Market Wraps

Evening Wrap: ASX 200 falls, QBE profits lift, lithium and coal stocks smashed

Fri 17 Feb 23, 4:47pm (AEST)

The S&P/ASX 200 closed 64 points lower, down -0.86%.

The local sharemarket finishes the week down -1.17%, technology stocks tumble amid a risk-off session on Wall Street, RBA Governor Lowe sticks to his hawkish script about future rate hikes, bond yields are back near recent highs and a whole heap of broker notes.

Let's dive in.

Today in Review

Fri 17 Feb 23, 4:23pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,346.8 -0.86%
All Ords 7,552.2 -0.90%
Small Ords 2,897.9 -1.19%
All Tech 2,198.2 -2.10%
Emerging Companies 2,181.4 -0.85%
AUD/USD 0.6844 -0.50%
US Futures
S&P 500 $4,081.25 -0.45%
Dow Jones $33,645.0 -0.28%
Nasdaq $12,404.75 -0.62%
Name Value % Chg
Utilities 7,859.0 +1.04%
Consumer Staples 13,383.3 +0.33%
Industrials 6,584.4 -0.66%
Materials 18,635.6 -0.68%
Financials 6,456.0 -0.76%
Communication Services 1,518.6 -0.82%
Consumer Discretionary 3,038.7 -0.97%
Health Care 43,220.5 -0.98%
Real Estate 3,230.7 -1.74%
Energy 10,739.0 -1.78%
Information Technology 1,474.3 -2.29%

Enjoying the Evening Wrap? Sign up to get it sent directly to your inbox after every trading day.


A rather odd week for markets: -0.21% on Monday, 0.18% on Tuesday, -1.06% on Wednesday and 0.8% on Thursday. Basically a bunch of sessions that cancelled each other out. Then there's Friday.

  • Technology tumbled, although this was in-line with Nasdaq falling -1.8%

  • Real Estate struggled against higher bond yields and a pullback from Goodman Group after the stock rallied on better-than-expected earnings on Thursday

  • Energy faced weakness from both oil and coal stocks. Oil prices are down for a fifth consecutive session to US$77.6 a barrel


RBA Lowe speaks at a second parliamentary economics committee this week. Highlights include:

  • Fixed rate cliff to come: "In total there are around 880,000 loan facilities with fixed rates maturing this year. These loan facilities have an outstanding value of around $350 billion."

  • More hikes to come: "Based on the currently available information, the board expect that further increases will be needed over the months ahead to ensure that inflation returns to target." 

  • Bring it down at all costs: "So right at the moment there has to be the priority to get inflation back down and have a credible path to getting it back down because if we don't do that, unemployment is high and interest rates are higher and those gains that we have had in the labour market in the last couple of years, we lose."

Latest news

Market Insights

Yields, yields and yields

When bond yields were surging, everyone was talking about yields. Likewise when they topped late last year. But now, no one seems to care.

Except they've V-shaped back towards November highs.

I noted this in Friday's Morning Wrap from JPMorgan's Kolanvic, but it's worth a second mention: "Based on historical regressions, the move in 2 year interest rates since the Fed meeting should result in a 5-10% selloff in Nasdaq, which is actually up ~3% since ... this divergence cannot go much further, in our view, and may revert."

For the uninitiated, the 2-year yield is often used as a barometer for short-term interest rate expectations and there's plenty of reasons as to why the 2 year trending so strongly:

  • US inflation print on Wednesday was hotter-than-expected

  • US producer price report on Thursday was hotter-than-expected

  • Fed speakers reiterate the higher for longer narrative and suggest rates should go above 5.0%

US02Y 2023-02-17 16-15-05
US 2-year Treasury yield

Weekend food for thought

Market breadth: On Thursday, I talked about a simple stock scan I run that uses two filters a) the stock must be above its 200-day and b) share price above 10 cents. The number of stocks appearing in that scan has been progressively falling from 341 at the start of Feb, 311 a week ago, 253 on Wednesday and now 251. Why is this important? Because it goes to show the underlying health of the market and how stocks are holding up. As the scan suggests, stocks are beginning to falter and dip below key moving averages.

Lithium: The lithium sector is in a pretty rough place. It's struggling to hold after staging a big comeback in late January. Interestingly, a lot of big names are now amongst the top 10 most shorted stocks on the ASX. This includes Core Lithium, Sayona Mining, Liontown Resources and Lake Resources. Not a good look.

CBA: Hopefully the last time we talk about CBA. It's down for a third straight session, down a collective 7.6%. Even on the third day, the volume remains aggressive, coming in at 3.99m compared to 20-day average of 2.4m. Its sitting just above the key $100 handle, so can the dust soon settle? That aside, and thinking out loud, could there be a rotation taking place away from banks and into other defensives, that have reported better-than-expected earnings like Telstra and Wesfarmers?

