Evening Wrap: ASX 200 smashed on growth fears, uranium stocks obliterated on Kazatomprom news, nowhere to hide (except gold)

The S&P/ASX 200 closed 171.5 points lower, down 2.11%.

No doubt you're aware of just how lousy things were on the Aussie stock market today, so I won't delay you from an explanation of how lousy, who lousy, and where lousy from here...😭

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 171.5 points lower at 7,943.2, 2.59% from its session high and just 0.29% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by an almost unanimous 30 to 242.

For the week, the XJO finished down 21.9 points or 0.28% lower, a painful 2.59% from its intraweek high of 8148.7 and 0.62% from its intraweek low.

All 11 of the major ASX sectors were down today, and apart from the typically defensive Utilities (XUJ) (-0.06%), the damage started at down 1.3% and tanked steadily from there.

Defence was the name of the day, with Consumer Staples (XSJ) (-1.3%) and Communication Services (XTJ) (-1.3%) least worst performers.

Worst-worst? All the stuff that usually enjoys lower interest rates, like Consumer Discretionary (XDJ) (-3.0%), Real Estate Investment Trusts (XPJ) (-3.0%), Information Technology (XIJ) (-2.8%), and Financials (XFJ) (-2.6%).

The interesting thing (and a little sickening 🤢) is that rates fell sharply last night in the US, and as per the charts I showed you in this exact section yesterday – have been doing so for some time now.

If your memory just sparked of a comment I made in the ChartWatch section of my 15 July Evening Wrap, then yes – you figured it out what today's calamity is all about!

…there is an inflection point where lower rates stops being good for stocks. This is the point where market yields are falling not because of central bank cuts being a good thing and helping stocks, but because the US economy is on the brink of a recession, and that's bad for stocks.

We have arrived! Destination: Bad news is once again bad news.

And that’s bad news...

I finished a really great article (if I say so myself) on this exact topic a little too late to publish today, so watch out for it first thing Monday morning.

Back to the carnage today…

(That’s not carnage…this is carnage!)

ASX listed uranium stocks were obliterated after the world’s largest producer of uranium, Kazakhstan’s Kazatomprom, announced it had hiked its full-year production guidance to 22.5-23.5 million tonnes, up from its previous guidance of 21-22.5m tonnes.

The upshot of this is more uranium around could hurt the uranium price. It hasn't so far – uranium futures on COMEX last night were roughly flat. But something about this news spooked local uranium plays, with many ending up with falls in excess of 10%.

If you've been paying any attention to my ChartWatch ASX Daily Scan Downtrends lists, or my commentary on uranium in these Evening Wraps, you would know that the trends in the uranium price, and in most ASX uranium stocks, turned weeks ago...

ASX uranium stocks today

If there was a bright spot, it was the glimmer provided by the Gold (XGD) sub-index which eked out a 0.18% gain.

The best of the ASX gold sector today

ChartWatch

S&P/ASX 200 (XJO)

An interesting chart

Big black candles that close near their lows are never a good look.

But, let's put today’s big black candle that closed near its low into perspective.

The short and long term trends are still up, the price action is still rising peaks and rising troughs, and prior to today, the candles were for the most part demand-side in nature.

I think we’re still OK, particularly if we don’t end up closing below the light green zone on the chart above (low at 7839).

But, I can’t really sugar coat today’s development more than that. Today’s big black candle that closed near its low isn't a good look.

It’s not a good look for a market that was literally yesterday so confident to make a new all-time high.

I propose Monday’s candle is now critical. It needs to close at its high. Preferably, it needs to close at least halfway back up today’s candle’s range.

This should keep the supply wolves at bay, and calm the nerves of momentum traders (i.e., a large component of demand).

Anything less will fan the flames of supply at a time where it appears demand is taking a break until calmer waters and cooler heads prevail.

