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/Evening Wrap: ASX 200 logs solid gain on surging tech, consumer stocks, gold leads resources higher, but lithium dips again
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Market Wraps
/Evening Wrap: ASX 200 logs solid gain on surging tech, consumer stocks, gold leads resources higher, but lithium dips again
Market Wraps
Evening Wrap: ASX 200 logs solid gain on surging tech, consumer stocks, gold leads resources higher, but lithium dips again
Mon 29 Jul 24, 5:29pm (AEDT)
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Commodities in article
The S&P/ASX 200 closed 68.3 points higher, up 0.86%.
Any gain is a good gain, but it was made even sweeter today by the fact that it was broad-based (all 11 of the major ASX sectors rose, including nearly 3 rising stocks for every faller), and we closed a just whisker away from the session's high.
Closes near the high, particularly on days that showed a solid gain – indicate excess demand sustained into the close. Likely, the only thing that stopped the demand-side from acquiring more stock was...ding ding ding ding...the closing bell! It's usually a good sign demand will pick up tomorrow where it left off today...
All things being equal.
That is: No crazy stuff happening in global stock or commodity markets tonight! 🙏
For all of the big moves in all the big (and small) stocks on our market today, plus technical analysis of the Russell 2000 and High Grade Copper, plus all the key economic data points to look out for this week, and all the big broker moves for the day...
Let's dive in!
Today in Review
Mon 29 Jul 24, 4:26pm (AEST)
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Markets
ASX 200 Session Chart
The S&P/ASX 200 (XJO) finished 68.3 points higher at 7,989.6, 0.86% from its session low and just 0.13% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by an impressive 202 to 73.
Information Technology (XIJ) (+1.5%) was the best performing sector today, likely in response to a modest recovery in tech stocks in New York on Friday. Communication Services (XTJ) (+1.4%) was the next best sector, but note there’s a massive overlap between it and the XIJ – so we’re really talking about the same thing.
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
TPG Telecom (TPG) | $4.71 | +$0.15 | +3.3% | +2.8% | -6.4% |
REA Group (REA) | $201.15 | +$5.83 | +3.0% | +2.3% | +30.3% |
Macquarie Technology Group (MAQ) | $92.25 | +$2.64 | +2.9% | -2.5% | +36.6% |
Life360 (360) | $16.13 | +$0.43 | +2.7% | -1.5% | +108.1% |
Wisetech Global (WTC) | $95.46 | +$2.07 | +2.2% | -4.8% | +13.3% |
Nextdc (NXT) | $16.69 | +$0.33 | +2.0% | -5.3% | +36.0% |
Nuix (NXL) | $3.40 | +$0.06 | +1.8% | +10.4% | +161.5% |
News Corporation (NWS) | $43.69 | +$0.72 | +1.7% | +1.3% | +50.7% |
Megaport (MP1) | $10.91 | +$0.16 | +1.5% | -2.8% | +17.6% |
Car Group (CAR) | $34.57 | +$0.5 | +1.5% | -1.9% | +42.9% |
Xero (XRO) | $134.14 | +$1.6 | +1.2% | -1.7% | +11.7% |
Technology One (TNE) | $19.59 | +$0.23 | +1.2% | +5.3% | +26.0% |
ASX Tech & Communication Services stocks today
Also doing well today were the interest rate sensitives like Real Estate (XRE) (+1.4%), Consumer Discretionary (XDJ) (+1.1%), Utilities (XUJ) (+1.1%), and Financials (XFJ) (+0.95%).
Key benchmark bond yields in the USA and at home are trending lower, and this is helping sectors that have large debt exposures (i.e. like Real Estate), rely on a healthy consumer (i.e. like Consumer Discretionary and Financials), and whose dividend yields are compared to risk-free bond yields (i.e. like Utilities).
