Market Wraps

Evening Wrap: ASX 200 rises ahead of US inflation data

Wed 12 Jul 23, 5:00pm (AEST)

The S&P/ASX 200 closed 27 points higher, up 0.38%. 

The Index finished higher but off best levels, three charts of interest – JPMorgan inflation scenario analysis, China's special bond quota and the global rates race, Macquarie says lottery enabler Jumbo Interactive could see a re-rate in FY24 and Citi reiterates its Buy recommendations on Pilbara Minerals and Allkem.

Let's dive in.


Today in Review

Wed 12 Jul 23, 4:28pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,135.7 +0.38%
All Ords 7,341.5 +0.35%
Small Ords 2,820.2 +0.14%
All Tech 2,420.7 +0.15%
Emerging Companies 2,108.1 -0.85%
Currency
AUD/USD 0.6708 +0.33%
US Futures
S&P 500 4,477.75 +0.10%
Dow Jones 34,479.0 +0.04%
Nasdaq 15,283.25 +0.15%
Name Value % Chg
Sector
Energy 11,003.4 +1.96%
Materials 17,937.1 +1.00%
Industrials 6,714.3 +0.38%
Consumer Discretionary 2,899.5 +0.25%
Financials 6,182.2 +0.19%
Consumer Staples 13,056.6 +0.09%
Communication Services 1,532.9 +0.04%
Real Estate 3,029.0 +0.01%
Utilities 8,820.2 -0.09%
Information Technology 1,800.2 -0.50%
Health Care 39,625.1 -0.64%

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ASX 200 Session Chart

S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
ASX 200 extend gains but closes off session highs (Source: Market Index)

Markets

The bounce continues for a second consecutive day, led by Energy and Materials. The Resource sector is catching a bid thanks to firmer commodity prices and the US Dollar Index falling to a 10-week low. Intraday, the Index finished off session highs of 0.7% – Understandable weakness ahead of another high stakes US inflation print. Let's see what kind of market we wake up to.

Economy

No major economic announcements. US inflation print at 10:30 pm AEST. 


Latest news


Market Insights

A few charts of interest (and repeating JPMorgan's CPI game plan – Which is a cool visual for market expectations for where inflation lands/market reaction but generally wrong).

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Source: JPMorgan

China is expected to boost fiscal support to the economy, with more policy tools, according to Bloomberg. Avenues include easing local government fiscal pressure by issuing special sovereign bonds to fund infrastructure projects.

China stimulus
Source: China's Ministry of Finance, Bloomberg

A visual on the global rates race across the 10 most traded currencies.

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Source: Refinitiv

Interesting news and movers

Trading higher

  • +15.0% Melbana Energy (MAY)

  • +11.6% EML Payments (EML)

  • +11.7% Neometals (NMT) – Offtake with Glencore

  • +11.1% Integrated Research (IRI) – Trading update 

  • +8.3% Bubs Australia (BUB) – Legal dispute update

  • +5.5% Megaport (MP1) – Continuation rally

  • +5.4% Incitec Pivot (IPL) – Speculation re sale of fertiliser business

  • +4.4% Marley Spoon (MMM) Completes Frankfurt listing

  • Energy sector move: Woodside Energy (+2.8%), Karoon Energy (+2.5%), Beach Energy (+1.7%), Santos (+1.6%),

Trading lower

  • -23.8% Mobilicom (MOB) – Pullback after +162.5% in last three

  • -13.3% Lindian Resources (LIN) – Capital raising

  • -9.3% KMD Brands (KMD) – Guidance

  • -8.0% Pepper Money (PPM) 

  • -3.7% Patriot Battery Metals (PMT) – Responds to short seller report (Tue)


Broker notes

A few standalone Macquarie notes of interest:

Capricorn Metals (CMM)

  • Rating: Outperform

  • Target price: $4.90 ($4.39 at 11 Jul)

  • “CMM provided preliminary 4QFY23 metrics with gold production from Karlawinda 7% below our estimate.”

  • “Underlying (stripping out the A$36.8m payment for partial hedge book closure) cash and bullion generation was also A$13.4m better than we expected.”

Jumbo Interactive (JIN)

  • Rating: Outperform

  • Target price: $17.45 ($13.87 at 11 Jul)

  • “Low lottery jackpot activity and a pause in digital penetration will impact FY23 earnings. But this sets the stage for attractive growth in FY24, taking on normalised jackpot activity, initiatives to drive volumes and Jumbo's recent re-pricing. We continue to see a re-rating opportunity.”

Megaport (MP1)

  • Rating: Neutral

  • Target price: $9.00 ($8.99 at 11 Jul)

  • “MP1 upgraded its FY23 EBITDA guidance to $19-21m (prior: 16-18m), an 18% upgrade at the midpoint.”

  • “Good cost management and lower churn from the price increase demonstrates the quality of the product. We remain concerned on the pace of sales execution including the acquisition and ramp-up of 8-10 new sales staff.”

Citi’s note on the lithium sector:

  • China’s NEV-PV wholesale numbers was 761,000 units in June, up 12.1% month-on-month.

  • “We reiterate our Buy recommendations on Pilbara Minerals and Allkem. 3Q EV sales in China are typically higher than 2Q which may require battery producers to carry higher inventory (restock). We thus think it’s too soon to take profits on producers here.”


Scans 

Top Gainers

Code Company Last % Chg
NIS Nickelsearch Ltd $0.084 +50.00%
EMC Everest Metals Co... $0.34 +36.00%
ICG Inca Minerals Ltd $0.03 +30.44%
CMG Critical Minerals... $0.25 +25.00%
ABE Australian Bond E... $0.21 +23.53%
View all top gainers

Top Fallers

Code Company Last % Chg
MOB Mobilicom Ltd $0.017 -21.43%
SRJ SRJ Technologies ... $0.061 -18.67%
DCL Domacom Ltd $0.033 -17.50%
AUZ Australian Mines Ltd $0.029 -17.14%
WWI West Wits Mining Ltd $0.018 -16.67%
View all top fallers

52 Week Highs

Code Company Last % Chg
EMC Everest Metals Co... $0.34 +36.00%
MAY Melbana Energy Ltd $0.12 +20.00%
ACM Australian Critic... $0.25 +8.70%
HCH Hot Chili Ltd $1.315 +8.68%
OEL Otto Energy Ltd $0.017 +6.25%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
GIB Gibb River Diamon... $0.035 -10.26%
LV1 Live Verdure Ltd $0.085 -9.57%
KMD KMD Brands Ltd $0.88 -9.28%
VMS Venture Minerals Ltd $0.013 -7.14%
ZNC Zenith Minerals Ltd $0.085 -5.56%
View all 52 week lows

Near Highs

Code Company Last % Chg
VLUE Vaneck MSCI Inter... $23.32 +0.52%
SEMI Global X Semicond... $11.62 -0.17%
NWL Netwealth Group Ltd $13.74 -0.44%
BILL Ishares Core Cash... $100.48 +0.01%
SLA Silk Laser Austra... $3.30 -0.60%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
LNK Link Administrati... $1.605 0.00%
BCB Bowen Coking Coal... $0.145 0.00%
NXD Nexted Group Ltd $1.195 +0.42%
IGB Ishares Treasury ETF $95.78 +0.43%
MGH Maas Group Holdin... $2.45 -0.41%
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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