Evening Wrap: ASX 200 dumped on global growth fears, nothing spared in resources and energy sectors

A combination cooling sentiment in certain hot tech thematics in the US, plus renewed concerns regarding global economic growth, dragged Australian stocks lower today.

More specifically, those "global economic growth concerns" dragged commodity prices lower, which then dragged key Australian Resources and Energy stocks lower today.

It's not pretty. But if you do want to see just how bad things were today...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 152.7 points lower at 7,950.5, 1.92% from its session high and just 0.28% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a dismal 58 to 224.

All 11 of the major ASX sectors finished in the red today. The least worst was Industrials (XNJ) (“only” down 0.64%) and Health Care (XHJ) (“only” down 1.0%!).

It was a sliding scale of awful from there, culminating in the almighty most awfulness in (guess, go on…) Energy (XEJ) (-3.0%) and Resources (XJR) (-3.2%). Within Resources, the Gold (XGD) sub-index took out the unofficial worst sector performance with a 4.0% hiding.

We discussed this exactly this time last month – when the sky was falling last time. Bad news on the global economy is bad news again, and markets are worried about an impending global slowdown. This explains why commodity prices, almost across the board, were belted last night. It also explains the abovementioned performance.

US 10 Year T-Bond yields

Also note US 10 Year T-Bond yields fell overnight indicating markets are factoring in lower long term rates – one of the driving causes of such a move is likely the believe the global economy is about to slow markedly.

Now, I could show you tables of the worst performing stocks, but that would be a little depressing – so I won’t. If you do want to know how bad some stocks went today, see the Interesting Moves section below.

Note in that section, there’s a bunch of “dittos” in the rationales for the falls – because really – there wasn’t any specific reason apart from “X commodity” was down over night, and/or “sentiment in X sector is cactus”.

On cacti-like sentiment in particular sectors, please do not take me writing “…that’s why it has been a regular in ChartWatch Scans Feature Downtrends” as being preachy know it all! I go to great effort each evening outside of work hours to do the scans and analysis so I can publish those lists for you before market-open every morning. I aim to highlight the best uptrends and downtrends as per my technical model – a model that has been honed over three decades of experience in the markets – everything from bull to bear and in between.

It is up to you what you do with that information, but I trust you are beginning to see the power of simply following the trend.

Be sure to check out my article today on September and October seasonality in the Australian share market. Talk about great timing! 🧐

ChartWatch

NASDAQ Composite Index

Black candles can be problematic...

The last time we covered Comp was in ChartWatch in the Evening Wrap on 28 August.

In that update, we noted that with the advent of the black-bodied supply-side candle on 22 August, the supply side had begun to challenge the strong rally from the long term uptrend ribbon.

Such a challenge is healthy I said, as it allows us to see how the demand-side responds. Not so healthy anymore, is it?

Last night’s long black candle and low close shows the supply side is very much still in the mix, and the demand side has clearly lost a degree of the will to fight. The peak formed at 18018 (not labelled to save clutter) now sits uncomfortably below 18129, and more importantly, below the all-time high of 18671 – which is increasingly looking like sitting on top of an impenetrable wall of latent supply above 18,000.

All is not lost. It’s still a bull market as long as the price continues to close above the long term uptrend ribbon, and to be fair, that long term uptrend ribbon still looks pretty healthy. Bull markets have a way of perpetuating themselves…

The most recent price action (falling peaks and falling troughs), and supply-side candles, tip the balance of probabilities toward another test of the August lows. If that low terminates in the top half of the long term uptrend ribbon – particularly with strong demand-side candles (i.e., white bodies and or downward pointing shadows) – then we’re likely still fine. It’s just a process we have to go through to prove to investors the bull market has more to go.

If the above does not occur, that is, if we find the comp below the long term uptrend ribbon – then something completely different is playing out. Let’s leave it there for now, because there’s no point looking too far into the future when one is incapable of knowing what tomorrow’s candle is going to be!

Economy

Today

• AUS September Qtr GDP

  • +0.2% vs +0.2% q/q forecast and +0.1% q/q in March (i.e., in line with expected and up from previous quarter)

• CHN Caixin Services PMI August

  • 51.6 vs 52.1 forecast and 52.1 in July (i.e., worse than expected and down on previous month)

Later this week

Thursday

• 00:00 USA JOLTS Job Openings August (8 million forecast vs 8.18 million in July)

• 12:00 AUS RBA Governor Michelle Bullock Speaks

Friday

• 00:00 USA ISM Services PMI August (50.9 forecast vs 51.4 in July)

• 22:30 USA Non-Farm Employment Change August (+164,000 forecast vs +114,000 in July) and Unemployment Rate (4.2% forecast vs 4.3% in July)

• 22:30 USA Average Hourly Earnings August (+0.3% forecast vs +0.2% in July)

Latest News

Interesting Movers

Trading higher

• +7.2% Orora (ORA) - ORA - Sale of North America Packaging Business.

