Evening Wrap: ASX 200 notches gain as gold, copper stocks prosper. Lendlease up as concedes defeat, Neuren soars on trial success

The S&P/ASX 200 closed 60.7 points higher, up 0.79%.

A gain is a gain. 60.7 points. We'll take it.

Just try not to think about the fact those 60.7 points didn't recoup Friday's falls, nor anywhere near last week's total losses!

Gold stocks bounced back today, but were largely not joined by the rest of the Resources sector with iron ore, lithium, and uranium stocks generally suffering. Key copper stocks were nicely higher, though.

Beaten down Lendlease (LLC) got a boost on the announcement it's conceding defeat in its overseas operations, and Neuren Pharmaceuticals Ltd (NEU) soared on positive news a Phase 2 trial aimed at treating Pitt Hopkins syndrome showed "significant improvements".

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 60.7 points higher at 7,788.3, 0.70% from its session ow and just 0.06% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by a resounding 213 to 63.

The Gold (XGD) (+1.9%) sub-index was the best performing sector today. There weren't any clear drivers for the sector as both gold and silver prices were muted on Friday. We are however, seeing very modest gains in Asian trading, and with US markets on holiday Monday for Memorial day, perhaps the market is perceiving a free pass.

It might also be perceiving/guessing/forecasting/jumping the gun that key chart resistance around current prices for each precious metal are going to hold. See COMEX silver futures chart below as a case in point...

Can silver hold the demand zone, and therefore setup to challenge recent highs?

More generally, one could argue that it was the Resources (XJR) (+1.8%) sector that stood out today (given the XGD is a sub-sector of Resources).

At the top line, it did appear to be a very good day for the sector, but dig a little deeper and it was far from a unanimous vote of confidence. I note that outside of gold and silver, several other areas of resources such as iron ore, lithium, and uranium had generally tough sessions.

Outside of gold it was tough going for Aussie Resources stocks today...

Also doing well today was the Real Estate Investment Trusts (XPJ) (+1.6%) sector. Lower market rates, particularly locally, helped, but big gains in Lendlease Group (ASX: LLC) and HMC Capital (ASX: HMC) were mostly to blame for the strength here (see Interesting Moves section below for more info on each) . Still, as you can see from the table below, sector gains were broad.

Broad-based gains for property today, led by LLC and HMC

Just one of the 11 major ASX sectors was in the black today, Energy (XEJ) (-0.22%) sector. A sharp decline in natural gas futures in the USA on Friday might be to blame here, or it could simply be a case of follow the prevailing downtrends present in the vast majority of stocks in the sector.

ChartWatch

Nasdaq Composite Index

Nothing short of little green men landing on the Whitehouse lawn...

We last covered the COMP in ChartWatch in the Evening Wrap on 21 May. Since then, it’s been business as usual with the exception of a major supply-side outlier in the form of Thursday’s candle.

That long black candle (after a gap up open) looked bad (as in really bad!) but then poof – it appears it’s come to nothing. Let’s put it down to just another COMP speed wobble, or at least that’s the conclusion we must draw after Friday’s demand-side candle which went most of the way to negating the Thursday blip.

Clearly, it’s going to take a wall of dedicated supply to change the short term uptrend here, and what seems like unimaginable excess supply to change the long term uptrend. Where is it going to come from in a market so dedicated to buy and hold, and why?

That’s a question for value investors and bears – not for little old trend following me!

I concede the candle that kicks it all off could print tonight. This is because the future is unknown and literally anything can happen (e.g. little green men landing on the Whitehouse lawn). In the meantime, our new alien overlords aside – the status quo is a wall of excess demand.

16450-16539 is the closest major point of demand. Dynamic demand from the short term uptrend ribbon is not far below it, and together create an important delineator of short term uptrend from downtrend.

S&P/ASX 200 (XJO)

Ok, finally an up day = let's take a look at the XJO

21 May was also the last time we covered this one. (I really didn’t want to look at this chart much last week 😒! But I’ll happily look at it today though!)

