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/Evening Wrap: ASX 200 slumps on US rates tantrum, mixed bag for miners as Sandfire Resources and 29Metals bounce back
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Market Wraps
/Evening Wrap: ASX 200 slumps on US rates tantrum, mixed bag for miners as Sandfire Resources and 29Metals bounce back
Market Wraps
Evening Wrap: ASX 200 slumps on US rates tantrum, mixed bag for miners as Sandfire Resources and 29Metals bounce back
Fri 24 May 24, 5:27pm (AEST)
Stocks in article
The S&P/ASX 200 closed 84.2 points lower, down 1.08%.
Last week's 65.4 point gain has been more than compensated for by this week's 86.8 decline.
Back to earth came base and precious metals stocks, and more specifically, today, the interest rate sensitives.
Ironically it was significantly better than expected data on the US economy which drove today's losses.
That's not a misprint, as in significantly better than expected.
But, as stupid as it sounds, a bunch of people who are a lot smarter than us, and who have more money than us interpreted this as bad because it might delay their cherished interest rate cuts. By about a whole month...
Anyways, I don't make people buy and sell they way they do so don't shoot the messenger...
Let's dive in!
Today in Review
Fri 24 May 24, 4:25pm (AEST)
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Markets
ASX 200 Session Chart
The S&P/ASX 200 (XJO) finished 84.2 points lower at 7,727.6, 1.09% from its session high and just 0.14% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a dismal 45 to 224. Yuk! 🤢
For the week, the XJO finished down 86.8 points or 1.1% lower, and 1.93% from its weekly high and just 0.14% from its weekly low.
All 11 of the major ASX sectors were down today, but gong for least down goes to the Energy (XEJ) (-0.06%) sector. No real clues here – crude oil prices are struggling again, and despite recent strength in natural gas prices, they were also lower overnight.
We're splitting hairs of course, because the sector was still down, and outside of the 0.6% gain in heavyweight Woodside Energy Group (ASX: WDS) there was little to get excited about.
The rest of the sectors were varying degrees of lousy, with the lousiest falls seen in the interest rate sensitives of Consumer Discretionary (XDJ) (-2.5%), Real Estate Investment Trusts (XPJ) (-1.7%), and Information Technology (XIJ) (-1.5%).
Why so much misery here and across so many markets today?
Stronger than expected data on the US economy was perceived by investors to reduce the likelihood of interest rate cuts this year. This spiked the yields on US T-Bonds, which are in turn the benchmark for key market lending/borrowing rates.
It’s a very simple equation as it is on most days (it certainly was today!):
Yields ⬆️ = Stocks ⬇️
2 year US Government T-Bond yield percent 23 May 2024
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
Woodside Energy Group (WDS) | $27.93 | +$0.18 | +0.6% | -2.2% | -19.6% |
Bluescope Steel (BSL) | $21.60 | +$0.12 | +0.6% | -5.1% | +12.6% |
Santos (STO) | $7.67 | +$0.01 | +0.1% | -1.0% | +3.6% |
Origin Energy (ORG) | $10.36 | +$0.01 | +0.1% | +5.9% | +25.6% |