• +5.8% Aussie Broadband (ABB) - Sale of remaining Superloop shareholding and Ceasing to be a substantial holder for SLC.

• +5.3% Appen (APX) - No news, bounce after sharp correction since 26 Aug, bounced off long term trend ribbon.

• +3.3% Nanosonics (NAN) - N, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈.

• +3.1% Hansen Technologies (HSN) - No news, upgraded to buy from neutral at Goldman Sachs, price target increased to $5.10 from $4.95.

• +2.8% Humm Group (HUM) - No news, rise is consistent with prevailing short and long term uptrends.

Trading lower

• -12.0% Cettire (CTT) - Founder and CEO Share Purchase

• -10.9% Spartan Resources (SPR) - No news, tough day for ASX gold stocks today, no major move in the gold price, just a deterioration in sentiment towards resources stocks generally on weaker global economic data.

• -9.5% Mount Gibson Iron (MGX) - No news, ditto Resources stocks, more generally though, it was a particularly tough day for ASX iron ore stocks on continued sharp falls in the iron ore price, fall is consistent with prevailing short and long term downtrends 🔎📉.

• -9.1% Bannerman Energy (BMN) - No news, ditto Resources, more generally though, it was a particularly tough day for ASX uranium stocks, no major move in uranium price—just continued deterioration of sentiment toward stocks in the sector. One thing is for sure: the fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -8.9% Firefly Metals (FFM) - No news, ditto Resources stocks, more generally though, it was a particularly tough day for ASX copper stocks on continued sharp falls in the copper price.

• -8.8% Deep Yellow (DYL) - No news, ditto uranium, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -8.7% De Grey Mining (DEG) - Fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends).

• -8.5% Fortescue (FMG) - Ex-dividend $0.89 fully franked, also probably quite a bit of ditto iron ore. Ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -7.5% Strike Energy (STX) - No news, ditto Energy stocks also suffered today on the back of a sharp fall in crude oil prices overnight, fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -7.3% Grange Resources (GRR) - No news, ditto iron ore, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -7.1% Paladin Energy (PDN) - No news, ditto uranium, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -6.7% Lotus Resources (LOT) - No news, ditto uranium, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -6.5% Nexgen Energy (NXG) - No news, ditto uranium, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -6.2% Develop Global (DVP) - No news, ditto Resources stocks, more generally though, it was a particularly tough day for ASX lithium stocks on continued falls in lithium minerals prices in China today. Fall is consistent with prevailing short and long term downtrends 🔎📉.

• -6.2% Pilbara Minerals (PLS) - No news, ditto lithium, fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -6.2% Karoon Energy (KAR) - No news, ditto Energy, fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends).

• -6.2% Liontown Resources (LTR) - No news, ditto lithium, fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -6.1% Arcadium Lithium (LTM) - No news, ditto lithium, fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -6.0% Whitehaven Coal (WHC) - Ex-dividend $0.13 fully franked.

• -6.0% Sandfire Resources (SFR) - No news, ditto copper.

• -5.7% Chalice Mining (CHN) - No news, ditto lithium/battery minerals, fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -5.6% Boss Energy (BOE) - No news, ditto uranium, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -5.6% Deterra Royalties (DRR) - No news, ditto iron ore, ditto fall is consistent with prevailing short and long term downtrends (and that's why it has been a regular in the ChartWatch Scans Feature Downtrends) 🔎📉.

• -5.6% 29METALS (29M) - No news, ditto copper.