Interesting news and movers

Trading higher

  • +7.4% QBE Insurance (QBE) – FY results

  • +6.3% A2 Milk (A2M) – Synlait SAMR audit update

  • +4.5% GUD Holdings (GUD) – Continuation rally, up ~17% in last three

  • +4.5% Synlait Milk (SM1) – SAMR audit update

  • +2.6% Pact Group (PGH) – Continuation rally, up ~14% in last three

  • +2.4% Graincorp (GNC) – FY guidance (Thurs)

Trading lower 

  • -15% Integral Diagnostics (IDX) – Reports 1H earnings

  • -13.8% PWR Holdings (PWH) – Reports 1H earnings

  • -7.8% Block (SQ2) – ASIC plan to regulate BNPL

  • -5.8% Centuria Industrial (CIP) – Notes priced at 3.95%

  • -2.9% Magellan Financial (MFG) – 1H earnings (Thurs)

  • -2.5% Zip (ZIP) – ASIC plan to regulate BNPL

  • Coal sector move: New Hope (-5.8%), Whitehaven Coal (-5.2%), Terracom (-3.9%)

  • Lithium sector move: Pilbara Minerals (-5.3%), Leo Lithium (-5.0%), Lake Resources (-3.8%), Allkem (-3.7%), Core Lithium (-3.5%)

Broker updates 

UBS takes on Friday’s earnings:

QBE Insurance (QBE): Buy with $17.00 target price 

  • “Earnings and dividend well ahead of consensus. Reasonable guidance broadly in line with consensus, and new external reserving contract should provide comfort.”

Westpac (WBC): Buy with $27.00 target price 

  • “Limited details but capital, and asset quality look okay. Credit impairments in line.”

  • “Westpac is trading at only 1.1x price/book value, which is -1st deviation below its historical long-term average”

Macquarie notes regarding recent results:

AUB Group (AUB): Outperform with $28.26 target price

  • AUB 1H23 results were ahead of expectations and it upgrade its FY23 guidance for a second time (prev upgrade in mid-Dec 2022)

Bapcor (BAP): Outperform with $8.40 target price

  • 1H23 result was largely in-line with expectations. Supply chain improvements are beginning to show and full-year guidance was solid, noting slight improvements in the second half.

  • Valuation remains attractive as it trades at 11x FY24e EV/EBIT relative to US peers trading at ~15x

Goodman Group (GMG): Outperform with $22.61 target price

  • FY23 EPS guidance was upgraded to 13.5% growth from 11%. Macquarie notes the company has a track record of upgrading earnings  

  • “Fears that the 1Q23 update showed a softening trend in development metrics were overdone, with material improvement in 2Q.”

  • “With GMG taking advantage of more limited competition in the market, the group is setting itself up for the next cycle.”

Graincorp (GNC): Outperform with $10.80 target price

  • FY23 EBITDA guidance of $470-530m is ahead of MacQ expectations of $434m

  • “Earnings upgrade story continues” although “we are however past peak conditions expected in FY22.”

  • “Global demand for Australian grain and oilseeds remains strong, albeit we have seen some production improvement in other global grain growing regions.”

Sonic Healthcare (SHL): Underperform with $31.50 target price

  • 1H23 was slightly ahead of expectations but in-line with consensus

  • Underperform rating was mainly due to valuations and recent peer guidance (Synlab, Quest), which imply year-on-year declines for revenue and earnings

Whitehaven Coal (WHC): Outperform with $12.00 target price

  • 1H23 revenue and EBITDA beat but dividend was 33% weaker than forecasts

  • “Thermal coal prices have retreated but FCF yields remain above 25% at spot. The resumption of the buy-back is a key near-term catalyst.”


Top Gainers

Code Company Last % Chg
MEG Megado Minerals Ltd $0.058 +34.88%
AHQ Allegiance Coal Ltd $0.014 +27.27%
RVS Revasum Inc $0.30 +25.00%
RMY Rma Global Ltd $0.135 +22.73%
LDX Lumos Diagnostics... $0.044 +22.22%
View all top gainers

Top Fallers

Code Company Last % Chg
MRI My Rewards Intern... $0.03 -21.05%
MFB My Food Bag Group... $0.29 -19.44%
PYR Payright Ltd $0.048 -18.64%
LMLND Lincoln Minerals Ltd $0.019 -17.39%
HCT Holista Colltech Ltd $0.015 -16.67%
View all top fallers

52 Week Highs

Code Company Last % Chg
PFG Prime Financial G... $0.265 +8.16%
QBE QBE Insurance Gro... $14.30 +6.72%
ECG Ecargo Holdings Ltd $0.035 +6.06%
XCO2 Vaneck Global Car... $22.94 +4.42%
PLL Piedmont Lithium Inc $1.07 +3.38%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
MFB My Food Bag Group... $0.29 -19.44%
HCT Holista Colltech Ltd $0.015 -16.67%
AMT Allegra Orthopaed... $0.06 -14.29%
LAW Lawfinance Ltd $0.035 -12.50%
VRX VRX Silica Ltd $0.105 -12.50%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.50 -0.85%
OZBD Betashares Austra... $43.91 -0.54%
AN3PI Australia and New... $102.32 -0.18%
PCI Perpetual Credit ... $1.005 0.00%
WVOL Ishares Edge MSCI... $34.61 +0.03%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
DDR Dicker Data Ltd $8.58 -1.94%
AKP Audio Pixels Hold... $7.20 +2.13%
ETPMPM Global X Metal Se... $189.24 -0.01%
CEL Challenger Explor... $0.14 0.00%
ARL Ardea Resources Ltd $0.64 0.00%
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.

Get the latest news and insights direct to your inbox

Subscribe free

Get free post-market insights with our Evening Wrap

Create an account to receive our concise, data-driven post-market recap, sent directly to your inbox, every day.

Along with the Evening Wrap, you'll join 100k+ investors who receive our Morning Wrap and Weekend Newsletter.