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
The Star Entertainment Group (SGR) | $0.585 | +$0.075 | +14.7% | +19.4% | -40.6% |
Zip Co. (ZIP) | $1.845 | +$0.07 | +3.9% | +23.4% | +329.1% |
IDP Education (IEL) | $14.41 | +$0.5 | +3.6% | -4.9% | -39.7% |
Lendlease Group (LLC) | $6.20 | +$0.18 | +3.0% | +14.6% | -25.7% |
Credit Corp Group (CCP) | $15.20 | +$0.41 | +2.8% | +1.5% | -32.0% |
Light & Wonder (LNW) | $161.01 | +$4.28 | +2.7% | +1.3% | +55.7% |
Aristocrat Leisure (ALL) | $53.92 | +$1.33 | +2.5% | +8.4% | +38.8% |
Corporate Travel Management (CTD) | $13.01 | +$0.32 | +2.5% | -1.9% | -34.7% |
Challenger (CGF) | $6.98 | +$0.16 | +2.3% | -0.4% | -1.6% |
Super Retail Group (SUL) | $15.41 | +$0.32 | +2.1% | +10.5% | +30.1% |
Goodman Group (GMG) | $35.23 | +$0.71 | +2.1% | +1.4% | +71.7% |
Breville Group (BRG) | $28.18 | +$0.55 | +2.0% | +3.8% | +31.2% |
QBE Insurance Group (QBE) | $17.59 | +$0.28 | +1.6% | +1.2% | +11.4% |
Origin Energy (ORG) | $10.68 | +$0.17 | +1.6% | -1.7% | +25.9% |
Insurance Australia Group (IAG) | $7.31 | +$0.11 | +1.5% | +2.4% | +23.1% |
Westpac Banking Corporation (WBC) | $28.99 | +$0.4 | +1.4% | +6.5% | +31.9% |
Commonwealth Bank of Australia (CBA) | $134.90 | +$1.76 | +1.3% | +5.9% | +28.5% |
National Australia Bank (NAB) | $37.90 | +$0.49 | +1.3% | +4.6% | +35.2% |
ASX interest rate sensitives today
All 11 of the major ASX sectors showed gains today, but if you could say a couple of sectors did it tough, these would be the not-so-dynamic-and-regular-worst-performers Energy (XEJ) (+0.59%) and Resources (XJR) (+0.21%).
Commodity prices were mixed on Friday, with modest rallies in base metals and gold, but continued weakness in major crude oil contracts.
The best of the Resources sector were gold stocks, which generally bounced back strongly from the beating they took on Thursday and Friday. Uranium stocks also generally rose as the key Global X Uranium ETF (NYSE: URA) rallied in the US on Friday, plus there was also a very small rally in uranium futures price on COMEX. Lithium stocks, generally, were pretty lousy.
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
Catalyst Metals (CYL) | $1.995 | +$0.09 | +4.7% | +76.5% | +152.5% |
Viva Energy Group (VEA) | $3.24 | +$0.13 | +4.2% | +2.9% | +2.9% |
Bannerman Energy (BMN) | $2.84 | +$0.1 | +3.7% | -13.2% | +78.1% |
Metals X (MLX) | $0.430 | +$0.015 | +3.6% | +2.4% | +36.5% |
WA1 Resources (WA1) | $15.35 | +$0.49 | +3.3% | -14.2% | +160.6% |
Perseus Mining (PRU) | $2.58 | +$0.08 | +3.2% | +9.8% | +44.5% |
West African Resources (WAF) | $1.435 | +$0.04 | +2.9% | -7.7% | +61.2% |
Develop Global (DVP) | $2.04 | +$0.05 | +2.5% | -6.0% | -36.6% |
Resolute Mining (RSG) | $0.625 | +$0.015 | +2.5% | +20.2% | +43.7% |
Yancoal Australia (YAL) | $6.95 | +$0.14 | +2.1% | +5.0% | +33.7% |
Sandfire Resources (SFR) | $8.42 | +$0.16 | +1.9% | -3.6% | +40.3% |
Champion Iron (CIA) | $6.16 | +$0.1 | +1.7% | -3.8% | -1.4% |
South32 (S32) | $3.02 | +$0.04 | +1.3% | -17.5% | -23.2% |
Red 5 (RED) | $0.380 | +$0.005 | +1.3% | +5.6% | +105.4% |
Santos (STO) | $7.84 | +$0.1 | +1.3% | +2.4% | -1.6% |
Northern Star Resources (NST) | $13.96 | +$0.12 | +0.9% | +7.4% | +20.9% |
Woodside Energy Group (WDS) | $27.14 | +$0.2 | +0.7% | -3.8% | -28.3% |
Rio Tinto (RIO) | $115.87 | -$0.04 | 0.0% | -2.6% | -4.1% |
BHP Group (BHP) | $42.07 | -$0.03 | -0.1% | -1.4% | -10.3% |
IGO (IGO) | $5.67 | -$0.05 | -0.9% | +0.5% | -60.2% |
Iluka Resources (ILU) | $6.00 | -$0.08 | -1.3% | -8.4% | -45.4% |
Liontown Resources (LTR) | $0.950 | -$0.015 | -1.6% | +5.0% | -67.1% |
Pilbara Minerals (PLS) | $2.92 | -$0.06 | -2.0% | -4.9% | -42.2% |
Whitehaven Coal (WHC) | $7.63 | -$0.17 | -2.2% | -0.3% | +1.5% |
