Evening Wrap: ASX 200 flat on rising real estate stocks vs falling healthcare, awaits resumption of programming in US

The S&P/ASX 200 closed 0.3 points lower.

-0.3 points. The Market Index ASX 200 page shows this as a change of 0.00%.

Enough said.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 0.3 points lower at 7,769.4, 0.21% from its session low and just 0.03% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 163 to 110.

The Real Estate Investment Trusts (XPJ) (+0.51%) sector was the best performing sector today. No clear drivers in terms of news or macro, and this was consistent with pretty much everything else on the ASX today.

-0.3 index points (not enough to raise a change to two decimal points). No US markets for guidance. Inexplicable and typically listless stuff from Aussie shares.

Nonetheless, it was a good day for Real Estate, with an almost unanimous move higher throughout the sector – unless of course you are serial disappointer Lend Lease (ASX: LLC).

Real Estate stocks had a solid day. If you know why, please let me know.

Just as inexplicable was the worst performing sector today, Health Care (XHJ) (-0.98%). No doubt it was largely dragged lower by a substantial fall in major constituents Cochlear (ASX: COH) (-4.8%) and CSL (ASX: CSL) (-0.8%).

Several other heavyweight Healthcare stocks were also lower (I'll let you peruse the table below), but the sector wasn't without its fair share of big winners too. It's a sector which up until today had shown substantial promise, so today's shenanigans are particularly frustrating!

Healthcare was a particularly odd one today...🤔

ChartWatch

Silver Futures (back-adjusted, front month) COMEX

Finally, something for silver bulls to cheer about again!

The last time we covered silver was in ChartWatch in the Evening Wrap on 13 June.

At that time, it was flirting with a close below the 29.29-30.19 demand zone. It does look like demand is holding steady with the price failing to close below the 29.00 point of demand, and based upon today’s live candle, it appears to be grappling control away from the supply-side.

The close of today’s candle is crucial. It must be high, and it must complete a long white candle. Anything less would indicate supply continues to sell rallies – not hold out for more.

Consider that the volatility in the candles since the failure at 32.76 (i.e., plenty of overlap and black-then-white showings) indicates great indecision in this market. A strong showing of demand (or supply) would be welcome to settle the current debate over control.

The last trough at 28.73, along with 29.00, sets a clear demand zone above which the short term uptrend remains intact.

Supply is 31.67-32.76. I suggest plenty of work needs to be done to remove it. Watch for black-bodied candles and ore upward pointing shadows in this range to indicate supply remains resolute.

In between the two barriers, we’re likely to see more chop!

Shanghai Composite Index (SSEC)

The break down of Chinese stocks is occurring in slow motion for now...

The last time we covered Chinese stocks was in ChartWatch in the Evening Wrap on 14 June.

In that update we drew some very sad and sorry lines between the unravelling of base metals prices and what appeared to be an impending break down in Chinese stocks.

The good news is that break down hasn’t occurred yet – or at least its occurring in slow motion.

The bad news is that under the surface, it’s the Chinese property sector that is again unravelling and threatens to drag the rest of the recovering Chinese economy with it.

Case in point, the Hang Seng China A Properties Index chart below. It contains the biggest mainland Chinese property stocks, but being an A-index, represents only those companies Chinese companies and residents can purchase. For me, this makes it a better representation of what’s happening on the ground with respect to sentiment.

Chinese property stocks are again unravelling

The next chart is simply a natural extension from the last – our S&P/ASX 200 Resources sector index. Notice any similarities? 🤔

Notice any similarities between the last two charts?.

Economy

Today

• CHINA 1-year & 5-year Loan Prime Rates

  • Unchanged at 3.45% and 3.95% respectively as forecast

Later this week

Thursday

• 20:00 UK Monetary Policy Summary & Official Bank Rate (no change vs 5.25% previous)

Friday

• 17:15 EUR/UK French, German, Eurozone, & UK flash PMIs

• 23:45 USA Flash Manufacturing PMI May (forecast 51 vs 51.3 in April) & Flash Services PMI May (forecast 53.4 vs 54.8 in April)

Saturday

• 00:00 USA Existing Home Sales May (4.08M forecast vs 4.14M in April)

Latest News

Interesting Movers

Trading higher

• +17.4% PYC Therapeutics (PYC) - No news, but on Tuesday was initiated at buy at Canaccord Genuity with a $0.22 price target, plus I've been running it in my favourite uptrends list in my Daily Scans…so maybe general positive sentiment aligning with prevailing short and long term uptrends 🔎📈

• +16.2% Helia Group (HLI) - Broker response generally remained positive after yesterday's Update on CBA contract, including an upgrade to OUTPERFORM from Macquarie (see Broker Notes section)

• +12.5% Terracom (TER) - No news, thermal coal prices modest rise yesterday

• +10.9% Electro Optic Systems (EOS) - No news, bouncing from long term trend ribbon, closed back above short term downtrend ribbon 🔎📈

• +10.0% Peninsula Energy (PEN) - No news 🤔

• +9.0% Droneshield (DRO) - DroneShield Awarded $4.7 Million Contract, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -7.9% Red 5 (RED) - No news, possibly due to leadership transition as a result of the recent merger with SLR, closed below short term uptrend ribbon 🔎📉

• -7.4% Clarity Pharmaceuticals (CU6) - Application for quotation of securities - CU6

• -6.5% WA1 Resources (WA1) - Pullback after a massive run following yesterday's West Arunta Project - Luni Metallurgical Results

• -5.4% Aroa Biosurgery (ARX) - No news 🤔

• -5.1% Maas Group (MGH) - No news, fall is consistent with prevailing short term downtrend 🔎📉

• -4.9% IDP Education (IEL) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -4.8% Cochlear (COH) - No news, very unusual 🤔

Broker Notes

• AMA Group (AMA)

  • Retained at buy at Bell Potter; Price Target: $0.07 from $0.08

• APA Group (APA)

  • Retained at outperform at Macquarie; Price Target: $9.40

• CSL (CSL)

  • Retained at overweight at Morgan Stanley; Price Target: $310.00

• Evolution Mining (EVN)

  • Retained at overweight at Morgan Stanley; Price Target: $3.90

• Helia Group (HLI)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $3.90

  • Retained at hold at Ord Minnett; Price Target: $4.00

• James Hardie Industries (JHX)

  • Retained at overweight at Morgan Stanley; Price Target: $58.00

• Mineral Resources (MIN)

  • Retained at overweight at Morgan Stanley; Price Target: $85.50

• QBE Insurance Group (QBE)

  • Retained at buy at Jarden; Price Target: $21.20 from $21.50

  • Retained at buy at Jefferies; Price Target: $19.95 from $20.05

  • Retained at overweight at Morgan Stanley; Price Target: $19.85 from $20.10

  • Retained at add at Morgans; Price Target: $20.03 from $20.01

  • Retained at lighten at Ord Minnett; Price Target: $14.00

• Resmed Inc (RMD)

  • Retained at outperform at Macquarie; Price Target: $34.85

• Seven West Media (SWM)

  • Retained at buy at Ord Minnett; Price Target: $0.40

• WA1 Resources (WA1)

  • Retained at buy at Bell Potter; Price Target: $28.00 from $17.65

• Wisetech Global (WTC)

  • Upgraded to buy from outperform at CLSA; Price Target: $112.00 from $99.00

Scans