The ASX 200 held its ground as a Citi upgrade of NAB triggered a broad bank rally that offset sharp falls in gold, energy, and technology stocks following the US Federal Reserve's decision to raise its official cash rate overnight. Yesterday's winners became today's losers; yesterday's losers, today's winners (and the OTP dance continues!!! 🤦).
Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap. Also, I have detailed technical analysis on the Nasdaq Composite and the S&P/ASX 200 in today's ChartWatch.
Let’s dive in!
Today in Review
Name | Value | % Chg |
|---|---|---|
Major Indices | ||
| ASX 200 | 8,732.4 | +0.41% |
| All Ords | 8,910.9 | +0.41% |
| Small Ords | 3,363.5 | +0.19% |
| All Tech | 2,769.4 | +0.14% |
| Emerging Companies | 3,025.8 | +0.60% |
Currency | ||
| AUD/USD | 0.7118 | +0.44% |
US Futures | ||
| S&P 500 | 7,622.0 | -0.44% |
| Dow Jones | 51,904.0 | -0.02% |
| Nasdaq | 29,263.75 | +0.06% |
Name | Value | % Chg |
|---|---|---|
Sector | ||
| Financials | 9,182.4 | +1.42% |
| Health Care | 32,018.7 | +0.98% |
| Real Estate | 3,234.4 | +0.66% |
| Industrials | 7,968.1 | +0.57% |
| Communication Services | 1,563.2 | -0.03% |
| Consumer Staples | 12,966.7 | -0.03% |
| Consumer Discretionary | 3,490.8 | -0.15% |
| Utilities | 10,245.0 | -0.23% |
| Materials | 23,838.7 | -0.38% |
| Information Technology | 1,628.3 | -0.98% |
| Energy | 11,113.7 | -1.10% |
ASX 200 Intraday Chart
%20intraday%20chart_17%20Sep.png)
Markets
The S&P/ASX 200 (XJO) finished 35.9 points higher at 8,732.4, 0.63% from its session low and 0.41% from its high. Despite what appeared to be a solid gain on the benchmark today, in the broader-based S&P/ASX 300 (XKO) advancers beat decliners by a narrow 146 to 130.
Financials (XFJ) (+1.4%) was the session's standout and the driver was specific — Citi upgraded National Australia Bank to Buy from Neutral and lifted its price target to $42.10 from $40. With the US Fed hiking rates overnight and US bank stocks selling off sharply in response, so one can only assume that the upgrade was the decisive differentiator that kept local bank sentiment positive.
National Australia Bank (NAB) (+3.2%) surged directly on the call, and the positive read-through to its peers was immediate — ANZ (ANZ) (+2.1%), Commonwealth Bank (CBA) (+1.6%), and Westpac (WBC) (+1.2%) each gained more than 1%, providing the index with the ballast it needed to avoid another down session.
%20intraday%20chart_17%20Sep.png)
S&P/ASX 200 Financials Sector Index intraday chart
Health Care (XHJ) (+1.0%) continued its remarkable September run, its defensive earnings characteristics finding favour regardless of whether the broader market is selling off or rallying. Non-cyclical revenue streams insulated from the rate cycle have been in consistent demand since the inflation shock began, and today was no exception. Telix Pharmaceuticals (TLX) (+3.4%), Cogstate (CGS) (+3.1%), Pro Medicus (PME) (+2.4%), CSL (CSL) (+1.8%), and Ansell (ANN) (+1.2%) all advanced.
%20intraday%20chart_17%20Sep.png)
S&P/ASX 200 Health Care Sector Index intraday chart
The Gold Sub-Index (XGD) (-2.0%) told the Fed's story most directly. Gold had been trading higher in anticipation of the decision — a classic "buy the rumour" positioning — then reversed sharply after Fed Chair Kevin Warsh's post-FOMC press conference signalled the committee was not done, and that market pricing of further hikes was well-founded.