Paladin Energy (PDN) | $11.18 | -$0.25 | -2.2% | -10.4% | +47.1% |
Bellevue Gold (BGL) | $1.400 | -$0.035 | -2.4% | -20.0% | -3.8% |
Core Lithium (CXO) | $0.094 | -$0.003 | -3.1% | +1.1% | -86.6% |
Vulcan Energy Resources (VUL) | $4.25 | -$0.19 | -4.3% | +13.0% | -3.2% |
Boss Energy (BOE) | $3.47 | -$0.16 | -4.4% | -16.0% | +16.4% |
The best and worst of ASX Resources and Energy stocks today
ChartWatch
High Grade Copper Futures (Front month, back-adjusted) COMEX
Make or break for copper's mega-trend
The last time we covered the high grade copper was in ChartWatch in the Evening Wrap on 18 July.
In that update, we said that “anything less than emphatic demand-side candles” at the long term uptrend ribbon “may consign copper to the too hard basket” for momentum traders.
When momentum traders leave the market – you’ve lost a major source of pervasive demand.
The only emphatic candles we saw in the long term uptrend ribbon were supply side ones. Worse: 1. The long term trend ribbon has rolled and is now neutral; and 2: The price has closed below the long term trend ribbon, meaning it now will likely act as an area of dynamic supply.
There is some hope, though, for copper bulls! Whilst the entire last run (from below 4.00) has evaporated, it is an area of significant historical demand. We’re starting to see some of that demand manifest itself as a white-bodied candle with a downward pointing shadow in Thursday’s price action.
Unfortunately, the excess demand demonstrated by that candle did not continue Friday (and not today, so far), which leaves me fearful of one more push lower to properly test the 3.94-4.00 demand zone.
Black candles in that zone spell disaster for the idea that we’re in some sort of copper mega trend. If we close below 3.94 – I put to you: We most certainly are not.
Alternatively, white-bodied candles and or downward pointing candle shadows into 3.94-4.00 are very positive for copper bulls and could well help stamp out a very meaningful low. Where can we go from such a low? There’s supply all the way up now…
In order: The long term trend ribbon, 4.32, the short term trend ribbon, 4.70, etc.
Watch the candles, otherwise a return to rising peaks and rising troughs is another positive – signalling the demand-side is gaining strength, and or a close above the short term uptrend ribbon at least.
Russell 2000 Index (RUT)
Unfinished business
The last time we covered the RUT was in ChartWatch in the Evening Wrap on 22 July.
In that update, I noted the strong inverse relationship between US benchmark bond yields and the Russell 2000 (RUT). It’s one of the oldest relationships in financial markets – yields down (i.e. when market interest rates, i.e., the cost of risk-free money goes down), stocks up.
Funnily enough, that relationship hasn’t changed since the 22 of July (and while it may fluctuate on a day-to-day basis, it probably won’t in your great grandchildren’s lifetimes either!).
US 2-year bond yields – the key benchmark for short term rates in the US are coming down, and the RUT remains super strong. Unlike its counterpart, the NASDAQ Composite Index, it has withstood the mini-panic experienced by most major stock markets over the past couple of weeks.
As I’ve said before, the RUT is the best gauge of US stock market strength or weakness when it comes to predicting the influence on the S&P/ASX200. Its gain on Friday was reflected here today.
The good news is that the technicals here remain very solid. I see strong and well established short and long term uptrends, solid price action (a little bit of consolidation after the last run up – healthy – and apart from that rising peaks and rising troughs), and generally demand-side candles.
