Evening Wrap: ASX 200 lower as consumer stocks dumped and CBA disappoints, lithium stocks resurgence continues

A series of worse than expected trading updates has hobbled consumer stocks like Baby Bunting (BBN), Temple & Webster (TPW), Super Retail Group (SUL), and JB Hi-Fi (JBH).

Banks were dragged lower by a combination of Westpac's (WBC) ed-dividend (harmless) and Commbank's (CBA) disappointing Q3 update (less harmless).

Somehow, don't ask me how or why, lithium stocks continue their recent resurgence. Who would have thought it!?

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 82.9 points lower at 7,721.6, 1.07% from its session high and just 0.08% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by 66 to 219.

In an almost exact about face from yesterday, 8 of the 11 major ASX sectors were down.

The was the best performing of the bunch was (a little surprisingly given recent form) the Energy (XEJ) (+0.56%) sector as oil prices put in one of those demand-side candles at the long term uptrend ribbon I often talk about!

For once, uranium stocks didn't top this sector's performance table, with traditional carbon-based energy producers like Woodside Energy (ASX: WDS) and Santos (ASX: STO) accounting for the bulk of the sector's gains.

Oil and gas producers did well, but uranium stocks generally broke their winning streak today.

Doing it the toughest today was the Consumer Discretionary (XDJ) (-2.6%) sector. We're at that point where many companies are issuing trading updates post-March quarter, but also to manage investor expectations ahead of full year results which for most companies are pegged at June 30.

Baby Bunting (ASX: BBN) (-23.4%) (BBN Trading Update), Temple and Webster (ASX: TPW) (-17.9%) (TPW Trading Update), Super Retail Group (ASX: SUL) (-5.5%) (SUL Trading Update), and JB Hi-Fi (ASX: JBH) (-4.5%) (JBH Trading Update) were each crunched after reporting their own version of slowing rates of sales growth during the March quarter.

Also down harder than most was the Financials (XFJ) (-1.7%) sector. This was due to a combination of Westpac Banking Corporation (ASX: WBC) going ex-dividend 90 cents fully franked (harmless), but also a 2.2% drop in Commonwealth Bank of Australia (ASX: CBA) triggered by a negative response to its March Quarter 2024 Trading Update.

ChartWatch

S&P/ASX 200 (XJO)

A frustrating development, but still only a modest pullback vs the recent rally

Today's +1% decline possibly sounds worse than it looks on the daily chart above (some of it was Westpac's dividend).

Yes, there's a black candle with a close very near the low – unmistakably indicative of supply side control during the session – but it has only delivered a modest blow to the rally from 7556, and more broadly, from the test and bounce off the long term trend ribbon at 7492.

I'll be more concerned if the XJO closes below the dynamic support expected at the short term trend ribbon which kicks in between 7694-96, but really, as long as the price remains above 7492-7556 the long term uptrend is intact.

7815 is now supply, but there's a well defined band of supply now between 7853 and 7911. Until we close above there, volatility like that we've experienced in the last few candles is likely here to stay.

Big bets one way or the other while we're chopping around in the range is for the bravest of prognosticators only – and I am definitely not one of those!

Economy

Today

• CHINA Trade Data

  • China exports grew 1.5% year-on-year in April by value, in line with economists’ forecasts – a nice turnaround from March's 7.5% decline

  • China imports surged 8.4%, well ahead of economists’ expectations for a 4.8% gain, and reversing March’s 1.9% decline

  • Iron ore imports were up 1.1% in April as some buyers chose to take advantage of the dip in prices

Later this week

Friday

• 03:00 USA 30 year bond auction

Saturday

• USA Preliminary University of Michigan Consumer Sentiment

  • Expected -0.9% to 76.3% vs -0.9% to 77.2% in April

Latest News

Interesting Movers

Trading higher

• +16.9% Galan Lithium (GLN) - No news, general inexplicable strength in lithium sector tipped here yesterday continues!

• +12.5% Cooper Energy (COE) - Possible delayed response to 2024 Cooper Energy investor briefing, general stronger energy sector today on bounce in crude oil price, rise is consistent with prevailing short and long term uptrends 🔎📈

• +9.8% Ioneer (INR) - No news, general inexplicable strength in lithium sector tipped here yesterday continues! Rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up, closed above long term trend ribbon 🔎📈

• +9.5% Chalice Mining (CHN) - No news, tagging along with lithium!

• +8.1% Sayona Mining (SYA) - No news, general inexplicable strength in lithium sector tipped here yesterday continues!

• +7.8% Global Lithium Resources (GL1) - Change of Director's Interest Notice - D Chen, general inexplicable strength in lithium sector tipped here yesterday continues!

• +6.8% Strike Energy (STX) - Macquarie Australia Conference, generally stronger energy sector today on bounce in crude oil price

• +5.7% Silver Mines (SVL) - No news, tidy bounce in silver price

• +5.3% Liontown Resources (LTR) - No news, general inexplicable strength in lithium sector tipped here yesterday continues!

• +4.5% Vulcan Energy Resources (VUL) - No news, general inexplicable strength in lithium sector tipped here yesterday continues!