Higher official rates in the US raise the opportunity cost of holding non-yielding gold, and the market repriced accordingly. COMEX gold futures gained 1.3% overnight before sliding 0.9% to US$4,350/oz in Asian trade as the dust settled. Pantoro Gold (PNR) (-7.4%), Santana Minerals (SMI) (-4.8%), Ramelius Resources (RMS) (-4.1%), and Capricorn Metals (CMM) (-3.4%) were all sharply lower.
Materials (XMJ) (-0.4%) was modestly negative at the headline level but split three ways internally. Base metals stocks bore the brunt of the risk-off mood following the Fed hike — South32 (S32) (-3.4%) and Nickel Industries (NIC) (-2.5%) both fell despite modest overnight LME gains, the Fed's signal of further hikes dampening appetite for cyclicals.
Small-cap copper plays bucked the trend — Aurelia Metals (AMI) (+7.0%), AIC Mines (A1M) (+3.2%), and Cobre (CBE) (+1.4%) all found buyers as COMEX copper gained 0.5% in Asian trade after rising 1.0% overnight. Iron ore stocks logged a second consecutive day of gains as SGX iron ore futures added 0.4% to US$96.30/t — Champion Iron (CIA) (+2.3%) and Fortescue (FMG) (+1.3%) were both firmer.
%20intraday%20chart_17%20Sep.png)
S&P/ASX 200 Materials Sector Index intraday chart
Energy (XEJ) (-1.1%) reversed yesterday's strong gains as ICE Brent crude futures fell 2.7% overnight before dropping a further 1.7% to US$104.00/bbl in Asian trade. Beach Energy (BPT) (-3.3%), Karoon Energy (KAR) (-2.6%), Santos (STO) (-1.8%), and Woodside Energy (WDS) (-0.9%) led oil and gas lower. Coal stocks tracked crude — Yancoal Australia (YAL) (-1.8%) and Whitehaven Coal (WHC) (-1.4%) were both softer.
Information Technology (XIJ) (-1.0%) tracked the Nasdaq lower as benchmark bond yields rose following the Fed hike — the by-now familiar dynamic where higher risk-free rates compress the present value of long-duration, high-P/E growth stock earnings. NextDC (NXT) (-2.9%), Life360 (360) (-1.4%), Xero (XRO) (-1.3%), and WiseTech Global (WTC) (-1.2%) were all lower.
%20intraday%20chart_17%20Sep.png)
S&P/ASX 200 Information Technology Sector Index intraday chart
In other commodities moves, GFEX lithium carbonate futures in China rebounded 4.3% to CNY 131,180/t — a welcome commodity price recovery after a brutal September stretch that had taken the contract to its lowest close of the calendar year. Yet local lithium stocks conspicuously failed to participate, their inability to rally despite the commodity's move suggesting positioning and sentiment headwinds remain entrenched. Elevra Lithium (ELV) (-4.1%), Vulcan Energy Resources (VUL) (-2.2%), IGO (IGO) (-1.7%), Liontown Resources (LTR) (-1.0%), and Pilbara Minerals (PLS) (-0.7%) were all lower despite the positive price lead.
