Evening Wrap: ASX 200 flat, lithium and iron ore miners higher, eyes on US earnings season

Well ... that was a pretty boring session. Iron ore and lithium names outperformed, Discretionary stocks sold off, US earnings season continues to ramp up and a few Macquarie notes of interest.

Let's dive in.

ASX 200 Session Chart

Uneventful, breakeven day for the ASX 200 (Source: Market Index)

Markets

This was a pretty dull session. So expect a pretty crisp and short Evening Wrap.

Markets are somewhat in waiting mode for the next direction driving catalyst, which is currently first quarter US earnings season. Approximately 14% of the S&P 500 market cap is reporting this week and 42% the next.

As for the ASX 200, the market traded in a relatively tight range, between highs of 0.2% and lows of -0.06%. Materials outperformed, with notable gains from iron ore heavyweights BHP (+1.5%) and Rio Tinto (+1.1%) as well as several lithium names. Outside of Materials outperformance and Discretionary underperformance, most sectors were also rather quiet.

Economy

No major economic announcements.

Latest news

Interesting news and movers

Trading higher

• +21.6% EML Payments (EML) – Continuation rally

• +13.6% Lindian Resources (LIN) - Continuation rally

• +5.5% 29Metals (29M)

• +5.4% Telix Pharma (TLX)

• +1.1% Jervois Global (JRV) – Updates to Idaho Cobalt Project resource

• Lithium sector move: Lithium Power (+16.2%), Argosy (+6.0%), Global Lithium (+4.1%), Pilbara Minerals (+3.3%), Core Lithium (+3.1%)

Trading lower

• -7.4% The Star Entertainment Group (SGR)

• -6.4% Tietto Minerals (TIE)

• -4.0% Terracom (TER)

• -3.75% Kelsian Group (KLS)

Broker updates

Macquarie notes:

Core Lithium (CXO): Outperform with $1.20 target price

• “CXO has upgraded its resource estimate for Finniss, adding in two new deposits with total resources rising 62% to 30.6mt @ 1.31% Li2O.”

• “We have extended the mine life for the Carlton underground, which increases the mine life of Finniss by one year to +17 years.”

• “Progress updates on the production ramp-up for the Finniss project present the key near-term catalyst for CXO.” 

Hub24 (HUB): Outperform with $33.10 target price

• “HUB released their 3Q23 business update, FY24 FUA guidance was left unchanged at $80-90bn following the announcement of a ~$4bn institutional transition from Equity Trustees.” 

• “Retail flows are showing signs of weakness and have likely been subdued to start the quarter due to the timing of Easter. In the short-term this places a lot of reliance on there being a recovery in the seasonally strong months of May/June.”

• “We continue to prefer Netwealth Group with 25% 3-year EPS CAGR vs. HUB at 20%.” 

Lovisa (LOV): Outperform with $35.70 target price

• “Reopening spending CY23 YTD supported by price. Weak volumes and A&NZ foot traffic into March/April suggests softness in underlying demand.”

• “This is in line with our expectations for moderation in LfLs over 2H23 and into FY24, consistent with management caution toward tough CY22 comps.”

• “Earnings upgrades, reflecting greater confidence in store rollout with good YTD rollout momentum across the US, drives our updated TP of $35.70.”

Scans