Market Wraps

Evening Wrap: ASX 200 closes out bumper week, never better, as unrelenting lithium rally continues

Fri 15 Dec 23, 5:50pm (AEDT)

The S&P/ASX 200 closed 64.8 points higher, up 0.88%.

As good as it gets. On a total return basis, Aussie stocks have never closed at a better level. We are indeed the lucky country. We've got the good stuff the world wants, and will increasingly want if we are to achieve proposed 2050 carbon emissions reduction targets.

Copper and lithium are going to play a key role in the "transition away from fossil fuels" - which is now officially a thing as per COP28 final comments. Brokers were upgrading their forecasts for these and other metals today, helping resources companies to strong gains.

Let's dive in.


Today in Review

Fri 15 Dec 23, 5:03pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,442.7 +0.88%
All Ords 7,661.9 +0.82%
Small Ords 2,859.7 +0.52%
All Tech 2,616.3 +0.36%
Emerging Companies 1,941.9 +0.47%
Currency
AUD/USD 0.6703 +0.05%
US Futures
S&P 500 $4,726.25 +0.10%
Dow Jones $37,315.0 +0.13%
Nasdaq $16,560.25 +0.11%
Name Value % Chg
Sector
Materials 18,992.4 +1.94%
Energy 10,528.3 +1.86%
Consumer Discretionary 3,165.9 +0.79%
Financials 6,604.4 +0.68%
Industrials 6,748.8 +0.64%
Health Care 41,264.3 +0.30%
Consumer Staples 12,151.4 +0.25%
Communication Services 1,548.7 +0.23%
Information Technology 1,807.6 -0.08%
Utilities 8,026.6 -0.28%
Real Estate 3,319.2 -0.47%

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Markets

ASX 200 Session Chart

S&P ASX 200 (XJO) Intraday Chart 15 Dec 2023
Here comes Santa Claus...

The S&P/ASX200 (XJO) finished 64.8 points higher at 7,442.7, 0.88% from its session low and 0.26% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 171 to 101.

For the week, the XJO finished up a very tidy 248 points or 3.4% higher. This was the benchmark index's best week in 5 months, and it now sits just 190 points or 2.5% below its all-time high set on 13 August 2021 of 7,633.

But! And this is something you won't read in any other Evening Wrap (I challenge you!), if you add back dividends, on a total return basis the Australian stock market closed at a record high today. It has never been this good for Aussie investors.

ASX All Ordinaries Total Return Index
On a total return basis the Australian stock market closed at a record high today

Resources stocks dominated proceedings today. Basically, if your stock is involved in digging something out of the ground there's a very good chance it was up. The S&P/ASX 200 Materials Sector (XMJ) +1.9% and S&P/ASX 200 Energy Sector (XEJ) +1.9% were the best performing sectors in response to rising base metals and energy prices.

There's been plenty of attention on copper since the closing statement at the COP28 climate change conference specifically mentioned "transitioning away from fossil fuels". I discussed in an article yesterday how this may have impacted lithium prices, but the price of has copper also got a big boost from the announcement.

Major broker Citi released a research report today which noted commitments made at COP28 would be "massively bullish for metals demand (particularly copper)". According to Citi, increased demand for copper could create a "pathway to our bull case $15k/t average copper price scenario for 2025".

LME Copper chart
The price of copper got a big boost from COP28

To put this call into perspective, check out the chart above of London Metals Exchange copper. It popped just over 3% Thursday to around US$8,461/t. That's a long way from Citi's bullish US$15,000/t call!

From a technical perspective, it's still a very neutral looking chart for me. But I do note the short term trend ribbon is swinging back to up, and the price is once again above the long term trend ribbon - both major positives. I can't see any reason why the copper price can't keep moving higher in the near term, and a close above US$8,721/t would be particularly bullish.

Company

Last Price

Change $

Change %

1mo %

1yr %

Chalice Mining (CHN)

$1.755

+$0.15

+9.3%

+10.4%

-73.2%

IGO (IGO)

$8.88

+$0.51

+6.1%

+0.3%

-39.7%

Lynas Rare Earths (LYC)

$6.65

+$0.28

+4.4%

-3.6%

-19.2%

Beach Energy (BPT)

$1.560

+$0.065

+4.3%

+2.6%

-2.8%

Karoon Energy (KAR)

$1.975

+$0.065

+3.4%

-7.2%

-8.1%

Santos (STO)

$7.75

+$0.24

+3.2%

+9.8%

+9.2%

Viva Energy Group (VEA)

$3.41

+$0.09

+2.7%

+14.0%

+31.2%

Deep Yellow (DYL)

$0.985

+$0.025

+2.6%

-9.6%

+38.7%

South32 (S32)

$3.24

+$0.08

+2.5%

+2.2%

-20.2%

BHP Group (BHP)

$49.41

+$1.16

+2.4%

+6.1%

+7.2%

Boss Energy (BOE)

$4.02

+$0.09

+2.3%

-7.4%

+87.9%

Rio Tinto (RIO)

$132.86

+$2.82

+2.2%

+6.1%

+16.4%

Healthy gains today among mining and energy stocks

Doing it tough today was the Real Estate Investment Trusts (XPJ) -0.6% which had such a good week prior to today (up 5.1%) one could put this move down to a touch of profit taking heading into the weekend. Property stocks are back to their best levels since February.