Broker Notes

• Ampol (ALD)

  • Upgraded to buy from hold at Jefferies; Price Target: $33.00

• Eagers Automotive (APE)

  • Retained at buy at Bell Potter; Price Target: $13.00

• Australian Vanadium (AVL)

  • Retained at buy at Shaw and Partners; Price Target: $0.08

• American West Metals (AW1)

  • Retained at buy at Shaw and Partners; Price Target: $0.32

• BHP Group (BHP)

  • Retained at buy at Citi; Price Target: $46.00

  • Retained at accumulate at Ord Minnett; Price Target: $45.00

• Beach Energy (BPT)

  • Retained at neutral at Macquarie; Price Target: $1.30

• Brambles (BXB)

  • Retained at buy at UBS; Price Target: $19.10

• Champion Iron (CIA)

  • Retained at buy at Citi; Price Target: $7.20

• Cooper Energy (COE)

  • Retained at outperform at Macquarie; Price Target: $0.30

• Carnarvon Energy (CVN)

  • Retained at outperform at Macquarie; Price Target: $0.29

• Fineos Corporation (FCL)

  • Retained at neutral at Goldman Sachs; Price Target: $1.65 from $1.90

• Firefly Metals (FFM)

  • Retained at buy at Shaw and Partners; Price Target: $1.10

• Fortescue (FMG)

  • Retained at neutral at Citi; Price Target: $19.40

• Graincorp (GNC)

  • Retained at buy at Bell Potter; Price Target: $10.20 from $9.90

  • Downgraded to hold from add at Morgans; Price Target: $9.45 from $9.38

  • Retained at buy at Ord Minnett; Price Target: $10.05 from $9.95

  • Retained at buy at UBS; Price Target: $9.80

• Genetic Signatures (GSS)

  • Retained at buy at Bell Potter; Price Target: $1.10

• Gentrack Group (GTK)

  • Retained at buy at Goldman Sachs; Price Target: NZ$11.75 from NZ$11.50

• Hansen Technologies (HSN)

  • Upgraded to buy from neutral at Goldman Sachs; Price Target: $5.10 from $4.95

• Insurance Australia Group (IAG)

  • Retained at outperform at Macquarie; Price Target: $8.00

• Imexhs (IME)

  • Retained at buy at Morgans; Price Target: $1.15 from $1.50

• Incitec Pivot (IPL)

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.00

• Jumbo Interactive (JIN)

  • Downgraded to neutral from outperform at Macquarie; Price Target: $14.75 from $17.45

• Karoon Energy (KAR)

  • Retained at outperform at Macquarie; Price Target: $2.15 from $2.35

• Lunnon Metals (LM8)

  • Initiated at buy at Shaw and Partners; Price Target: $0.60

• Lotus Resources (LOT)

  • Retained at buy at Bell Potter; Price Target: $0.70 from $0.65

  • Retained at buy at Shaw and Partners; Price Target: $0.72

• Michael Hill International (MHJ)

  • Retained at neutral at E&P; Price Target: $0.70

  • Retained at overweight at Jarden; Price Target: NZ$0.78 from NZ$0.72

• Mineral Resources (MIN)

  • Downgraded to hold from add at Morgans; Price Target: $39.00 from $53.00

• Motorcycle (MTO)

  • Retained at buy at Moelis Australia; Price Target: $2.37 from $1.97

  • Retained at marketweight at Wilsons; Price Target: $1.47 from $1.59

• Northern Star Resources (NST)

  • Initiated at buy at Bell Potter; Price Target: $17.50

• Orora (ORA)

  • Retained at neutral at Citi; Price Target: $2.55

• QBE Insurance Group (QBE)

  • Retained at neutral at Macquarie; Price Target: $16.90

• Radiopharm Theranostics (RAD)

  • Retained at buy at Bell Potter; Price Target: $0.07 from $0.25

• Rio Tinto (RIO)

  • Retained at neutral at Citi; Price Target: $123.00

• Resolute Mining (RSG)

  • Retained at lighten at Ord Minnett; Price Target: $0.55

• Supply Network (SNL)

  • Retained at buy at Goldman Sachs; Price Target: $30.50 from $27.40

• Strike Energy (STX)

  • Retained at neutral at Macquarie; Price Target: $0.23 from $0.22

• Suncorp Group (SUN)

  • Retained at neutral at Macquarie; Price Target: $17.00

• Seven Group (SVW)

  • Retained at buy at Goldman Sachs; Price Target: $45.90 from $43.90

• Tamboran Resources Corporation (TBN)

  • Retained at outperform at Macquarie; Price Target: $0.30

• West African Resources (WAF)

  • Initiated at buy at Canaccord Genuity; Price Target: $3.15

• Wesfarmers (WES)

  • Retained at sell at UBS; Price Target: $66.00

• Waypoint Reit (WPR)

  • Retained at hold at Morgans; Price Target: $2.66 from $2.49

Scans