Lithium Carbonate Futures (Benchmark month, back-adjusted) GFEX
Today's best ASX Top 300 gainers
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
| Electro Optic Systems Holdings (EOS) | $10.00 | +$0.74 | +8.0% | +18.1% | +31.2% |
| Dyno Nobel (DNL) | $4.16 | +$0.30 | +7.8% | +12.1% | +42.5% |
| 4DMedical (4DX) | $3.80 | +$0.26 | +7.3% | +4.4% | +102.1% |
| DroneShield (DRO) | $1.735 | +$0.11 | +6.8% | -11.5% | -45.8% |
| PYC Therapeutics (PYC) | $2.40 | +$0.15 | +6.7% | +12.2% | +189.1% |
| Sunrise Energy Metals (SRL) | $18.44 | +$1.11 | +6.4% | +4.6% | +265.9% |
| IperionX (IPX) | $2.72 | +$0.16 | +6.3% | -17.3% | -58.9% |
| Austal (ASB) | $4.59 | +$0.25 | +5.8% | +5.3% | -41.2% |
| SKS Technologies Group (SKS) | $7.99 | +$0.43 | +5.7% | -15.9% | +131.6% |
| Benz Mining Corp (BNZ) | $4.37 | +$0.20 | +4.8% | +17.5% | +164.0% |
| Tuas (TUA) | $2.24 | +$0.10 | +4.7% | +0.9% | -70.1% |
| Virgin Australia Holdings (VGN) | $2.73 | +$0.11 | +4.2% | 0.0% | -18.0% |
| ASX (ASX) | $55.31 | +$2.20 | +4.1% | -5.1% | -8.7% |
| Regis Healthcare (REG) | $4.80 | +$0.19 | +4.1% | -22.2% | -47.0% |
| Elsight (ELS) | $4.82 | +$0.19 | +4.1% | -26.3% | +185.2% |
| St Barbara (SBM) | $0.89 | +$0.03 | +3.5% | +52.1% | +93.5% |
| Nufarm (NUF) | $3.27 | +$0.11 | +3.5% | +12.8% | +36.8% |
| Southern Cross Electrical Engineering (SXE) | $4.20 | +$0.14 | +3.4% | -11.6% | +101.9% |
| Telix Pharmaceuticals (TLX) | $17.45 | +$0.58 | +3.4% | +4.3% | +25.4% |
| Lindian Resources (LIN) | $0.62 | +$0.02 | +3.3% | -26.2% | +153.1% |
Today's worst ASX Top 300 losers
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
| Light & Wonder Inc. (LNW) | $113.57 | -$10.11 | -8.2% | -16.4% | -15.0% |
| Pantoro Gold (PNR) | $2.61 | -$0.21 | -7.4% | +7.9% | -49.4% |
| West African Resources (WAF) | $3.52 | -$0.28 | -7.4% | +3.8% | +15.8% |
| PDI Gold (PDI) | $4.37 | -$0.28 | -6.0% | +9.3% | +133.1% |
| Forrestania Resources (FRS) | $0.36 | -$0.02 | -5.3% | -6.5% | +60.0% |
| Ryman Healthcare (RYM) | $1.575 | -$0.075 | -4.5% | -7.9% | -30.9% |
| Centuria Capital Group (CNI) | $1.265 | -$0.06 | -4.5% | -15.7% | -44.3% |
| Ramelius Resources (RMS) | $3.47 | -$0.15 | -4.1% | -3.1% | -0.9% |
| Elevra Lithium (ELV) | $6.27 | -$0.27 | -4.1% | -31.8% | +86.1% |
| Sigma Healthcare (SIG) | $2.50 | -$0.09 | -3.5% | -16.1% | -16.1% |
| Capricorn Metals (CMM) | $14.41 | -$0.51 | -3.4% | -8.9% | +23.2% |
| South32 (S32) | $4.84 | -$0.17 | -3.4% | +1.7% | +84.0% |
| Kingsgate Consolidated (KCN) | $5.18 | -$0.18 | -3.4% | +8.4% | +81.1% |
| Beach Energy (BPT) | $0.87 | -$0.03 | -3.3% | +0.6% | -28.7% |
| Westgold Resources (WGX) | $5.36 | -$0.18 | -3.2% | -5.1% | +38.1% |
| Ora Banda Mining (OBM) | $1.425 | -$0.045 | -3.1% | +8.8% | +48.4% |
| MA Financial Group (MAF) | $4.89 | -$0.15 | -3.0% | -20.5% | -47.0% |
| Genesis Minerals (GMD) | $7.22 | -$0.22 | -3.0% | +0.6% | +36.2% |
| NEXTDC (NXT) | $11.06 | -$0.33 | -2.9% | -25.7% | -36.7% |
| Karoon Energy (KAR) | $1.845 | -$0.05 | -2.6% | +5.4% | +8.5% |
Chartwatch
Nasdaq Composite Index
Nasdaq Composite Index chart
Analysis
Some indecision there on the Comp last night. Up and down pointing shadows is a dead giveaway of a market that can't decide: in or out? Risk it or run for it? 🤷
The most interesting bit on the chart above is volume. The Fed hike pulled out some supply, i.e., the run for it crowd, which was insufficiently covered by the demand side, i.e., the risk it crowd.