Again on the last point, there have been a couple of recalcitrants, but if there has been supply-side showings, they’ve largely only resulted in a miniscule pullback compared to the 2019-2279 demand-side push.
Friday’s candle’s close puts us within spitting distance of the 2279-2289 supply zone. A close above that clears the way for a probe of the relative point of supply vacuum between 2289 and the 8 November 2021 all time high of 2459.
That high is pivotal to the success or failure of the current bull market. It’s the high that occurred just before the Fed back flipped on rates and foreshadowed lift-off in 2022. The RUT is the only major US index not to take out that pre-lift off high. I feel that there’s some unfinished business here.
If the RUT does push through 2289, and then on to 2459 – understand that this US bull market is only beginning…
Where does it start to go wrong? On a close below the 2176 point of demand, and then on a close below the dynamic demand of the short term uptrend ribbon.
Until then, and as long as the candles stay white/downward pointing shadows, I can’t see anything in the chart that suggests the prevailing short and long term uptrends cannot continue.
Economy
Today
There weren't any major data releases in our time zone today
Later this week
Tuesday
11:30 AUS Building Approvals June (-2.3% forecast vs +5.5% May)
Wednesday
00:00 USA CB Consumer Confidence July (99.8 forecast vs 100.4 June)
00:00 USA JOLTS Job Openings June (8.41M May)
11:30
AUS Consumer Price Index (CPI) June Quarter (+1.0% q/q forecast and 3.8% p.a. vs +1.0% q/q and 4.0% p.a. March)
AUS Retail Sales June (+0.3% forecast vs +0.6% May)
CHN Manufacturing PMI July (49.3 forecast vs 49.5 May) & Non-Manufacturing PMI (50.2 forecast vs 50.5 May)
12:00 (Tentative) JPN Bank of Japan interest rate decision (no change forecast)
19:00 EUR Core CPI Flash Estimate July (+2.8% p.a. forecast vs +2.9% p.a. June)
Thursday
00:00 USA Pending Home Sales June (+1.6% forecast vs -2.1% May)
04:00 USA Federal Reserve interest rate decision (no change forecast)
04:30 USA Chairman Powell Press Conference
21:00 UK BOE interest rate decision (forecast -0.25% to 5.0%)
Friday
00:00 ISM Manufacturing PMI July (49.0 forecast vs 48.5 previous)
11:30 AUS Producer Price Index (PPI) June Quarter (forecast +1.0% q/q vs +0.9% q/q forecast)
22:30 USA Non-Farm Employment Change July (+177k forecast vs +206k June); Average Hourly Earnings July (+0.3% m/m forecast vs +0.3% June); Unemployment Rate (4.1% forecast vs 4.1% June)
Latest News
Interesting Movers
Trading higher
+14.7% The Star Entertainment Group (SGR) - No news, pushing towards top of long base pattern trading range, and closed in the long term downtrend ribbon for the first time since 17 Nov 2022 🤔
+12.8% Invictus Energy (IVZ) - Strategic Investment & Production Sharing Agreement Update
+8.5% Opthea (OPT) - No news 🤔
+5.9% Clarity Pharmaceuticals (CU6) - No news, rise is consistent with prevailing short and long term uptrends (a ChartWatch ASX Scans regular 🤔) 🔎📈
+5.2% Nufarm (NUF) - No news 🤔
+5.0% Droneshield (DRO) - No news, customary volatility since 16 July Response to ASX Price Query
+4.8% Fenix Resources (FEX) - No news today, but check out Friday's Quarterly Activities Report and Thursday's Beebyn-W11 Feasibility Study and Maiden Ore Reserve, rise is consistent with prevailing short and long term uptrends 🔎📈
+4.2% Viva Energy Group (VEA) - 1H2024 Operating Update and Unaudited Financial Result
+3.9% Zip Co. (ZIP) - No news since 25 July ZIP Share Purchase Plan, rise is consistent with prevailing short and long term uptrends (a ChartWatch ASX Scans regular 🤔) 🔎📈
+3.7% Bannerman Energy (BMN) - No news today, but check out Friday's Quarterly Activities Report and Quarterly Appendix 5B Cash Flow Report, US uranium stocks and Global X Uranium ETF (NYSE: URA) rallied on Friday, small rally in uranium futures price on COMEX
+3.6% Metals X (MLX) - Rebound in Tin price on Friday
Trading lower
-14.1% Talga Group (TLG) - Quarterly Activities/Appendix 5B Cash Flow Report and Successful A$9.5m institutional placement, fall is consistent with prevailing short and long term downtrends 🔎📉
-6.0% Fletcher Building (FBU) - Fletcher Building Provides Golden Bay Shipping Update, fall is consistent with prevailing long term downtrend 🔎📉
-5.2% Alkane Resources (ALK) - No news since Thursday's Quarterly Activities Report, fall is consistent with prevailing short and long term downtrends 🔎📉
-4.9% Mesoblast (MSB) - No news since 23 July FDA Accepts Mesoblast's BLA Resubmission for Remestemcel-L, customary wild volatility on this stock!
