Evening Wrap: ASX 200 gains on strong financial, consumer, and gold stocks, meltdown in lithium, uranium and energy continues

Market yields keep falling on the back of lingering (festering) fears for global economic growth. There are clear winners and losers from such a scenario, and today’s trade on the ASX reflected this again clearly.

For the details on which stocks won and which stocks lost (miserably!), plus technical analysis on the S&P/ASX 200 and lithium, along with all the key broker upgrades, downgrades and price target changes...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 31.0 points higher at 8,013.4, 0.39% from its session low and 0.21% from its low. Despite today’s modest gain, disturbingly in the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by 128 to 142.

For the week, the XJO finished down 78.5 points or 0.97% lower, 1.29% from its intraweek high and 1.07% from its intraweek low.

Market yields keep falling on the back of lingering (festering) fears for global economic growth. There are clear winners and losers from such a scenario, and today’s trade on the ASX reflected this again clearly.

Sectors that do well in such an environment include Financials (XFJ) (+1.4%), consumer stocks such as those from Consumer Discretionary (XDJ) (+1.0%) and Consumer Staples (XSJ) (+0.8%), and Real Estate Investment Trusts (XPJ) (+0.41%). Whilst Gold (XGD) (+0.63%) is technically part of the Resources (XJR) (-1.3%) sector, it is also a beneficiary because the opportunity cost of hold gold diminishes with lower market yields.

Sectors that are unfortunately almost destined to struggle in such an environment are Resources and Energy (XEJ) (-3.0%). For the former, the lithium (and to a slightly lesser extent uranium) sector meltdown continues. The Citi research article I reported on earlier in the week has permeated through the market now, and it is finally (why just now!?) driving home the potential pain being felt by producers.

The benchmark November GFEX Lithium Carbonate futures also dipped to a new record low today (see ChartWatch section below for technical analysis).

For energy, coking and thermal coal, and crude oil prices have tumbled in recent sessions – completely undermining support for this sector. The damage was widespread today. I won’t do a table, it’s too depressing – but if you must look – then check out the Interesting Moves section below.

For now, I present just happy thoughts – see below a table of only the best stocks from the best sectors today!

The best forming stocks from the best performing sectors

ChartWatch

S&P/ASX 200 (XJO)

An interesting chart

A big apology for not uploading this chart into its rightful place in yesterday's Evening Wrap!

Just quickly here because we only just did it yesterday...but a modest demand-side candle today, that's two now since the Wednesday wipeout.

Wednesday's supply-side candle is the dominant short term price action signal. It smacks of supply-side control. Fortunately, for now we are seeing some very tentative signs demand is creeping back in at the the short term uptrend ribbon.

To negate (or at least to begin to negate) Wednesday's candle, the XJO must close at least halfway back up Wednesday's range, that is, what I like to call its "balance point". This comes out at 8016. Today's high was 8030 and we closed at 8013.

No terrible.

Along with the short term trend ribbon, 7928 is now demand. 8117-8149 is supply. My tip is we're stuck in the middle until we can close either side of demand/supply, then go with the move either way.

Lithium Carbonate Futures (Benchmark moneth, back-adjusted) GFEX

I only do trends. So, you know my opinion here...

The last time we covered GFEX Lithium Carbonate Futures was in ChartWatch in the Evening Wrap on 13 August.

In that update, it was doing much the same thing that it’s doing right now. The trend here is impeccable.

Today, for the first time the benchmark November contract printed a last price in the 60,000’s or as traders like to call it a “six-handle”.

It managed to scrape itself back to a whisker in the sevens, but the end result is much the same – another supply-side candle – in line with prevailing short and long term downtrends.

One can find narratives to paint current and recent trends as a travesty of the fundamentals, with the market sure to eventually realise that lithium demand is, and will continue to soar, as the energy transition continues.

One can also find narratives to paint current and recent trends as precisely reflective of the a massive supply overhang against a backdrop of slowing demand growth.

You know I don’t do narratives. I only do trends. So, you know my opinion here...