But it wasn't a washout. 25910 was tested and held.
A bit of a non-event really. Nothing we weren't already prepared for vis à vis present portfolio positioning (i.e. 1/2RP).
I wouldn't read too much into Wednesday's candle. It's not screaming demand side control, but the downward pointing shadow and that volume pulse suggests it would be foolish to write off BTD just yet...
But nor is it a resounding vote of confidence for the bull case, either. No, I suggest it's more par for the course here: Short term equilibrium vs Long term excess demand.
Status quo. Steady as she goes. As you were!
(Can I say, the far more interesting chart was of the RUT! 👇 HELLO long term trend ribbon!)
%20chart_16%20Sep.png)
Russell 2000 Index (RUT) chart
View
1/2RP. (RP = Risk Position — it reflects my personal allowable capital allocation limit for my investments in US stocks. So 1/2RP is 50%, 2/3RP is 67% and FRP is 100%).
Key Levels
26701-863 is the closest key point of supply vs 25910 as the closest key point of demand, and then the long term trend ribbon (presently 24321-25198).
S&P/ASX 200 (XJO)
%20chart_17%20Sep.png)
S&P/ASX 200 (XJO) chart
Analysis
Juicy.
US banks sold off after the Fed hike and statement. Order of magnitude, 2-3% among Bank of America, Citigroup, and Wells Fargo… and 1% at JP Morgan.
I can’t help but feel that some of that cash found its way over here. Hey, that cohort has been rising while ours have been falling, so perhaps a few bucks flowed back the other way? 🤔
Whatever the reason (we’ll never know), it was just one of those sessions where the banks were invincible, and apart from healthcare (which is just on such a winning streak right now) – almost everything else was a variation of lousy.
%20chart_17%20Sep.png)
S&P/ASX 200 Financials Sector Index chart – looked GONE yesterday, today... totally JUICY!!! 🧃
So, the OTP, in fine OTP style – was pushed and pulled in opposite directions – and ended up somewhere in between.
But… at one point… the candle did look very solid. Which demonstrates that there remains some demand about the place, even if only the juicing the big banks kind! 🧃🧃🧃
I mean, take out the banks, and it could have been: crack 8708-8656 sort of stuff. Crack 8708-8656 and it’s starting to feel like: this bull market is unequivocally over sort of stuff…⚠️🚨
So, I put to you that the Plunge Protection Team (PPT) did a fine job today.
View
I am 1/3RP on Australian shares (i.e., 67% cash vs 33% invested, with some of the invested portion allocated to shorts).
Key levels
8708-8656 is the critical zone of demand, while the long term trend ribbon (presently 8799- 8865) is the the biggest barrier the OTP will have to contend with on the way back up.
(Glossary of acronyms! Old Tin Pot (OTP): S&P/ASX 200 | MOTN: More Often Than Not | FOMO: Fear Of Missing Out | HOFU: Holding On For Upside | BTD: Buy The Dip | NUTE: No Urgency To Enter | FOHO: Fear Of Holding On | STR: Sell The Rally | RP: Risk Position | FFS: Fund Flow Shenanigans!)
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Economy
TODAY
No major economic data releases in our time zone today...
LATER THIS WEEK
THURSDAY
22:30 USA August Philadelphia Fed Manufacturing Index (28.9 forecast vs 47.4 in August)
FRIDAY
09:30 Bank of Japan (BOJ) Policy Rate (+0.25% p.a. forecast to 1.25% to 1.0% p.a.)
Interesting Movers
Trading higher
- Echo IQ (EIQ) $0.59+14.6%
Provided an update to the 8-Sep US Food & Drug Administration ("FDA") response to the company's application for clearance of its EchoSolv treatment. Management said that it believes there is a "clear path forward" to obtaining clearance and that it is
progressing this as a priority, "clearance could potentially be achieved over the coming quarters", it said. - Electro Optic Systems Holdings (EOS) $10.00+8.0%
No news. Performance reflected general strength in the broader defence sector.