-4.4% Boss Energy (BOE) - Response to Media Speculation, fall is consistent with prevailing short and long term downtrends 🔎📉
-4.3% Cettire (CTT) - No news, fall is consistent with prevailing long term downtrend 🔎📉
-4.3% Vulcan Energy Resources (VUL) - Quarterly Activities Report - Period Ending 30 June 2024 and Quarterly Cashflow Report - Period Ending 30 June 2024
-3.9% Audinate Group (AD8) - No news, fall is consistent with prevailing long term downtrend 🔎📉
-3.8% Johns Lyng Group (JLG) - No news, fall is consistent with prevailing long term downtrend 🔎📉
Broker Notes
Abacus Group (ABG)
Downgraded to neutral from overweight at JP Morgan; Price Target: $1.25 from $1.30
Capitol Health (CAJ)
Retained at outperform at Macquarie; Price Target: $0.32
Challenger (CGF)
Upgraded to neutral from sell at Citi; Price Target: $6.95 from $6.65
Capricorn Metals (CMM)
Retained at buy at Argonaut Securities; Price Target: $7.00 from $6.70
Retained at neutral at Goldman Sachs; Price Target: $5.25
Retained at overweight at Jarden; Price Target: $5.30 from $5.10
Retained at neutral at Macquarie; Price Target: $5.30 from $5.10
Charter Hall Retail Reit (CQR)
Upgraded to overweight from neutral at JP Morgan; Price Target: $4.00 from $3.90
Goodman Group (GMG)
Downgraded to underweight from neutral at JP Morgan; Price Target: $32.00 from $31.00
HMC Capital (HMC)
Downgraded to neutral from overweight at JP Morgan; Price Target: $7.50 from $7.25
Integral Diagnostics (IDX)
Retained at outperform at Macquarie; Price Target: $2.85
JB HI-FI (JBH)
Downgraded to sell from neutral at UBS; Price Target: $60.00 from $59.00
Johns Lyng Group (JLG)
Retained at outperform at Macquarie; Price Target: $7.40
Mineral Resources (MIN)
Upgraded to outperform from hold at CLSA; Price Target: $60.00 from $75.00
Retained at Jarden; Price Target: $44.70 from $48.50
Retained at neutral at Macquarie; Price Target: $60.00 from $61.00
Retained at Morgan Stanley; Price Target: $79.00
Retained at RBC Capital Markets; Price Target: $78.00 from $75.00
Retained at UBS; Price Target: $54.00
Newmont Corporation (NEM)
Retained at outperform at Macquarie; Price Target: $85.00 from $81.00
NIB (NHF)
Retained at neutral at Macquarie; Price Target: $7.50
Propel Funeral Partners (PFP)
Downgraded to neutral from positive at E&P; Price Target: $5.68 from $5.47
Regis Resources (RRL)
Retained at outperform at Macquarie; Price Target: $2.70 from $2.90
Seek (SEK)
Downgraded to hold from outperform at CLSA; Price Target: $21.00 from $26.00
Sandfire Resources (SFR)
Retained at outperform at Macquarie; Price Target: $10.00 from $11.20
Upgraded to accumulate from hold at Ord Minnett; Price Target: $9.65 from $9.45
Scans
Carl has over 30-years investing experience, helping investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.
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