Northern Star Resources (NST) | $14.21 | +$0.01 | +0.1% | -4.5% | +8.6% |
Commonwealth Bank of Australia. (CBA) | $118.87 | -$1.86 | -1.5% | +3.4% | +19.5% |
Scentre Group (SCG) | $3.11 | -$0.05 | -1.6% | -1.6% | +11.1% |
GPT Group (GPT) | $4.25 | -$0.07 | -1.6% | +1.0% | -2.1% |
Computershare (CPU) | $26.70 | -$0.46 | -1.7% | -2.8% | +20.7% |
Mineral Resources (MIN) | $75.30 | -$1.43 | -1.9% | +9.4% | +1.7% |
Stockland (SGP) | $4.41 | -$0.09 | -2.0% | +0.5% | -0.9% |
Endeavour Group (EDV) | $4.90 | -$0.1 | -2.0% | -9.4% | -21.9% |
Seek (SEK) | $22.44 | -$0.46 | -2.0% | -10.1% | -7.7% |
James Hardie Industries (JHX) | $47.26 | -$0.98 | -2.0% | -13.6% | +25.4% |
Mirvac Group (MGR) | $1.980 | -$0.05 | -2.5% | -5.3% | -15.0% |
Xero (XRO) | $131.19 | -$3.65 | -2.7% | +9.5% | +18.8% |
The Lottery Corporation (TLC) | $4.96 | -$0.14 | -2.7% | +1.2% | +0.6% |
Sonic Healthcare (SHL) | $24.68 | -$0.76 | -3.0% | -7.7% | -29.8% |
Resmed Inc (RMD) | $31.80 | -$1.05 | -3.2% | +10.6% | -6.3% |
Wesfarmers (WES) | $63.82 | -$2.49 | -3.8% | -2.6% | +27.9% |
Treasury Wine Estates (TWE) | $11.51 | -$0.53 | -4.4% | -4.9% | -11.8% |
The best and worst blue chips today
Resources (XJR) (-0.58%) and the Gold (XGD) (-0.49%) sub-index weren’t great, but at least they weren’t the worst. Again gainers and losers in today's sector performance table because it was such a mixed bag!
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
Silver Mines (SVL) | $0.200 | +$0.01 | +5.3% | +11.1% | -4.8% |
Base Resources (BSE) | $0.285 | +$0.01 | +3.6% | +14.0% | +58.3% |
Jupiter Mines (JMS) | $0.320 | +$0.01 | +3.2% | +8.5% | +48.8% |
Southern Cross Gold (SXG) | $2.75 | +$0.06 | +2.2% | +33.5% | +382.7% |
Sandfire Resources (SFR) | $9.37 | +$0.2 | +2.2% | +2.2% | +63.0% |
Wildcat Resources (WC8) | $0.500 | +$0.01 | +2.0% | +4.2% | +920.4% |
29METALS (29M) | $0.505 | +$0.01 | +2.0% | +14.8% | -50.9% |
Latin Resources (LRS) | $0.260 | +$0.005 | +2.0% | +30.0% | +52.9% |
Chalice Mining (CHN) | $1.680 | -$0.035 | -2.0% | +45.5% | -77.1% |
Sayona Mining (SYA) | $0.042 | -$0.001 | -2.3% | +23.5% | -81.7% |
Liontown Resources (LTR) | $1.370 | -$0.035 | -2.5% | +22.3% | -50.7% |
Adriatic Metals (ADT) | $4.40 | -$0.13 | -2.9% | +4.8% | +36.6% |
Regis Resources (RRL) | $1.900 | -$0.06 | -3.1% | -13.6% | -6.9% |
IGO (IGO) | $7.36 | -$0.25 | -3.3% | +1.2% | -49.5% |
Lynas Rare Earths (LYC) | $6.67 | -$0.24 | -3.5% | +4.5% | -9.1% |
Imdex (IMD) | $2.18 | -$0.08 | -3.5% | +1.9% | +13.5% |
Vulcan Energy Resources (VUL) | $5.33 | -$0.21 | -3.8% | +74.8% | +33.3% |
Emerald Resources (EMR) | $3.62 | -$0.17 | -4.5% | +6.2% | +86.1% |
Winsome Resources (WR1) | $1.235 | -$0.065 | -5.0% | -7.8% | -32.9% |
Aeris Resources (AIS) | $0.280 | -$0.015 | -5.1% | +5.7% | -38.8% |
Australian Gold and Copper (AGC) | $0.510 | -$0.05 | -8.9% | +580.0% | +920.0% |
AIC Mines (A1M) | $0.535 | -$0.055 | -9.3% | +18.9% | +33.8% |
The best and worst of the Resources sector today
ChartWatch
NVIDIA (NASDAQ: NVDA)
Hype yes, uptrends, yes.
No doubt you’ve heard all of the hype about NVIDIA, its leverage to the developing AI theme, and probably also its burgeoning stock price.