As much as we’ll take today’s 60.7 point gain, and the nice white candle that comes with it, it leaves us with plenty of work still to do to overcome the convincing showing of supply-side dominance witnessed last week.

It’s encouraging to see that the 7714 point of demand has so far held – today’s move makes it even more important as a delineator (my favourite new word today!) of short term uptrend from short term downtrend.

A close beneath 7714 potentially sets us up for deeper falls to probe historical demand at 7556 and the dynamic demand of the long term uptrend ribbon.

Looking up, and I believe we still have every reason to do so, 7900-7911 is a clearly important and stubborn zone of supply. We need to close above it – it really is that simple.

If we can, then an 8 handle beckons 🤞.

Economy

Today

• There weren't any major economic data announcements in our time zone today.

• Note , US markets are closed Monday for Memorial Day

Later this week

Tuesday

• 11:30 AUS Retail Sales April (+0.3% forecast vs -0.4% March)

Wednesday

• 00:00 USA Consumer Confidence May (96.1 forecast vs +97.0 April)

• 11:30 AUS Consumer Price Index (CPI) April (+3.4% p.a. forecast vs +3.5% p.a. March)

Thursday

• 11:30 AUS Building Approvals April (+1.8% m/m forecast vs +1.9% m/m March)

• 22:30 USA Prelim GDP March (+1.3% q/q forecast vs +1.6% q/q December)

Friday

• 00:00 USA Pending Home Sales April (+0.1% m/m forecast vs +3.4% m/m March)

• 11:30 CHN Manufacturing PMI May (50.4 forecast vs 50.4 April)

• 11:30 CHN Non-Manufacturing PMI May (51.5 forecast vs 51.2 April)

• 19:30 EUR Core CPI Flash Estimate May (+2.5% p.a. forecast vs +2.4% p.a. April)

• 22:30 USA Core PCE Price Index April (+0.2% m/m and +2.8% p.a. forecast vs +0.3% m/m and +2.8% p.a. March)

Latest News

Interesting Movers

Trading higher

• +15.7% Neuren Pharmaceuticals (NEU) - Investor presentation, 27 May 2024 and Phase 2 trial shows significant improvements in Pitt Hopkins, rise is consistent with prevailing short and long term uptrends 🔎📈

• +13.1% 4DS Memory (4DS) - No news, closed back above long term trend ribbon 🔎📈

• +10.1% Cettire (CTT) - Response to Media Article

• +8.0% Lendlease Group (LLC) - Lendlease Strategy Update

• +7.3% Myer Holdings (MYR) - No news 🤔

• +5.9% 29METALS (29M) - No news, did enjoy some positive broker commentary and ratings / price target changes last week, see HERE

• +5.6% Rpmglobal Holdings (RUL) - Extension of On-Market Share Buy-back (2024-25), rise is consistent with prevailing short and long term uptrends 🔎📈

• +4.8% HMC Capital (HMC) - Successful Completion of $100 Million Placement, as well as two price target increases at the brokers, see Broker Notes section below

• +4.8% Sayona Mining (SYA) - Moblan drilling delivers thick, high-grade intersections, rise is consistent with prevailing short term uptrend 🔎📈

• +4.5% OFX Group (OFX) - CEO share trading, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈

• +4.4% Ingenia Communities Group (INA) - Trading and Guidance Update, rise is consistent with prevailing short term uptrend 🔎📈

• +4.4% Emerald Resources (EMR) - No news, generally stronger ASX gold sector today, rise is consistent with prevailing short term uptrend 🔎📈

• +4.3% Droneshield (DRO) - No news, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈

Trading lower

• -9.6% Vulcan Energy Resources (VUL) - Managing Director & CEO's Amended AGM Presentation

• -6.4% Audinate Group (AD8) - Resignation of Chief Financial Officer, at risk of closing below long term uptrend ribbon 🔎📉

• -6.0% Nickel Industries (NIC) - No news, closed below short term uptrend ribbon 🔎📉

• -5.8% Mayne Pharma Group (MYX) - No news, likely continued negative fallout from Friday's Mayne Pharma Market Update, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, long term trend is transitioning from up to down 🔎📉