Company

Last Price

Change $

1wk %

1mo %

1yr %

Charter Hall Group (CHC)

$12.24

-$0.1

+12.3%

+11.1%

-5.6%

HMC Capital (HMC)

$6.07

+$0.51

+11.0%

+21.4%

+34.9%

Lendlease Group (LLC)

$7.51

+$0.15

+9.3%

+12.1%

+2.0%

Lifestyle Communities (LIC)

$18.80

-$0.3

+8.7%

+5.2%

-3.4%

Vicinity Centres (VCX)

$2.07

+$0.02

+7.8%

+12.5%

+4.8%

Stockland (SGP)

$4.51

+$0.07

+7.6%

+12.2%

+16.8%

GPT Group (GPT)

$4.63

-$0.02

+6.9%

+12.4%

+6.4%

Scentre Group (SCG)

$2.96

+$0.03

+6.1%

+11.7%

+1.0%

Dexus (DXS)

$7.70

-$0.24

+5.6%

+7.4%

-4.5%

Unibail-Rodamco-Westfield (URW)

$5.39

+$0.15

+5.3%

+21.4%

+35.1%

Goodman Group (GMG)

$24.12

-$0.43

+4.0%

+2.8%

+31.7%

Real estate stocks were generally down today, but many had fantastic weeks

I know you've been reading my articles on whether we've seen a low in lithium prices, and would be all over the reasons behind the stunning recovery in ASX lithium stocks. They were again on top of the pile today, with honourable mentions for Core Lithium (ASX: CXO) +15%, Piedmont Lithium (ASX: PLL) +12.3%, and IGO (ASX: IGO) +6.1%.

Company

Last Price

Change $

Change %

1mo %

1yr %

Core Lithium (CXO)

$0.305

+$0.04

+15.1%

-16.4%

-73.7%

Piedmont Lithium Inc (PLL)

$0.455

+$0.05

+12.3%

+1.1%

-45.2%

IGO (IGO)

$8.88

+$0.51

+6.1%

+0.3%

-39.7%

Liontown Resources (LTR)

$1.450

+$0.075

+5.5%

-1.4%

-25.1%

Wildcat Resources (WC8)

$0.750

+$0.03

+4.2%

-6.3%

+2400.0%

Allkem (AKE)

$10.47

+$0.41

+4.1%

+15.7%

-19.6%

Pilbara Minerals (PLS)

$3.92

+$0.13

+3.4%

+9.8%

-13.3%

Mineral Resources (MIN)

$66.78

+$1.38

+2.1%

+6.7%

-21.4%

Short covering, bottom fishing, long term positional buying, does it really matter? Lithium stocks are back!

Economy

Data dump confirms Chinese economy struggling

It’s called the China “data dump”, i.e. the monthly release of Industrial Production, Retail Sales, Fixed Asset Investment, and Unemployment Rate. Some good news, and some bad news. Industrial production was a hit, up 6.6% p.a. to November versus October’s 4.6% p.a., and ahead of the 5.7% p.a. forecast by economists. Some of this could be explained by base effects, though, as it was this time last year Chinese factories were largely closed due to the harsh COVID-19 restrictions.

The rest of the data was roughly in line with the prevailing consensus that the Chinese economy is really struggling right now. Retail sales were up 10.1%, but weaker than the 12.6% p.a. gain forecast by economists, and Fixed Asset Investment was flat at 2.9% p.a. vs 3% p.a. expected. The unemployment rate was steady at 5% p.a.

What to watch out for...

In the USA, at 12:30am AEDT the Empire State Manufacturing Index is forecast to drop to 2.0 in November from October’s 9.0, then at 1:45am AEDT we’ll get the “flash” or the earliest estimates of Manufacturing and Services PMI’s. The Manufacturing PMI is expected to be 49.5 for this month compared to last month’s 49.4, and the Services PMI is expected to be 50.7 versus 50.8.


Latest News


Interesting Movers

Trading higher

  • +17.8% Zip Co. (ZIP) - No news, recent broker price target upgrades, building techincal rally

  • +15.1% Core Lithium (CXO) - Broad-based ASX lithium sector strength, stabilising lithium carbonate price

  • +14.8% Weebit Nano (WBT) - No news, WBT doesn't need a reason to be on this list! Decent technical bounce.