The former is none of my business, but the latter is definitely my department.
NVDA’s long term uptrend began off the bottom-left of the chart, back in March 2023. It was a month earlier actually, that I tipped it as 10/10 for a turnaround setup. In that media spot I also happened to call the beginning of a new bull market in the NASDAQ composite. It was just under 12k at the time.
If you haven’t caught them already, I’ve just started doing daily scan lists based upon my trend following methodology for ASX stocks. Check the First Ed for an explanation of a turnaround setup, as well as a continuation setup – which is what the NVDA chart has evolved into now.
This is one the best case studies for the benefits of following the trend you’ll ever see, and despite the wobble in the broader US market yesterday, it kept on keeping on after reporting its First Quarter Fiscal 2025 results.
I haven’t read the results. I don’t really care what they say. I just know that whatever they were, it created excess demand for NVDA’s shares. I assume those either throwing their cash at NVDA and or not selling it at lower prices, did their research.
Double green trends, great price action (rising peaks and rising troughs), exemplary candles (predominantly white and or downward pointing shadows), and a sizeable gap up yesterday, all suggest the demand-side is very much in control here.
There was a touch of supply, though, evidenced in yesterday's candle in the form of that upward pointing shadow. But within the context of everything else technically, I’m not overly concerned about it just yet.
Demand moves up to the old supply area around $950. The dynamic demand of the short term uptrend ribbon isn’t far behind that bottoming out around $900, and as long as NVDA continues to close above this ribbon, its short term uptrend remains intact.
I can’t tell the future. I don’t know if today’s candle will go down as the very top for NVDA for the rest of time. Just, unlike you, I don’t care.
If it does, it does.
My job is just to follow the trend. I know that if I do, I’ll do so well on the occasional NVDAs from under $200 to make up for the just as occasional time I do happen to buy at the exact top.
CNX Nifty Index (NIF)
Only thinking happy thoughts, hence the Nifty 50
I’m only thinking happy thoughts in today’s ChartWatch – it is Friday after all! 🥳
So, none of those dreary big black candles that are all over the darned place today. Just happy white candles.
And that last big white candle on India's benchmark CNX Nifty 50 Index is a barrel of laughs. Now, note you’re looking at Thursday’s price action there, my chart won’t update today's session until after this Evening Wrap is published. But unlike most major international stock indices, the Nifty 50 is up today (at the time of writing).
It’s been a volatile few months for the Nifty 50, as it has gyrated between 21710 and 22784. The short term trend ribbon wasn’t exactly the best dynamic demand zone this time, but importantly it never turned down.
The long term trend kept rising the whole time, and so far has been an almost perfect zone of dynamic supply – just look at that rebound after the November 2023 pullback.
Price action is rising peaks and rising troughs, and candles are near-perfect since the last trough on 13 May.
Thursday’s close above the consolidation range high of 22784 moves that level to demand. There aren’t any points of supply – we’re in blue sky here.
As long as the Nifty 50 price continues to close above the short term uptrend ribbon, I suggest its short term uptrend remains intact.
Global X India Nifty 50 ETF chart
I bet of many of our readers probably already have some skin in the game in India simply by it being their country of origin, but for those who don’t, there is an easy way to invest in Indian shares via the ASX.
The Global X India Nifty 50 ETF (ASX: NDIA) logically has a very similar chart to the Nifty 50, but I expect it may differ due to currency translations and the fee structure built into most ETFs.
There’s really no point doing technical analysis on an index ETF – you really want to go to the source – but if I can make one observation from all of those black candles, it’s that you might be better waiting until the afternoon to buy!