• +4.2% SRG Global (SRG) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -23.4% Baby Bunting Group (BBN) - Trading Update, fall is consistent with prevailing short and long term downtrends 🔎📉

• -17.9% Temple & Webster Group (TPW) - Trading Update

• -9.8% Nexgen Energy (NXG) - Material Change Report, closed below short term uptrend ribbon 🔎📉

• -8.4% Avita Medical Inc (AVH) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -7.0% Brainchip Holdings (BRN) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.7% Imugene (IMU) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.3% Adairs (ADH) - No news, dragged lower by peers' trading updates, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, closed below long term uptrend ribbon 🔎📉

• -6.1% Smartgroup Corporation (SIQ) - Continued negative response to yesterday's 2024 AGM Presentation Materials, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, closed below long term uptrend ribbon 🔎📉

• -5.6% Coronado Global Resources (CRN) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -5.4% Super Retail Group (SUL) - Trading Update, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, long term trend is transitioning from up to down 🔎📉

• -5.1% Westpac Banking Corporation (WBC) - Ex-dividend 90 cents fully franked

• -4.5% Nick Scali (NCK) - Nick Scali Completion of UK Acquisition, dragged lower by peers' trading updates, closed below short term uptrend ribbon 🔎📉

• -4.5% JB HI-FI (JBH) - Sales Update, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, touched long term uptrend ribbon 🔎📉

• -4.5% ARB Corporation (ARB) - Issued its own Market Update yesterday, dragged lower by peers' trading updates, closed below short term uptrend ribbon 🔎📉

Broker Notes

• AIC Mines (A1M)

  • Retained at buy at Shaw and Partners; Price Target: $0.90

• Alpha HPA (A4N)

  • Retained at buy at Bell Potter; Price Target: $1.95 from $1.75

• Aussie Broadband (ABB)

  • Downgraded to accumulate from buy at Ord Minnett; Price Target: $4.19 from $4.16

• AGL Energy (AGL)

  • Retained at accumulate at Ord Minnett; Price Target: $11.50

• ARB Corporation (ARB)

  • Retained at equal-weight at Morgan Stanley; Price Target: $35.50

  • Upgraded to buy from accumulate at Ord Minnett; Price Target: $44.00 from $42.50

• Aurizon Holdings (AZJ)

  • Retained at neutral at Macquarie; Price Target: $3.73 from $3.85

• Black Cat Syndicate (BC8)

  • Retained at buy at Shaw and Partners; Price Target: $0.74

• Boral (BLD)

  • Retained at hold at Ord Minnett; Price Target: $5.10

• Commonwealth Bank of Australia (CBA)

  • Retained at sell at UBS; Price Target: $105.00

• Domain Holdings Australia (DHG)

  • Retained at buy at Bell Potter; Price Target: $3.75

  • Retained at neutral at Goldman Sachs; Price Target: $3.60 from $3.50

  • Retained at lighten at Ord Minnett; Price Target: $2.60 from $2.50

• Flight Centre Travel Group (FLT)

  • Retained at sell at Goldman Sachs; Price Target: $18.30

• Goodman Group (GMG)

  • Retained at outperform at Macquarie; Price Target: $36.37 from $34.84

  • Retained at overweight at Morgan Stanley; Price Target: $35.65 from $35.30

• GPT Group (GPT)

  • Retained at equal-weight at Morgan Stanley; Price Target: $4.70

• Helia Group (HLI)

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

• Iluka Resources (ILU)

  • Downgraded to neutral from overweight at JP Morgan; Price Target: $8.20

• Imdex (IMD)

  • Downgraded to sell from hold at Bell Potter; Price Target: $1.60 from $1.75

• Jumbo Interactive (JIN)

  • Retained at neutral at Macquarie; Price Target: $17.15

  • Retained at overweight at Morgan Stanley; Price Target: $20.80

  • Retained at lighten at Ord Minnett; Price Target: $13.10

• Arcadium Lithium (LTM)

  • Retained at outperform at Macquarie; Price Target: $9.40 from $10.00

• Nine Entertainment Co. Holdings (NEC)

  • Retained at buy at Goldman Sachs; Price Target: $2.10 from $2.00

• Origin Energy (ORG)

  • Retained at equal-weight at Morgan Stanley; Price Target: $9.26

• Paradigm Biopharmaceuticals (PAR)

  • Retained at buy at Bell Potter; Price Target: $0.47 from $1.40

• Polynovo (PNV)

  • Retained at sell at Ord Minnett; Price Target: $1.00

• Perpetual (PPT)

  • Retained at overweight at Morgan Stanley; Price Target: $26.10

  • Retained at accumulate at Ord Minnett; Price Target: $26.00

• PSC Insurance Group (PSI)

  • Retained at overweight at Morgan Stanley; Price Target: $5.85

• Pexa Group (PXA)

  • Retained at accumulate at Ord Minnett; Price Target: $17.25

• Siteminder (SDR)

  • Retained at overweight at Morgan Stanley; Price Target: $6.80 from $6.45

• Smartgroup Corporation (SIQ)

  • Retained at buy at Bell Potter; Price Target: $11.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $9.50

  • Retained at neutral at Ord Minnett; Price Target: $10.50 from $10.60

• Super Retail Group (SUL)

  • Retained at buy at Citi; Price Target: $19.00

  • Retained at buy at Goldman Sachs; Price Target: $17.80

  • Retained at neutral at Jarden; Price Target: $15.10 from $15.40

  • Retained at hold at Jefferies; Price Target: $12.40 from $13.00

  • Retained at neutral at JP Morgan; Price Target: $16.00 from $16.10

  • Retained at underweight at Morgan Stanley; Price Target: $14.09

• Seven Group (SVW)

  • Retained at lighten at Ord Minnett; Price Target: $32.00 from $30.50

• Seven West Media (SWM)

  • Retained at sell at Goldman Sachs; Price Target: $0.21 from $0.24

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