Market Wraps

Evening Wrap: ASX 200 eases from session highs ahead of US inflation data

Tue 13 Dec 22, 4:55pm (AEST)

The S&P/ASX 200 closed 23 points higher, up 0.31%.

The local sharemarket struggled to hold onto a strong open ahead of US inflation data, Australian consumer sentiment bounced from record lows in December but business confidence deteriorated.

Let's dive in.


Today in Review

Tue 13 Dec 22, 4:37pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,203.3 +0.31%
All Ords 7,389.2 +0.25%
Small Ords 2,852.9 +0.39%
All Tech 2,090.6 +1.17%
Emerging Companies 2,112.9 -0.44%
Currency
AUD/USD 0.6757 +0.16%
US Futures
S&P 500 $3,990.25 -0.04%
Dow Jones $34,022.0 +0.01%
Nasdaq $11,701.5 -0.09%
Name Value % Chg
Sector
Information Technology 1,458.3 +1.70%
Industrials 6,483.1 +1.55%
Financials 6,496.6 +1.42%
Utilities 8,113.3 +1.00%
Consumer Discretionary 2,891.4 +0.74%
Communication Services 1,451.3 +0.73%
Real Estate 3,097.8 +0.42%
Energy 10,919.0 +0.23%
Consumer Staples 12,674.6 +0.02%
Health Care 42,648.5 +0.01%
Materials 17,881.6 -1.40%

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MARKETS

The ASX 200 sold off from session highs of 0.66%. The market seemed reluctant to hold onto the strong open ahead of the US inflation print on Wednesday, 12:30 am AEDT.

  • Tech led to the upside, with names like WiseTech Global and Xero up more than 2%

  • Financials pushed the index higher thanks to a positive trading update from Bendigo Bank. The big four banks closed between 0.7% and 1.7% higher

  • Materials extended its pullback, now on a two-day losing streak, down -2.95%

ECONOMY

Australian consumer sentiment rose 3% to 80.3 in December from 78.0 in November.

  • "Despite this welcome lift the level of the Index remains comparable with the lows seen during the COVID pandemic and the Global Financial Crisis." - Westpac Economics

  • "Despite this welcome lift the level of the Index remains comparable with the lows seen during the COVID pandemic and the Global Financial Crisis." - Westpac Economics

Australian business confidence was -4 in December from 0 in November.

  • Fell below zero for the first time since December 2021

  • "Conditions remain strong across industries with only construction and finance, business & property below +20pts in trend terms, and conditions have also held up across the states." - NAB Economics

  • "Overall, the survey highlights a growing concern that the economy’s strength over 2022 is set to come to an end as we enter 2023, and forward orders have softened from +14 in September to +5 in November." - NAB Economics

COMMODITIES

“A risk-off tone across markets saw commodities come under pressure. Surging COVID-19 cases in China weighed on sentiment. A stronger USD added to the headwinds,” said ANZ senior commodity analyst, Daniel Hynes. 

  • Brent crude +1.0% to US$78.85 a barrel

  • Iron ore futures fell -2.3% to US$106.95 a tonne


Latest news


Post market brief

The ASX 200 sold off from session highs, some understandable de-risking ahead of a rather binary catalyst.

xjo
XJO chart (Source: TradingView)

I took a closer look at the inflation print, talking about various things including S&P 500's previous reactions, gasoline prices, rents and JPMorgan's game plan.

The game plan was rather interesting, so I'll drop the table below.

November CPI reading

Probability

S&P 500 reaction

7.8% or higher

5%

Down 4.5% to 5.0%

7.5% to 7.7%

25%

Down 2.5% to 3.5%

7.2% to 7.4%

50%

Up 2% to 3%

7.0% to 7.2%

15%

Up 4% to 5%

6.9% or lower

5%

Up 8% to 10%

Source: JPMorgan, Bloomberg | Table: Market Index

Note that the S&P 500 rallied 5.5% after inflation came in cooler-than-expected at 7.7% last month compared to analyst expectations of 8.0%.

