Market Wraps

Evening Wrap: ASX 200 retreats, Federal budget and US inflation data in focus

Tue 09 May 23, 5:12pm (AEST)

 The S&P/ASX 200 closed 12 points lower, down -0.17%. 

The Federal Budget will take place at 7:30 pm AEST tonight and set to announce the first surplus in 15 years, lithium stocks continue to advance but not all stocks are made equal, US inflation data is due tomorrow night and expectations are for headline inflation to remain unchanged at 5.0% year-on-year and a few Macquarie notes of interest.

Let's dive in.

Today in Review

Tue 09 May 23, 4:30pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,264.1 -0.17%
All Ords 7,456.7 -0.21%
Small Ords 2,901.6 -0.83%
All Tech 2,246.7 -0.65%
Emerging Companies 2,113.8 -1.02%
AUD/USD 0.6769 -0.22%
US Futures
S&P 500 $4,148.75 -0.10%
Dow Jones $33,641.0 -0.13%
Nasdaq $13,330.75 -0.16%
Name Value % Chg
Financials 6,192.9 +0.50%
Industrials 6,889.9 +0.29%
Communication Services 1,549.7 -0.20%
Utilities 8,662.4 -0.26%
Consumer Staples 13,371.7 -0.27%
Energy 10,694.6 -0.29%
Materials 18,143.8 -0.36%
Consumer Discretionary 3,056.5 -0.53%
Health Care 43,912.9 -0.57%
Information Technology 1,570.9 -0.68%
Real Estate 3,150.4 -1.42%

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ASX 200 Session Chart

ASX 200 chart
A lower and uneventful session (Source: Market Index)


The ASX 200 finished lower and closed around the midpoint of its intraday range. Most sectors were relatively choppy in what as a rather uneventful session. The market fell as much as 2.6% last Monday and Tuesday, and now its recouped roughly half those losses. The Federal Budget tonight and US inflation data tomorrow will likely drive a bit more direction for stocks.


China’s trade surplus rose to US$90.2bn in April from US$88.2bn in the previous month.

  • Beat market expectations of a US$71.6bn surplus

Australia’s 2023-24 Federal Budget will be announced at 7:30 pm AEST tonight. A few pre-announced highlights include: 

  • Budget is set to show a $4bn surplus this financial year – the first surplus in 15 years

  • On Sunday, the government announced plans to collect $2.4bn more via a petroleum resource rent tax over four years

  • Government has committed to $2.2bn primary health care services package

  • Cheaper childcare package (passed last November) will see $55.3bn in subsidies for four years from 2023-24

  • Government has committed to a 15% pay rise for aged care workers

  • Estimated cost of implementing the recently released defence strategic review’s recommendations is approximately $19bn over four years 

Latest news

Market Insights

Lithium: Choppy strength

Lithium stocks are bouncing, but not all names are made equal. This also follows a rather choppy session on Monday, where a long list of names faded from session highs.

Heavyweights Mineral Resources (+2.9%), Allkem (+2.8%) and Pilbara Minerals (+1.96%) continued to push higher. Notable developer/explorer gainers include Winsome (+12.3%) and Leo Lithium (+5.98%).

Leo Lithium chart (Source: TradingView)

Then there are a few intraday pullbacks from names like:

  • Core Lithium -2.9% from session high of +3.4%

  • Global Lithium -2.5% from session high of +2.2%

  • Argosy -2.2% from session high of 2.2%

US CPI Estimates

US inflation data is due tomorrow at 10:30 pm AEST. Headline inflation was 5.0% in March and consensus expects the year-on-year figure to remain flat in April.

Here's what the pros expect:

  • Morgan Stanley and Goldman Sachs: 5.1%

  • Bank of America, Citi, UBS, Barclays and Jefferies: 5.0%

  • JPMorgan and Scotiabank: 4.9%

Source: Bloomberg

As far as S&P 500 performance on inflation days, it's been rather unpredictable this year:

  • 2 February +1.05% (in-line)

  • 22 March -1.65% (in-line)

  • 12 April +1.33% (cooler-than-expected)

Interesting news and movers

Trading higher

  • +12.3% Winsome Resources (WR1)

  • +4.8% Renascor Resources (RNU)

  • +2.4% Arafura Rare Earths (ARU) – Agreement with Minhub

  • Lithium sector move: Leo Lithium (+6.0%), Patriot Battery (+3.6%), Atlantic Lithium (+3.0%), Mineral Resources (+2.9%)