  • +12.3% Piedmont Lithium Inc (PLL) - Broad-based ASX lithium sector strength, stabilising lithium carbonate price

  • +9.3% Chalice Mining (CHN) - Rare earths got some of the lithium sector love

  • +9.2% HMC Capital (HMC) - Broad-based property sector rally on falling long term bond yields

  • +8.6% Adbri (ABC) - Kwinana Upgrade Project and Trading Update

  • +6.1% IGO (IGO) - Broad-based ASX lithium sector strength, stabilising lithium carbonate price

  • +5.7% Reliance Worldwide Corporation (RWC) - No news, stocks exposed to US economy stronger this week on falling long term US rates

  • +5.5% Maas Group Holdings (MGH) - Proposed extension of share buyback

  • +5.5% Liontown Resources (LTR) - Broad-based ASX lithium sector strength, stabilising lithium carbonate price

Trading lower

  • -10.4% APM Human Services International (APM) - No news, check out the trend on the chart, par for the course

  • -10.2% Telix Pharmaceuticals (TLX) - No news

  • -9.7% Cromwell Property Group (CMW) - No news

  • -7.0% Red 5 (RED) - Becoming a substantial holder

  • -6.7% Sigma Healthcare (SIG) - Continued pullback after Chemist Warehouse pop

  • -5.5% Cettire (CTT) - No news, short term techincal trend under pressure

  • -5.1% Megaport (MP1) - No news, short term techincal trend under pressure


Broker Notes

  • AGL Energy (AGL) retained at outperform Macquarie; Price Target: $10.89 from $11.51

  • Auckland International Airport (AIA) retained at outperform Macquarie; Price Target: $9.56

  • Allkem (AKE) upgraded to overweight from neutral at Jarden; Price Target: $11.40 from $12.00

  • Alumina (AWC)

    • Upgraded to overweight from neutral at Barrenjoey; Price Target: $1.10

    • Retained at neutral Macquarie; Price Target: $0.80

  • Boss Energy (BOE) upgraded to buy from hold at Jefferies; Price Target: $5.20 from $5.10

  • Cobram Estate Olives (CBO) retained at buy Ord Minnett; Price Target: $1.82 from $1.61

  • CQG Partners (GQG) retained at buy Ord Minnett; Price Target: $2.20 from $2.15

  • Mach7 Technologies (M7T) initiated at overweight JP Morgan; Price Target: $1.05

  • Medibank Private (MPL) retained at neutral Macquarie; Price Target: $3.75

  • NIB Holdings (NHF) retained at neutral Macquarie; Price Target: $7.70

  • Orora (ORA)

    • Upgraded to positive from neutral at E&P; Price Target: $3.00

    • Retained at outperform Macquarie; Price Target: $3.30

    • Retained at overweight Morgan Stanley; Price Target: $3.50

  • Origin Energy (ORG) retained at outperform Macquarie; Price Target: $9.26 from $9.39

  • Pro Medicus (PME) initiated at overweight JP Morgan; Price Target: $100.00

  • Seek (SEK) retained at lighten Ord Minnett; Price Target: $19.00

  • Sigma Healthcare (SIG) downgraded to hold from buy at Shaw and Partners; Price Target: $0.90

  • Viva Energy Group (VEA) retained at equalweight Morgan Stanley; Price Target: $3.21

  • Volpara Health Technologies (VHT) downgraded to hold from buy at Bell Potter; Price Target: $1.15 from $0.85

  • Zip Co. (ZIP) retained at neutral Citi; Price Target: $0.51


Scans

Top Gainers

Code Company Last % Chg
CF1 Complii Fintech S... $0.028 +40.00%
NXS Next Science Ltd $0.28 +30.23%
CRS Caprice Resources... $0.027 +28.57%
FRX Flexiroam Ltd $0.028 +27.27%
GUE Global Uranium an... $0.115 +26.37%
View all top gainers

Top Fallers

Code Company Last % Chg
HMD Heramed Ltd $0.02 -33.33%
T88 Taiton Resources Ltd $0.095 -26.92%
IVZ Invictus Energy Ltd $0.16 -21.95%
MTM MTM Critical Meta... $0.021 -19.23%
AXN Alliance Nickel Ltd $0.039 -17.02%
View all top fallers

52 Week Highs

Code Company Last % Chg
CXU Cauldron Energy Ltd $0.025 +19.05%
AUE Aurum Resources Ltd $0.275 +10.00%
HMC HMC Capital Ltd $6.07 +9.17%
G11 G11 Resources Ltd $0.027 +8.00%
PNC Pioneer Credit Ltd $0.43 +7.50%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
HMD Heramed Ltd $0.02 -33.33%
T88 Taiton Resources Ltd $0.095 -26.92%
AXN Alliance Nickel Ltd $0.039 -17.02%
5EA 5E Advanced Mater... $0.21 -16.00%
SHP South HARZ Potash... $0.024 -14.29%
View all 52 week lows

Near Highs

Code Company Last % Chg
SLR Silver Lake Resou... $1.18 +1.72%
PCI Perpetual Credit ... $1.095 +2.34%
WVOL Ishares Edge MSCI... $36.67 -0.68%
GCI Gryphon Capital I... $2.03 0.00%
VVLU Vanguard Global V... $66.45 +1.95%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
CD2 CD Private Equity... $1.10 -0.90%
TLG Talga Group Ltd $0.76 -3.80%
NHE Noble Helium Ltd $0.115 -11.54%
BBOZ Betashares Austra... $3.19 -1.85%
5EA 5E Advanced Mater... $0.21 -16.00%
View all RSI oversold

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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