Economy

Today

• There weren't any major data releases in our time zone today

Later this week

Friday

• 22:30 USA Non-Farm Employment Change August (+164,000 forecast vs +114,000 in July) and Unemployment Rate (4.2% forecast vs 4.3% in July)

• 22:30 USA Average Hourly Earnings August (+0.3% forecast vs +0.2% in July)

Latest News

Interesting Movers

Trading higher

• +9.1% Predictive Discovery (PDI) - Perseus increases investment in Predictive to 19.9%

• +8.8% Strike Energy (STX) - Ceasing to be a substantial holder (State Street is commonly assumed to be an active short seller)

• +8.1% Cettire (CTT) - No news, continues positive response to 4 Sep Founder and CEO Share Purchase

• +5.6% Ora Banda Mining (OBM) - No news since 3 Aug Corporate Presentation - North America, ASX gold stocks generally higher today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.2% Clarity Pharmaceuticals (CU6) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +3.5% Unibail-Rodamco-Westfield (URW) - URW announces the successful placement of a 1.3 Bn euros, rise is consistent with prevailing short and long term uptrends 🔎📈

• +3.0% Myer (MYR) - No news, ASX consumer discretionary stocks generally higher today, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -11.1% Latin Resources (LRS) - No news, tied to the PLS price due to the takeover

• -11.1% Wildcat Resources (WC8) - No news, lithium meltdown continued today as lithium minerals prices fell sharply again in China (see ChartWatch section above), fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -8.3% Anteris Technologies (AVR) - No news since 2 Sep Court Approval to Hold Scheme Meetings & Booklet Registered, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -6.6% Pilbara Minerals (PLS) - No news, ditto lithium, also plenty of speculation regarding profitability after Citi's research report, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -5.6% Whitehaven Coal (WHC) - No news, thermal and coking coal prices have fallen sharply over the last couple of weeks, ASX energy sector under significant pressure on global growth fears, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -5.5% Deep Yellow (DYL) - No news, another tough day for ASX uranium stocks, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -5.0% WA1 Resources (WA1) - No news

• -4.9% Paladin Energy (PDN) - No news, ditto uranium, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -4.8% Appen (APX) - Application for quotation of securities

• -4.8% Mineral Resources (MIN) - No news, ditto lithium, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -4.8% Liontown Resources (LTR) - No news, ditto lithium, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -4.1% Chalice Mining (CHN) - No news, ditto lithium/battery metals, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -3.9% Boss Energy (BOE) - No news, ditto uranium, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -3.9% Woodside Energy Group (WDS) - No news, ditto energy, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -3.9% Arcadium Lithium (LTM) - No news, ditto lithium, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

• -3.8% Coronado Global Resources (CRN) - No news, ditto energy, fall is consistent with prevailing short and long term downtrends (that's why it has been a regular in ChartWatch Scans Downtrends lists) 🔎📉

Broker Notes

• Australian Clinical Labs (ACL)

  • Retained at neutral at Macquarie; Price Target: $2.95

• Ansell (ANN)

  • Retained at outperform at Macquarie; Price Target: $32.00

• Accent Group (AX1)

  • Retained at overweight at Morgan Stanley; Price Target: $2.50

• Breville Group (BRG)

  • Retained at overweight at Morgan Stanley; Price Target: $35.00

• Capitol Health (CAJ)

  • Retained at outperform at Macquarie; Price Target: $0.33

• Charter Hall Group (CHC)

  • Retained to reduce from buy at Citi; Price Target: $15.70

• Capricorn Metals (CMM)

  • Retained at buy at Bell Potter; Price Target: $6.49 from $6.38

  • Upgraded to outperform from neutral at Macquarie; Price Target: $6.30 from $5.30

  • Retained at accumulate at Ord Minnett; Price Target: $6.10 from $5.75

• Cochlear (COH)

  • Retained at underperform at Macquarie; Price Target: $283.00

• Coles Group (COL)

  • Retained at equal-weight at Morgan Stanley; Price Target: $18.80

• Coronado Global Resources (CRN)