- Boss Energy (BOE) $1.64+7.5%
- DroneShield (DRO) $1.74+6.8%
No news. Performance reflected general strength in the broader defence sector.
- Austal (ASB) $4.59+5.8%
No news. Performance reflected general strength in the broader defence sector.
- Bapcor (BAP) $0.82+4.5%
- ASX (ASX) $55.31+4.1%
UBS upgraded its rating on ASX to buy from neutral, citing recent share price pullback as improving value dynamics. Target was lowered, however, to $64.20 from $66.90.
- Wagners Holding Company (WGN) $4.18+4.0%
- National Australia Bank (NAB) $39.22+3.2%
Citi upgraded its rating on Nab to buy from neutral, citing the bank's strong business lending business. Target was also increased, to $42.10 from $40.
- WAM Global (WGB) $2.02+3.1%
- Arafura Rare Earths (ARU) $0.17+3.0%
- Metrics Master Income Trust (MXT) $1.80+2.9%
- MAAS Group Holdings (MGH) $5.66+2.5%
- Charter Hall Social Infrastructure REIT (CQE) $2.40+2.1%
- GR Engineering Services (GNG) $7.18+2.0%
Trading Lower
- Light & Wonder Inc. (LNW) $113.57-8.2%
Announced that the CEO of its SciPlay social casino business, Josh Wilson, will step down.
- Pantoro Gold (PNR) $2.61-7.5%
No news. Performance reflected general weakness in the broader gold sector as the gold price slumped early this morning after the Fed interest rate hike. Markets are pricing further hikes which is typically bearish for gold.
- West African Resources (WAF) $3.52-7.4%
No news. Performance reflected general weakness in the broader gold sector.
- PDI Gold (PDI) $4.37-6.0%
No news. Performance reflected general weakness in the broader gold sector.
- Elevra Lithium (ELV) $6.27-4.1%
- Beach Energy (BPT) $0.87-3.3%
- Westgold Resources (WGX) $5.36-3.3%
- MA Financial Group (MAF) $4.89-3.0%
Announced that it has secured a 50% interest in The Glen Shopping Centre for $327.5 million.
- Genesis Minerals (GMD) $7.22-3.0%
- NEXTDC (NXT) $11.06-2.9%
- Karoon Energy (KAR) $1.85-2.6%
- Flight Centre Travel Group (FLT) $10.76-2.5%
- Rox Resources (RXL) $0.59-2.5%
- Challenger (CGF) $10.04-2.3%
- EQ Resources (EQR) $0.46-2.2%
- Temple & Webster Group (TPW) $4.30-1.8%
- WAM Capital (WAM) $1.17-1.7%
- Australian Foundation Investment Company (AFI) $6.64-1.5%
- Whitehaven Coal (WHC) $8.16-1.4%
- Life360 Inc (360) $19.12-1.4%
- Block, Inc. (XYZ) $107.91-1.4%
Broker Moves
Company | Broker | Action | Rating | Price Target |
|---|---|---|---|---|
ALXAtlas Arteria | Macquarie | Upgraded | Outperform(from Neutral) | $4.75(from $4.90) |
ANZANZ Group Holdings | Citi | Retained | Buy | $41.00(from $39.25) |
ASXASX | UBS | Upgraded | Buy(from Neutral) | $64.20(from $66.90) |
CBACommonwealth Bank of Australia | Citi | Retained | Sell | $141.00(from $135.00) |
DMPDomino's Pizza Enterprises | Citi | Retained | Buy | $21.60 |
FHEFrontier Energy | Bell Potter | Retained | Speculative Buy | $0.30 |
GL1Global Lithium Resources | Shaw and Partners | Retained | Buy | $1.75 |
IFTInfratil | Citi | Retained | Buy | $15.18 |
