Market Wraps

Evening Wrap: ASX 200 falls, unemployment holds near 50-year low of 3.5%, RBA rate hike on the cards

Thu 13 Apr 23, 5:08pm (AEST)

 The S&P/ASX 200 closed 20 points lower, down -0.27%. 

The local sharemarket eases after a two-day rally, technology stocks surprisingly hold up relatively well despite the Nasdaq underperforming overnight, Australia's unemployment rate remains near record lows, Chinese exports jump in March and why the RBA could hike by 50 bps.

Let's dive in.


Today in Review

Thu 13 Apr 23, 4:19pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,324.1 -0.27%
All Ords 7,520.7 -0.24%
Small Ords 2,908.5 +0.43%
All Tech 2,276.7 +0.35%
Emerging Companies 2,135.3 -0.33%
Currency
AUD/USD 0.6702 +0.17%
US Futures
S&P 500 $4,123.25 +0.10%
Dow Jones $33,825.0 +0.04%
Nasdaq $12,973.75 +0.17%
Name Value % Chg
Sector
Information Technology 1,572.9 +0.99%
Energy 10,860.8 +0.88%
Real Estate 3,078.1 +0.54%
Communication Services 1,544.9 -0.10%
Industrials 6,778.2 -0.11%
Financials 6,238.4 -0.29%
Health Care 44,525.0 -0.40%
Materials 18,572.0 -0.51%
Utilities 8,489.9 -0.58%
Consumer Discretionary 3,067.2 -0.65%
Consumer Staples 13,630.6 -1.19%

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ASX 200 Session Chart

S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
ASX 200 opens lower and trends down throughout the day (Source: Market Index)

Markets

A generally weaker day for markets following a bit of mixed US inflation report (headline cooling but core remains sticky) and FOMC minutes where "the staff's projection at the time of the March meeting included a mild recession starting later this year."

  • Technology managed to withstand the underperformance of US tech overnight with notable gains from Altium (+2.0%), Wisetech (+1.5%) and Technology One (+1.5%)

  • Energy higher in-line with firmer oil prices, which rose 2.2% overnight

  • Staples finally caved in after rallying 14 of the last 16 sessions

Economy

Australia's unemployment rate remained unchanged at 3.5% in March.

  • "With employment increasing by around 53,000 people, and the number of unemployed decreasing by 1,600 people, the unemployment rate remained at a near 50-year low of 3.5 per cent," said Lauren Ford, ABS Head of Labour Statistics

  • The employment-to-population ratio increased 1 percentage point to 64.4% and the participation rate was unchanged at 66.7%. Both indicators were closed to all-time highs and explains "why employers are finding it hard to fill the high number of job vacancies."

China's trade surplus was US$88.2bn in March from US$116.8bn in the previous month.

  • Well above consensus expectations of US$39.2bn

  • Exports jumped 23.4% compared to a 6.1% increase in imports


Latest news


Market Insights

A bit of a short one tonight :(

RBA: 50 bps is possible

There are two factors that could put not only 25 bps back on the cards for the RBA. But also 50 bps.

1. There were 53,000 people employed in March, well above consensus expectations of 20,000. The ABS also notes that "the latest monthly percentage increase in trend employment was slightly higher than the monthly average increase for the 20 years before the pandemic."

2. ANZ expects Q1 trimmed mean of 6.8% year-on-year, which would pressure the RBA to crank up a 50 bps to make up for the pause.


Interesting news and movers

Trading higher

  • +12.1% Talga (TLG)

  • +12.1% Corporate Travel (CTD) – UK contract award

  • +6.5% Copper Energy (COE)

  • +4.1% Leo Lithium (LLL) – Drilling results

Trading lower

  • -5.8% Block (SQ2)

  • -4.0% Champion Iron (CIA)

  • -3.8% Domino's Pizza (DMP)

  • -2.7% 29Metals (29M) – Drilling results (Wed)


Broker updates

Macquarie on Australia banks:

  • “Banks are set to deliver record results in 1H23, underpinned by ~10-20bps of margin expansion.”

  • “We expect the market to focus on the outlook for margins, expenses, and credit quality.” 

  • “While banks have successfully managed to optimise deposit margins until earlier this year, competition has recently stepped up, and coupled with mortgage pricing headwinds, we expect banks to guide to lower margins in 2H23.”

  • “However, on a medium-term view, we continue to see risks from margin headwinds and potential credit quality concerns, which forms the basis for our Underweight sector view.”

  • The order of preference for the Big 4 is: ANZ, NAB, Westpac and CBA

As well as a few standalone Macquarie notes:

29Metals (29M): Neutral with $1.20 target price

  • “Drilling results at Capricorn highlight a new mineralised trend located to the east of Mammoth, located within 310m of existing development.”

  • “One of the better intersections includes 228m at 1.2% Cu, 3g/t Ag, and 50ppm Co (including 36m at 3.9% Cu, 6g/t Ag, and 188ppm Co).”

  • “However, today’s drilling results are encouraging and highlight possible mine life extensions at Capricorn.” 

Whitehaven Coal (WHC): Outperform with $8.50 target price

  • “WHC has released preliminary March quarterly result with ROM production 2% lower than we had anticipated.” 

  • “WHC downgraded its FY23 guidance with lower production and higher costs citing labour shortages, weather impacts and operational challenges.” 

  • “Thermal coal prices have retreated however FCF yields remains above 60% at spot.” 


Scans

Top Gainers

Code Company Last % Chg
EG1 Evergreen Lithium... $0.485 +49.23%
ELE Elmore Ltd $0.015 +36.36%
OMA Omega Oil & Gas Ltd $0.263 +34.62%
TG1 Techgen Metals Ltd $0.087 +31.82%
TIG Tigers Realm Coal... $0.013 +30.00%
View all top gainers

Top Fallers

Code Company Last % Chg
IS3 I Synergy Group Ltd $0.015 -28.57%
EME Energy Metals Ltd $0.12 -25.00%
AIV Activex Ltd $0.025 -21.88%
NSX NSX Ltd $0.047 -20.34%
AUA Audeara Ltd $0.056 -20.00%
View all top fallers

52 Week Highs

Code Company Last % Chg
EG1 Evergreen Lithium... $0.485 +49.23%
OMA Omega Oil & Gas Ltd $0.263 +34.62%
SMN Structural Monito... $0.82 +7.19%
LM1 Leeuwin Metals Ltd $0.30 +7.14%
XRF XRF Scientific Ltd $1.08 +5.88%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
AUA Audeara Ltd $0.056 -20.00%
MDI Middle Island Res... $0.031 -13.89%
FFF Forbidden Foods Ltd $0.014 -12.50%
TOY Toys'R'US ANZ Ltd $0.014 -12.50%
BGE Bridge Saas Ltd $0.04 -11.11%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.58 +0.56%
OZBD Betashares Austra... $45.28 -0.18%
IKO Ishares MSCI Sout... $95.61 +0.20%
WVOL Ishares Edge MSCI... $36.56 -0.46%
HLTH Vaneck Global Hea... $10.80 -0.19%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
ZIM Zimplats Holdings... $24.95 -0.60%
RHY RHYTHM Bioscience... $0.47 -1.05%
CMW Cromwell Property... $0.575 0.00%
LFSPA Latitude Group Ho... $89.78 +0.66%
CWY Cleanaway Waste M... $2.435 -0.61%
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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