• -4.7% Strike Energy (STX) - No news, fall is consistent with prevailing short term downtrend 🔎📉

• -4.4% Regis Healthcare (REG) - No news 🤔

• -3.8% Latin Resources (LRS) - No news, generally weaker ASX lithium sector today

• -3.3% Botanix Pharmaceuticals (BOT) - No news 🤔

• -3.2% Silex Systems (SLX) - No news, generally weaker ASX uranium sector today

Broker Notes

• AIC Mines (A1M)

  • Retained at buy at Ord Minnett; Price Target: $0.65 from $0.85

  • Retained at buy at Shaw and Partners; Price Target: $1.20 from $0.90

• The A2 Milk Company (A2M) retained at buy at Citi; Price Target: $7.85

• ANZ Group Holdings (ANZ) retained at sell at Citi; Price Target: $24.50

• ASX (ASX) retained at underweight at Morgan Stanley; Price Target: $53.50

• Bluescope Steel (BSL) retained at neutral at Citi; Price Target: $24.00 from $24.50

• Brambles (BXB) retained at buy at UBS; Price Target: $17.30

• Commonwealth Bank of Australia (CBA) retained at sell at Citi; Price Target: $85.00

• Collins Foods (CKF) retained at add at Morgans; Price Target: $11.50 from $12.40

• Cromwell Property Group (CMW) retained at accumulate at Ord Minnett; Price Target: $0.66 from $0.56

• Coles Group (COL) retained at buy at Citi; Price Target: $19.00

• Evolution Mining (EVN) upgraded to overweight from neutral at JP Morgan; Price Target: $4.20 from $4.10

• Fletcher Building (FBU) retained at sell at Citi; Price Target: NZ$3.10

• HMC Capital (HMC)

  • Retained at hold at Bell Potter; Price Target: $7.40 from $7.30

  • Retained at sell at CLSA; Price Target: $5.99 from $5.24

  • Retained at overweight at JP Morgan; Price Target: $7.25 from $7.00

  • Retained at neutral at Macquarie; Price Target: $6.76

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.05

  • Retained at neutral at UBS; Price Target: $6.95

• IDP Education (IEL) retained at neutral at UBS; Price Target: $17.65

• Imdex (IMD) retained at neutral at Citi; Price Target: $2.00

• Ingenia Communities Group (INA) retained at buy at Citi; Price Target: $5.30

• Lendlease Group (LLC)

  • Retained at neutral at Citi; Price Target: $6.90

  • Retained at neutral at UBS; Price Target: $7.10

• Latin Resources (LRS) retained at buy at Bell Potter; Price Target: $0.40

• Mirvac Group (MGR) retained at neutral at Citi; Price Target: $2.10 from $2.30

• National Australia Bank (NAB) retained at sell at Citi; Price Target: $26.50

• New Hope Corporation (NHC) initiated at hold at Bell Potter; Price Target: $4.70

• Nickel Industries (NIC) retained at buy at UBS; Price Target: $1.10

• Northern Star Resources (NST) upgraded to overweight from neutral at JP Morgan; Price Target: $15.50 from $13.25

• Nufarm (NUF)

  • Downgraded to neutral from buy at Citi; Price Target: $4.80 from $5.80

  • Retained at hold at Morgans; Price Target: $5.22 from $5.40

• NRW Holdings (NWH) upgraded to buy from hold at Argonaut Securities; Price Target: $3.15

• Pantoro (PNR) retained at hold at Bell Potter; Price Target: $0.10 from $0.08

• Sandfire Resources (SFR) retained at outperform at Macquarie; Price Target: $10.80

• Treasury Wine Estates (TWE) retained at buy at UBS; Price Target: $15.25

• Westpac Banking Corporation (WBC) retained at sell at Citi; Price Target: $24.75

• Woolworths Group (WOW) retained at buy at Citi; Price Target: $39.00

• Xero (XRO) downgraded to marketweight from overweight at Wilsons; Price Target: $131.63 from $126.93

Scans