JHXJames Hardie Industries Plc | Morgans | Upgraded | Accumulate(from Hold) | $43.00(from $45.00) |
| Ord Minnett | Retained | Accumulate | $46.00 | |
| UBS | Retained | Neutral | $45.00 | |
JINJumbo Interactive | Ord Minnett | Upgraded | Accumulate(from Hold) | $7.20(from $6.90) |
MI6Minerals 260 | UBS | Retained | Buy | $1.35(from $1.25) |
MM8Medallion Metals | Morgans | Retained | Buy | $1.11(from $0.99) |
MMIMetro Mining | Ord Minnett | Retained | Buy | $2.50 |
NABNational Australia Bank | Citi | Upgraded | Buy(from Neutral) | $42.10 |
OCLObjective Corporation | Ord Minnett | Downgraded | Hold(from Accumulate) | $8.50 |
RWCReliance Worldwide Corporation | Macquarie | Downgraded | Neutral(from Outperform) | $4.75 |
S32South32 | Citi | Retained | Buy | $6.00 |
SNLSupply Network | Ord Minnett | Retained | Buy | $41.00 |
TGNTungsten Mining NL | Canaccord Genuity | Initiated | Speculative Buy | $0.45 |
TLCThe Lottery Corporation | Morgans | Upgraded | Accumulate(from Hold) | $5.40(from $5.60) |
VCXVicinity Centres | Citi | Retained | Neutral | $2.70 |
| UBS | Retained | Neutral | $2.70 | |
WBCWestpac Banking Corporation | Citi | Retained | Neutral | $36.10 |
Scans
Top Gainers
Code | Company | Last | % Chg |
|---|---|---|---|
| LMG | Latrobe Magnesium Ltd | $0.019 | +35.71% |
| CVB | Curvebeam Ai Ltd | $0.032 | +28.00% |
| CTQ | Careteq Ltd | $0.019 | +26.67% |
| BDX | Bcal Diagnostics Ltd | $0.086 | +22.86% |
| MX1 | Micro-X Ltd | $0.017 | +21.43% |
Top Fallers
Code | Company | Last | % Chg |
|---|---|---|---|
| ERE | European Resources Ltd | $0.014 | -22.22% |
| ABX | ABX Group Ltd | $0.032 | -17.95% |
| GUL | Gullewa Ltd | $0.072 | -16.28% |
| NDO | Nido Education Ltd | $0.22 | -15.39% |
| RAP | Raptor Metals Ltd | $0.023 | -14.82% |
52 Week Highs
Code | Company | Last | % Chg |
|---|---|---|---|
| CTQ | Careteq Ltd | $0.019 | +26.67% |
| FMR | FMR Resources Ltd | $0.59 | +18.59% |
| AMD | Arrow Minerals Ltd | $0.02 | +17.65% |
| SLB | Stelar Metals Ltd | $0.305 | +10.91% |
| DNL | Dyno Nobel Ltd | $4.16 | +7.77% |
52 Week Lows
Code | Company | Last | % Chg |
|---|---|---|---|
| ABX | ABX Group Ltd | $0.032 | -17.95% |
| NDO | Nido Education Ltd | $0.22 | -15.39% |
| CMG | Critical Minerals Group Ltd | $0.06 | -11.77% |
| OCT | Octava Minerals Ltd | $0.018 | -10.00% |
| NXD | Nexted Group Ltd | $0.065 | -7.14% |
Near Highs
Code | Company | Last | % Chg |
|---|---|---|---|
| PCI | Perpetual Credit Income Trust | $1.10 | 0.00% |
| WVOL | iShares MSCI World Ex Aust Minimum Volatility ETF | $45.67 | -0.18% |
| IAGPF | Insurance Australia Group Ltd | $104.81 | +0.22% |
| GCI | Gryphon Capital Income Trust | $2.03 | +0.50% |
| VVLU | Vanguard Global Value Equity Active ETF | $82.37 | -0.06% |
Relative Strength Index (RSI) Oversold
Code | Company | Last | % Chg |
|---|---|---|---|
| GMG | Goodman Group | $25.81 | -0.88% |
| WES | Wesfarmers Ltd | $72.29 | -0.74% |
| NWL | Netwealth Group Ltd | $18.96 | +1.01% |
| KSL | Kina Securities Ltd | $1.07 | -0.47% |
| IGL | Ive Group Ltd | $2.34 | -2.91% |
