLSA; Price Target: $8.75

  • Downgraded to neutral from positive at E&P; Price Target: $9.00 from $10.30

  • Downgraded to underweight from neutral at JP Morgan; Price Target: $6.30 from $6.60

  • Retained at neutral at Macquarie; Price Target: $7.60 from $7.70

  • Retained at underweight at Morgan Stanley; Price Target: $6.05 from $5.90

• Impedimed (IPD) retained at buy at Ord Minnett; Price Target: $0.16

• IPH (IPH) retained at outperform at Macquarie; Price Target: $7.35 from $9.60

• Jupiter Mines (JMS) retained at outperform at Macquarie; Price Target: $0.35 from $0.30

• Karoon Energy (KAR) retained at outperform at Macquarie; Price Target: $2.50

• Liontown Resources (LTR) retained at buy at Bell Potter; Price Target: $1.85 from $1.90

• Megaport (MP1) retained at hold at Ord Minnett; Price Target: $15.00

• National Australia Bank (NAB) retained at underperform at Macquarie; Price Target: $32.50

• Nickel Industries (NIC)

  • Downgraded to neutral from buy at Citi; Price Target: $1.10 from $0.80

  • Retained at outperform at Macquarie; Price Target: $1.20 from $1.18

  • Retained at overweight at Morgan Stanley; Price Target: $0.95

• Noumi (NOU) retained at buy at Bell Potter; Price Target: $0.18

• Opthea (OPT) upgraded to neutral from negative at E&P; Price Target: $0.70

• Origin Energy (ORG)

  • Retained at outperform at Macquarie; Price Target: $10.14 from $9.97

  • Retained at equal-weight at Morgan Stanley; Price Target: $8.88

• Pacific Current Group (PAC) retained at buy at Ord Minnett; Price Target: $12.50

• Pointsbet Holdings (PBH) retained at buy at Ord Minnett; Price Target: $0.70 from $1.05

• RMA Global (RMY) retained at buy at Bell Potter; Price Target: $0.12

• Resolute Mining (RSG) retained at outperform at Macquarie; Price Target: $0.60

• Siteminder (SDR) retained at buy at Citi; Price Target: $6.30

• Sandfire Resources (SFR)

  • Retained at overweight at Barrenjoey; Price Target: $9.00 from $8.60

  • Retained at buy at Canaccord Genuity; Price Target: $10.25 from $9.75

  • Retained at sell at Citi; Price Target: $7.90 from $7.30

  • Retained at neutral at Jarden; Price Target: $6.80 from $6.50

  • Retained at outperform at Macquarie; Price Target: $10.50 from $9.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $8.40 from $7.65

  • Retained at accumulate at Ord Minnett; Price Target: $10.00 from $9.20

  • Retained at outperform at RBC Capital Markets; Price Target: $9.50

  • Retained at overweight at Wilsons; Price Target: $9.30

• The Star Entertainment Group (SGR) downgraded to outperform from neutral at Macquarie; Price Target: $0.50 from $0.70

• Strike Energy (STX) retained at neutral at Macquarie; Price Target: $0.22

• Syrah Resources (SYR) retained at outperform at Macquarie; Price Target: $0.90

• Tabcorp Holdings (TAH) retained at outperform at Macquarie; Price Target: $1.00

• Tamboran Resources Corporation (TBN) retained at outperform at Macquarie; Price Target: $0.40

• Telix Pharmaceuticals (TLX) downgraded to hold from buy at Bell Potter; Price Target: $14.50

• Task Group (TSK) retained at hold at Bell Potter; Price Target: $0.85

• Virgin Money UK LSE (VUK) retained at hold at Ord Minnett; Price Target: $4.25

• Westpac Banking Corporation (WBC) retained at underperform at Macquarie; Price Target: $26.00

Scans