Economy

Today

• AUS Producer Price Index (PPI) June Quarter

  • +1.0% q/q vs +1.0% q/q forecast and +0.9% q/q in March

Later this week

Friday

• 22:30 USA Non-Farm Employment Change July (+177k forecast vs +206k June); Average Hourly Earnings July (+0.3% m/m forecast vs +0.3% June); Unemployment Rate (4.1% forecast vs 4.1% June)

Latest News

Interesting Movers

Trading higher

• +6.0% Westgold Resources (WGX) - Westgold and Karora Complete Merger, rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.6% Opthea (OPT) - Updated Quarterly Report and Cashflow

• +5.1% Block (SQ2) - Quarterly Report for quarterly period ending June 30, 2024

• +4.2% Pinnacle Investment Management Group (PNI) - 2024 Financial Highlights and Investor Presentation and Annual Report to shareholders, retained at outperform at Macquarie with price target increased to $18.18 from $14.52, rise is consistent with prevailing short and long term uptrends 🔎📈

• +2.9% Superloop (SLC) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +2.7% Abacus Storage King (ASK) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +2.4% Fenix Resources (FEX) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +1.5% Resolute Mining (RSG) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

Trading lower

• -19.2% Deep Yellow (DYL) - Entire ASX uranium sector took a beating today after top global producer Kazatomprom hiked its full-year production guidance to 22.5-23.5 million tonnes, up from its previous guidance of 21-22.5m tonnes, fall is consistent with prevailing short and long term downtrends 🔎📉

• -13.0% Bannerman Energy (BMN) - Ditto uranium stocks...fall is consistent with prevailing short and long term downtrends 🔎📉

• -12.9% Boss Energy (BOE) - Ditto uranium stocks...fall is consistent with prevailing short and long term downtrends 🔎📉

• -12.7% Nexgen Energy (NXG) - NexGen Provides Updated Economics for the Rook I Project, but really, ditto uranium stocks…fall is consistent with prevailing short and long term downtrends 🔎📉

• -10.8% Paladin Energy (PDN) - Ditto uranium stocks...fall is consistent with prevailing short and long term downtrends 🔎📉

• -10.7% Syrah Resources (SYR) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -9.5% Core Lithium (CXO) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -9.2% Domino's Pizza Enterprises (DMP) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -8.5% Silex Systems (SLX) - Investor Presentation, but really, ditto uranium stocks…fall is consistent with prevailing short and long term downtrends 🔎📉

• -8.0% Arcadium Lithium (LTM) - Tough day for ASX lithium stocks also, as lithium prices in China continued to drop (despite ALB production cut news), feeling that nobody knows where the bottom is…but as they say in the classics: fall is consistent with prevailing short and long term downtrends 🔎📉

• -7.3% 29METALS (29M) - Copper down Thursday, tough day all-round for ASX resources stocks... fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.8% Avita Medical (AVH) - AVITA Medical Names Robin VanDenburgh as SVP of Sales

• -6.6% Champion Iron (CIA) - Retained at buy at Goldman Sachs but price target cut to $7.60 from $8.00, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.6% EML Payments (EML) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.5% Pilbara Minerals (PLS) - Ditto lithium stocks...fall is consistent with prevailing short and long term downtrends 🔎📉

Broker Notes

Ampol (ALD)

• Retained at equal-weight at Morgan Stanley; Price Target: $35.00

AMP (AMP)

• Retained at equal-weight at Morgan Stanley; Price Target: $1.29 from $1.06

Aldoro Resources (ARN)

• Retained at neutral at UBS; Price Target: $0.65 from $0.87

American West Metals (AW1)

• Initiated at buy at Shaw and Partners; Price Target: $0.32

Beach Energy (BPT)

• Retained at equal-weight at Morgan Stanley; Price Target: $1.45

Bluescope Steel (BSL)

• Downgraded to neutral from overweight at JP Morgan; Price Target: $23.00

Bravura Solutions (BVS)

• Retained at neutral at Macquarie; Price Target: $1.26 from $1.30

Commonwealth Bank of Australia (CBA)

• Retained at underweight at Morgan Stanley; Price Target: $102.00

• Retained at sell at UBS; Price Target: $107.00

Challenger (CGF)

• Retained at equal-weight at Morgan Stanley; Price Target: $7.40 from $7.20

Champion Iron (CIA)

• Retained at buy at Goldman Sachs; Price Target: $7.60 from $8.00

Capricorn Metals (CMM)