Economy
Today
There weren't any major economic data releases in our time zone today
Later this week
Friday
22:30 USA Core Durable Goods Orders April (+0.1% forecast vs +0.0% March)
Latest News
Interesting Movers
Trading higher
+6.3% Playside Studios (PLY) - Game of Thrones Real-Time Strategy Game in Development, rise is consistent with prevailing long term uptrend, closed back above short term trend ribbon 🔎📈
+5.4% Accent Group (AX1) - Half Yearly Report and Accounts, rise is consistent with prevailing long term uptrend, closed back above short term trend ribbon 🔎📈
+5.3% Clarity Pharmaceuticals (CU6) - Change of Director's Interest Notice - Rob Thomas (on market purchase $68,000), rise is consistent with prevailing short and long term 🔎📈
+5.3% Silver Mines (SVL) - No news, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈
+5.2% Calix (CXL) - No news, 2 in a row 🤔
+3.8% Chrysos Corporation (C79) - No news 🤔
+3.6% Base Resources (BSE) - No news, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈
+3.2% Jupiter Mines (JMS) - No news, rise is consistent with prevailing short and long term 🔎📈
+2.8% NRW Holdings (NWH) - No news, possible continued positive response to Wednesday's Change of Director's Interest Notice (on market purchase $100,000) and Tuesday's Contract Awards, bouncing off long term uptrend ribbon 🔎📈
+2.8% Challenger (CGF) - Upgraded to buy from neutral at UBS and price target increased to $8.00 from $7.10 after Wednesday's Challenger extends MS Primary reinsurance partnership
+2.8% Droneshield (DRO) - No news today, but Wednesday: DroneShield Awarded $5.7 Million U.S. Government Contract
+2.7% Nuix (NXL) - No news, rise is consistent with prevailing short and long term 🔎📈
+2.5% Appen (APX) - 2024 AGM - CEO Address & Presentation
Trading lower
-6.1% Fletcher Building (FBU) - D&O Initial and Ongoing Disclosures - Multiple, fall is consistent with prevailing short and long term 🔎📉
-6.0% Avita Medical Inc. (AVH) - No news, fall is consistent with prevailing short and long term 🔎📉
-5.0% Winsome Resources (WR1) - No news, but possibly continued negative response to yesterday's NEWS
-4.5% Peninsula Energy (PEN) - No news, but capital raise in progress, fall is consistent with prevailing long term downtrend, short term trend transitioning from up to down 🔎📉
-4.5% Emerald Resources (EMR) - No news, weaker gold prices clipping winds of a few recent high flyers in the sector
-4.4% Treasury Wine Estates (TWE) - No news, generally weaker Consumer Discretionary sector on rising market interest rates overnight in the US
-4.2% IDP Education (IEL) - No news, fall is consistent with prevailing short and long term 🔎📉
-4.1% Charter Hall Group US Prohibited (CHC) - No news, generally weaker Real Estate sector on rising market interest rates overnight in the US
-3.8% Weebit Nano (WBT) - No news, fall is consistent with prevailing short and long term 🔎📉
-3.8% Tabcorp Holdings (TAH) - No news, fall is consistent with prevailing short and long term 🔎📉
-3.8% Corporate Travel Management (CTD) - No news, fall is consistent with prevailing short and long term 🔎📉
Broker Notes
29METALS (29M) upgraded to neutral from underperform at Macquarie; Price Target: $0.50 from $0.26
Aeris Resources (AIS) upgraded to neutral from underperform at Macquarie; Price Target: $0.30 from $0.20
ALS (ALQ) retained at sell at Ord Minnett; Price Target: $9.10 from $8.90
Aurelia Metals (AMI) retained at outperform at Macquarie; Price Target: $0.25 from $0.22
APA Group (APA) downgraded to hold from buy at Jefferies; Price Target: $9.12
Eagers Automotive (APE) downgraded to sell from neutral at Citi; Price Target: $9.55 from $13.85
AUB Group (AUB) retained at buy at Ord Minnett; Price Target: $34.04 from $34.20
Bendigo and Adelaide Bank (BEN)
Retained at underperform at Macquarie; Price Target: $9.25