We're in a market that's so desperate to rally off good news yet to vulnerable to anything that isn't. Expectations are key and the consensus is for inflation to cool to 7.3%.


Major announcements

Large caps (>$1bn)

  • Bendigo Bank (BEN) +6.9%: Posted 22% growth in cash earnings for the five months ending 30 November. The bank said “NIM tailwinds expected to continue into the second half of FY23.” 

  • CSL (CSL) -0.4%: Appointed Dr Paul McKenzie as CEO from 6 March 2023. Dr McKenzie has been CSL’s Chief Operating Officer since 2019 

  • Chalice Mining (CHN) -8.1%: Extended its scoping study to allow for new metallurgical testwork results   

Mid-to-small caps

  • G8 Education (GEM) +2.5%: Reported YTD 30 November EBIT of $71m and NPAT of $41m compared to a respective $75m and $43m a year ago   

  • Galan Lithium (GLN) -0.8%: Executed a binding term sheet to acquire its remaining 20% interest in the Greenbushes South tenements from Lithium Australia

  • Zip (ZIP) -10.5%: Completed a convertible notes offer at around 23 cents for the dollar. The company said this will reduce its cash liability under its existing notes payable by $76.6m   

Capital raisings

  • Mincor (MCR) -4.4%: Successfully raised $55m at $1.39 per share, representing a 12.3% discount to its pre-raise close  


Broker updates 

Ticker

Company

Broker

Rating

Target price

BGL

Bellevue Gold

Macquarie

Outperform

$1.40 from $1.20

COH

Cochlear

Morgan Stanley

Underweight

$190

CSL

CSL

Morgan Stanley

Overweight

$337 from $327

FPH

Fisher & Paykel

Morgan Stanley

Equal-weight from Overweight

$21.50

SBM

St. Barbara

Credit Suisse

Neutral

$1.25 from $0.55

SHL

Sonic Healthcare

Morgan Stanley

Overweight

$35.05 from $38.60

TYR

Tyro Payments

Ord Minnett

Buy

$1.60


Scans

Top Gainers

Code Company Last % Chg
DOC Doctor Care Anywh... $0.07 +37.26%
FZR Fitzroy River Cor... $0.16 +33.33%
PO3 Purifloh Ltd $0.30 +33.33%
SNX Sierra Nevada Gol... $0.29 +31.82%
KKO Kinetiko Energy Ltd $0.13 +23.81%
View all top gainers

Top Fallers

Code Company Last % Chg
OAK Oakridge Internat... $0.09 -35.71%
GSN Great Southern Mi... $0.03 -25.00%
STM Sunstone Metals Ltd $0.035 -23.91%
PGD Peregrine Gold Ltd $0.30 -21.05%
BLY Boart Longyear Gr... $1.72 -17.31%
View all top fallers

52 Week Highs

Code Company Last % Chg
GLE GLG Corp Ltd $0.495 +5.32%
MTC Metalstech Ltd $0.445 +4.71%
RCT Reef Casino Trust $3.31 +3.76%
ATOM Global X Uranium ETF $9.84 +1.97%
CNU Chorus Ltd $7.81 +1.83%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
PGD Peregrine Gold Ltd $0.30 -21.05%
BLY Boart Longyear Gr... $1.72 -17.31%
MKR Manuka Resources Ltd $0.096 -16.52%
NGS Nutritional Growt... $0.042 -16.00%
PGM Platina Resources... $0.017 -15.00%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.46 0.00%
OZBD Betashares Austra... $44.66 -0.16%
PCI Perpetual Credit ... $0.985 0.00%
WVOL Ishares Edge MSCI... $35.78 +1.53%
NUF Nufarm Ltd $6.14 -0.97%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
NVX Novonix Ltd $1.82 +2.54%
LPM Lithium Plus Mine... $0.41 -6.82%
KGL KGL Resources Ltd $0.23 +4.55%
DUN Dundas Minerals Ltd $0.19 0.00%
QPM Queensland Pacifi... $0.105 -4.55%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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