• Upgraded to buy from overweight at Jarden; Price Target: $6.28 from $5.80

Cooper Energy (COE)

• Retained at overweight at Jarden; Price Target: $0.26 from $0.24

Fletcher Building (FBU)

• Initiated at neutral at E&P; Price Target: $3.07

Global Lithium Resources (GL1)

• Retained at buy at Shaw and Partners; Price Target: $2.20

Gold Road Resources (GOR)

• Retained at outperform at Macquarie; Price Target: $1.90

Harvey Norman (HVN)

• Upgraded to overweight from neutral at JP Morgan; Price Target: $5.60 from $4.90

Insignia Financial (IFL)

• Retained at underweight at Morgan Stanley; Price Target: $2.25 from $2.30

IGO (IGO)

• Retained at buy at Goldman Sachs; Price Target: $6.75

JB HI-FI (JBH)

• Downgraded to underweight from hold at Jefferies; Price Target: $55.50 from $52.50

• Downgraded to neutral from overweight at JP Morgan; Price Target: $70.00 from $67.00

Jupiter Mines (JMS)

• Initiated at buy at Argonaut Securities; Price Target: $0.40

Karoon Energy (KAR)

• Retained at equal-weight at Morgan Stanley; Price Target: $1.98

Liontown Resources (LTR)

• Retained at buy at Bell Potter; Price Target: $1.90

Mineral Resources (MIN)

• Retained at sell at Goldman Sachs; Price Target: $47.00

Monadelphous Group (MND)

• Retained at outperform at Macquarie; Price Target: $14.15 from $15.10

• Retained at hold at Bell Potter; Price Target: $13.60 from $14.00

• Downgraded to neutral from positive at E&P; Price Target: $13.24

Nine Entertainment (NEC)

• Retained at buy at UBS; Price Target: $1.95 from $2.15

Nickel Industries (NIC)

• Retained at outperform at Macquarie; Price Target: $1.10

• Retained at buy at Bell Potter; Price Target: $1.41 from $1.54

News Corporation (NWS)

• Downgraded to buy from neutral at UBS; Price Target: $46.30

OOH!Media (OML)

• Retained at buy at UBS; Price Target: $1.95

• Upgraded to buy from hold at Jefferies; Price Target: $1.75

Orora (ORA)

• Downgraded to neutral from buy at Citi; Price Target: $2.30 from $2.86

Origin Energy (ORG)

• Retained at equal-weight at Morgan Stanley; Price Target: $10.00

Orica (ORI)

• Retained at buy at Shaw and Partners; Price Target: $0.52

Pilbara Minerals (PLS)

• Retained at hold at Bell Potter; Price Target: $3.30

Pinnacle Investment Management Group (PNI)

• Retained at outperform at Macquarie; Price Target: $18.18 from $14.52

QBE Insurance Group (QBE)

• Retained at neutral at Macquarie; Price Target: $18.40

Red 5 (RED)

• Initiated at sector perform at RBC Capital Markets; Price Target: $0.40

Resmed Inc (RMD)

• Retained at overweight at Jarden; Price Target: $32.85

Santos (STO)

• Retained at equal-weight at Morgan Stanley; Price Target: $8.08

Super Retail Group (SUL)

• Initiated at neutral at E&P; Price Target: $15.87

Seven West Media (SWM)

• Downgraded to sell from neutral at UBS; Price Target: $0.16 from $0.26

Southern Cross Media Group (SXL)

• Retained at neutral at UBS; Price Target: $0.68 from $0.96

Syrah Resources (SYR)

• Retained at equal-weight at Morgan Stanley; Price Target: $0.25 from $0.40

Telix Pharmaceuticals (TLX)

• Retained at buy at Jarden; Price Target: $25.55

Temple & Webster Group (TPW)

• Retained at buy at Jarden; Price Target: $12.67

Viva Energy Group (VEA)

• Retained at equal-weight at Morgan Stanley; Price Target: $3.64

Woodside Energy Group (WDS)

• Retained at overweight at Morgan Stanley; Price Target: $32.00

Scans