Retained at overweight at Morgan Stanley; Price Target: $11.10
BHP Group (BHP)
Retained at neutral at Macquarie; Price Target: $43.00 from $42.00
Retained at hold at Ord Minnett; Price Target: $39.50 from $40.00
Car Group (CAR) retained at neutral at Citi; Price Target: $34.70
Challenger (CGF) upgraded to buy from neutral at UBS; Price Target: $8.00 from $7.10
Carnaby Resources (CNB) retained at outperform at Macquarie; Price Target: $1.25 from $1.10
Cleanaway Waste Management (CWY) upgraded to add from hold at Morgans; Price Target: $3.02 from $2.54
Dropsuite (DSE) retained at buy at Ord Minnett; Price Target: $3.38
Evolution Mining (EVN) retained at neutral at Macquarie; Price Target: $4.10 from $4.00
Graincorp (GNC) initiated at buy at Ord Minnett; Price Target: $9.80
James Hardie Industries (JHX) retained at hold at Ord Minnett; Price Target: $51.00
Medibank Private (MPL) retained at hold at Ord Minnett; Price Target: $3.60
Newmont Corporation (NEM) retained at outperform at Macquarie; Price Target: $71.00
Nufarm (NUF)
Retained at hold at Bell Potter; Price Target: $5.10 from $6.35
Downgraded to neutral from buy at Citi; Price Target: $4.80 from $5.80
Retained at hold at Jefferies; Price Target: $5.30
Downgraded to neutral from overweight at JP Morgan; Price Target: $5.50 from $6.00
Retained at neutral at Macquarie; Price Target: $5.10 from $5.73
Retained at equal-weight at Morgan Stanley; Price Target: $5.00
Retained at accumulate at Ord Minnett; Price Target: $7.70
Retained at outperform at RBC Capital Markets; Price Target: $6.25 from $6.75
Retained at buy at UBS; Price Target: $6.90 from $7.00
Ridley Corporation (RIC) retained at overweight at Wilsons; Price Target: $2.58 from $2.85
Rio Tinto (RIO) retained at neutral at Macquarie; Price Target: $123.00 from $121.00
Regal Partners (RPL) retained at buy at Bell Potter; Price Target: $4.02 from $3.86
Rex Minerals (RXM) retained at outperform at Macquarie; Price Target: $0.40 from $0.26
South32 (S32) retained at outperform at Macquarie; Price Target: $4.25 from $4.20
Sandfire Resources (SFR) retained at outperform at Macquarie; Price Target: $10.80 from $10.50
Sonic Healthcare (SHL) retained at accumulate at Ord Minnett; Price Target: $32.00
Silver Lake Resources (SLR) retained at neutral at Macquarie; Price Target: $1.60 from $1.40
Supply Network (SNL) downgraded to accumulate from buy at Ord Minnett; Price Target: $22.50 from $19.20
Telstra Group (TLS) retained at accumulate at Ord Minnett; Price Target: $4.50
Technology One (TNE)
Retained at lighten at Ord Minnett; Price Target: $14.50 from $14.00
Initiated at sector perform at RBC Capital Markets; Price Target: $18.00
TPG Telecom (TPG) retained at neutral at Macquarie; Price Target: $5.10
The Reject Shop (TRS)
Retained at add at Morgans; Price Target: $4.65 from $5.40
Retained at buy at Ord Minnett; Price Target: $4.20 from $5.80
Wesfarmers (WES) downgraded to underweight from equal-weight at Morgan Stanley; Price Target: $56.20 from $55.30
Worley (WOR) upgraded to buy from neutral at Goldman Sachs; Price Target: $17.50 from $17.25
Xero (XRO)
Retained at buy at Citi; Price Target: $144.75
Retained at neutral at E&P; Price Target: $142.00 from $131.00
Retained at overweight at Jarden; Price Target: $144.00 from $141.00
Retained at buy at Jefferies; Price Target: $160.36 from $150.96
Retained at outperform at Macquarie; Price Target: $180.70 from $154.60
Retained at hold at Morgans; Price Target: $140.00 from $134.80
Retained at sell at Ord Minnett; Price Target: $85.00 from $78.00
Upgraded to outperform from sector perform at RBC Capital Markets; Price Target: $155.00 from $130.00
Retained at buy at UBS; Price Target: $156.00 from $141.90
Scans
Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.
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