  • Retained at buy at Bell Potter; Price Target: $1.70 from $1.85

  • Retained at outperform at Macquarie; Price Target: $1.80 from $2.10

  • Retained at buy at UBS; Price Target: $1.85 from $1.95

• CSL (CSL)

  • Retained at outperform at Macquarie; Price Target: $330.00

• Domino's Pizza Enterprises (DMP)

  • Retained at overweight at Morgan Stanley; Price Target: $44.00

• Endeavour Group (EDV)

  • Retained at overweight at Morgan Stanley; Price Target: $6.20

• Fisher & Paykel Healthcare Corporation (FPH)

  • Retained at outperform at Macquarie; Price Target: $39.20

• Guzman y Gomez (GYG)

  • Retained at overweight at Morgan Stanley; Price Target: $38.50

  • Downgraded to sell from neutral at UBS; Price Target: $35.00 from $31.00

• Guzman y Gomez (H L)

  • Retained at neutral at Macquarie; Price Target: $1.60

• Healius (HLS)

  • Retained at sell at Ord Minnett; Price Target: $1.37

• Harvey Norman (HVN)

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

• Integral Diagnostics (IDX)

  • Retained at outperform at Macquarie; Price Target: $2.90

• IDP Education (IEL)

  • Retained at overweight at Morgan Stanley; Price Target: $19.20

• JB HI-FI (JBH)

  • Retained at underweight at Morgan Stanley; Price Target: $60.60

• KMD Brands (KMD)

  • Retained at equal-weight at Morgan Stanley; Price Target: $0.35

• Lovisa (LOV)

  • Retained at equal-weight at Morgan Stanley; Price Target: $33.25

• Arcadium Lithium (LTM)

  • Retained at buy at Citi; Price Target: $6.50

  • Retained at outperform at Macquarie; Price Target: $6.60

• Mineral Resources (MIN)

  • Retained at buy at Citi; Price Target: $50.00 from $55.00

• Metro Mining (MMI)

  • Retained at buy at Shaw and Partners; Price Target: $0.14

• Medibank Private (MPL)

  • Retained at neutral at Macquarie; Price Target: $3.85

• Metcash (MTS)

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.83

• Monash IVF Group (MVF)

  • Retained at outperform at Macquarie; Price Target: $1.50

• NIB (NHF)

  • Retained at neutral at Macquarie; Price Target: $6.30

• Pro Medicus (PME)

  • Retained at outperform at Macquarie; Price Target: $152.50

• Patriot Battery Metals (PMT)

  • Retained at buy at Shaw and Partners; Price Target: $1.80

• Premier Investments (PMV)

  • Retained at overweight at Morgan Stanley; Price Target: $39.50

• Polynovo (PNV)

  • Retained at outperform at Macquarie; Price Target: $2.85

• Regis Healthcare (REG)

  • Retained at outperform at Macquarie; Price Target: $5.50

• Ramsay Health Care (RHC)

  • Retained at neutral at Macquarie; Price Target: $45.75

• Resmed Inc (RMD)

  • Retained at outperform at Macquarie; Price Target: $36.25

• Sonic Healthcare (SHL)

  • Retained at neutral at Macquarie; Price Target: $26.10

• Santos (STO)

  • Retained at neutral at Citi; Price Target: $8.00

• Super Retail Group (SUL)

  • Retained at underweight at Morgan Stanley; Price Target: $14.50

• Southern Cross Gold (SXG)

  • Retained at buy at Shaw and Partners; Price Target: $3.26

• Temple & Webster Group (TPW)

  • Retained at overweight at Morgan Stanley; Price Target: $13.15

• Treasury Wine Estates (TWE)

  • Retained at overweight at Morgan Stanley; Price Target: $14.60

• Wesfarmers (WES)

  • Retained at underweight at Morgan Stanley; Price Target: $55.70

• Woolworths Group (WOW)

  • Retained at overweight at Morgan Stanley; Price Target: $38.00

Scans