Trading lower

  • -9.3% Tourism Holdings (THL) – Trading update

  • -5.8% 4DMEDICAL (4DX) - Capital Raise (Mon)

  • -4.7% 29Metals (29M)

  • Property sector move: Stockland (-3.1%), Charter Hall (-4.2%)

Broker notes

Macquarie Conference takeaways:

  • Housing (REA/DHG): Activity indicators marginally improving in last few weeks with demand/supply to underpin prices

  • Automotive (CAR): Conditions remain solid due to immigration. Flattening of rates can assist

  • Software (WTC/XRO/ALU): Generative AI not good enough to code yet. Business ‘moat’ for software companies needs to be speed to market

  • Data demand: NextDC commented on AI and data usage supporting demand

  • Consumer (media): Sentiment declining with TV and OOH reporting softer trading updates

  • Telecommunications: Focus on industry returns to be achieved via higher mobile pricing. Limited impact from consumer cost of living yet

  • “Key preferences in the sector are those with structural growth (IEL / NXT); resilient earnings through a cycle (TLS / CAR); or those which can manage their cost base to weather a cycle with an attractive valuation (SEK).”

Macquarie notes:

Block (SQ2): Outperform with $145.00 target price

  • “Block delivered stronger than expected results across the board in 1Q.”

  • “Key items like monthly actives and BNPL losses improved sequentially.”

  • “Among large fintechs, it continues to be our choice given the whitespace left to work through across both the global consumer and enterprise and SMB merchants.”

Lynas (LYC): Outperform with $8.60 target price

  • “LYC has secured a critical six-month extension to its full operating licence in Malaysia.”

  • “The licence extension should enable full production to be maintained while the Kalgoorlie plant is ramped up.”

  • “We view the licence extensions as a major de-risking event for LYC and we upgrade our recommendation to Outperform.”

Westpac (WBC): Neutral with $22.00 target price

  • “WBC delivered a clean 1H23 result which was ~1% below our forecast, as funding tailwinds didn’t materialise to the extent we anticipated.”

  • “Furthermore, WBC’s overweight exposure to the highly competitive mortgage market is likely to result in more margin and profitability headwinds in 2H23 and FY24.”

  • “WBC is trading at a ~5% and ~33% discount to NAB and CBA respectively on FY24 earnings, but a ~6% premium to ANZ. With risks to consensus rebasing, we see WBC as appropriately valued at current levels.”


Top Gainers

Code Company Last % Chg
VSR Voltaic Strategic... $0.064 +137.04%
BEZ Besra Gold Inc $0.445 +102.27%
CHZ Chesser Resources... $0.125 +71.23%
ZEU ZEUS Resources Ltd $0.021 +50.00%
HXG Hexagon Energy Ma... $0.015 +36.36%
View all top gainers

Top Fallers

Code Company Last % Chg
SIX Sprintex Ltd $0.02 -44.44%
BXN Bioxyne Ltd $0.02 -20.00%
NVU Nanoveu Ltd $0.028 -20.00%
BGT Bio-Gene Technolo... $0.105 -19.23%
CBL Control Bionics Ltd $0.105 -19.23%
View all top fallers

52 Week Highs

Code Company Last % Chg
VSR Voltaic Strategic... $0.064 +137.04%
BEZ Besra Gold Inc $0.445 +102.27%
CHZ Chesser Resources... $0.125 +71.23%
KAM K2 Asset Manageme... $0.068 +7.94%
MXI Maxiparts Ltd $2.45 +4.26%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
G6M Group 6 Metals Ltd $0.14 -17.65%
EME Energy Metals Ltd $0.10 -16.67%
HAL Halo Technologies... $0.125 -16.67%
ZMM ZIMI Ltd $0.035 -16.67%
APS Allup Silica Ltd $0.05 -15.25%
View all 52 week lows

Near Highs

Code Company Last % Chg
WTC Wisetech Global Ltd $67.99 -0.24%
GOR Gold Road Resourc... $1.935 -1.53%
SMLL Betashares Aust S... $3.53 -0.84%
OZBD Betashares Austra... $44.86 -0.38%
CSL CSL Ltd $299.82 -0.48%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
SM1 Synlait Milk Ltd $1.33 -0.75%
DGL DGL Group Ltd $1.315 -1.50%
AEE Aura Energy Ltd $0.18 0.00%
MGX Mount Gibson Iron... $0.44 0.00%
OML Ooh!Media Ltd $1.26 0.00%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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