Evening Wrap: ASX 200 stacks tidy gain to crack record, let the good times roll!

The S&P/ASX 200 closed 69.7 points higher, up 0.88%.

I didn't jinx it this time. We did it! 🥳🙌

A shiny new record high close – and in emphatic fashion too.

Gold, Real Estate, and Consumer Discretionary stocks led the way with just one sector, Technology, falling behind.

Let's hope this week's moves starts the ball rolling for further gains – a very real possibility given some of the recent developments in markets we'll discuss in tonight's Wrap, so...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 69.7 points higher at 7,959.3, 0.89% from its session low and just 0.12% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by a commanding 226 to 53.

For the week, the XJO finished up 137 points or 1.75% higher, 2.57% from its intraweek low and just 0.12% from its intraweek high.

For the third time this week, the Gold (XGD) (+3.3%) sub-index was the best performing sector (it was second best one time also!). Today’s gain caps a monster week for Aussie gold stocks, up 7.2% in aggregate. I note this compares to only a 1.4% weekly gain for gold so far.

Gold sub-index weekly chart

The XGD weekly chart shows short term and long term trends remain nicely skewed to the upside, and the last two candles' surge from the dynamic demand of the short term uptrend ribbon smacks of strong demand-side control. This week’s move is likely a catch up given last week's modest move in the XGD lagged gold’s 2.9% gain.

There's nothing in the XGD weekly chart to suggest that the current trends can't continue. I have further analysis on the gold price as well as a key macroeconomic factor driving its move in today's ChartWatch.

ASX Gold stocks today

Also doing well today, were the interest rate sensitive sectors of Real Estate (XRE) (+2.0%) and Consumer Discretionary (XDJ) (+1.7%). Again, see ChartWatch for an explanation of why they were favoured by the big fund managers today. It was also good to see continued strength in defensive sector Health Care (XHJ) (+1.5%).

Just the one sector in the red today – and it was destined to suffer just as much as all those mentioned above were destined to prosper. Tech tanked last night in the US, and it clearly had ramifications for the local Information Technology (XIJ) (-1.2%) sector. I suggest today's move was only a modest pullback in a sector that has been a top performer for the better part of the last year.

Perhaps bolstering my case, it wasn't a total write off for Aussie tech stocks today with some decent gains in a few of the majors.

ASX Tech stocks today

ChartWatch

US 10-Year T-Note Yield %

The price of money is getting cheaper

The last time we covered US 10-year bond yields was in ChartWatch in the Evening Wrap on 11 June.

It feels like a lifetime ago, but in that update we were tracking a strong bounce from the long term uptrend ribbon. That bounce eventually flittered out at 4.50%, and thankfully logged another lower swing high to 4.64% and 4.74%.

These lower swings indicate demand for bonds is building (there’s an inverse relationship between bond prices and bond yields, so when this chart is falling it indicates rising bond prices, and therefore excess demand for bonds).

The long term trend ribbon is shaping up as the key battle zone for price action. It appears that with Thursday’s decline, the price has again closed below the bottom of the ribbon. It’s also tickled the 4.19 point of demand (which is actually a point of supply for bonds – but that’s enough brain bending for today!).

In any other chart, I’d propose that a close below the long term trend ribbon with confirming short term trend, price action, and candles, usually signals the changing of the long term trend. In this case from up to down.

Also considering those trends / price action / candles, I can’t see anything in the chart that suggests the yield cannot go lower.

Ok. Great. So what? Why are you wasting my time with bond yields Carl, why don’t you do a chart of copper, or gold, or silver, or uranium?

Well, I did copper, silver and uranium yesterday, and see gold below…and (the real answer) is this chart is way more important than any of those…and the XJO, Nasdaq, S&P 500, Russell 2000 etc. etc.!

What we’re charting here is the price of money. Risk free money, because Uncle Sam always pays his bills.

Stocks aren’t risk free. They’re giant balls of risk! Yes, even your bank shares (“but what about my…”)

So, if risk free money is getting cheaper, then it makes it easier for investors to pay more for risky stuff like shares. In short: Down in this chart = good for stocks 👍.

Gold Futures (Front month, back-adjusted) COMEX

Cheaper money is usually good for gold.

The last time we covered gold was in ChartWatch in the Evening Wrap on 4 July.

In that update, I noted that gold was largely range-bound, trading between 2304 and 2477. The good news for you gold bugs, is that it’s now looking a whole lot healthier for a break of the latter than a break of the former.

And to be fair, I couldn’t have picked a better segue from one chart to the next. Unlike poor old lithium and copper and iron ore and uranium or whatever…moves in the gold price are rarely to do with demand versus supply.

Instead, as a long-regarded store of value, gold moves based upon the price of money. If money gets cheaper, that is, more of it can flood the global financial system and potentially debase currencies, stoke inflation, and all that good stuff, then the price of gold usually goes up.

Also, because you typically must pay someone to sit on top of your gold with a shotgun (or store it deep underground somewhere in London or Zurich), holding gold typically has a cost of carry.

Finally, gold has no yield. So, adding this item and the last – there is a significant opportunity cost to holding gold and that cost grows the greater the return on risk free money.

That’s the “why gold is going up” (it’s because yields are going down if you didn’t join the dots!), here’s the “where it might go next”

To the trends, price action, and candles we go!

Which are all pretty good, as in, they’re all pointing to increased demand-side control since our last update. Supply at 2407 has been cleared, and only the supply between 2456-2477 remains.

Thursday’s long white candle, along with rising peaks and rising troughs, suggests there’s still plenty of motivated demand in the system – so we may get a look at those highs (yields allowing) in the not-too-distant future.

2356 is demand, but I suspect also 2383-2407 will offer stubborn downside resistance sooner than that. As usual though, watch out for black candles and or upward pointing shadows to indicate supply is back to spoil the party.

Economy

Today

• There weren't any major economic data releases in our time zone today

Later this week

Friday

• 10:30 USA Core PPI June (forecast +0.1% m/m and +2.0% p.a. vs +0.0% m/m and +1.8% in May)

Saturday

• 00:00 USA Preliminary University of Michigan Consumer Sentiment July (67.0 forecast vs 68.2 in June)

Latest News

Interesting Movers

Trading higher

• +20.3% Immutep (IMM) - Positive results in TACTI-003 for 1L HNSCC cohort B patients and Becoming a substantial holder

• +16.9% Botanix Pharmaceuticals (BOT) - No news, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

• +10.1% Clarity Pharmaceuticals (CU6) - No news, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

• +10.0% Core Lithium (CXO) - No news, modest rally since Monday's Production and Financial Position Update continues (definitely not a regular in my ChartWatch ASX scans uptrends lists!)

• +9.3% Imugene (IMU) - No news today, but I note Wednesday's First patient dosed in Phase 1 bile tract cancer trial

• +9.0% Ora Banda Mining (OBM) - No news, likely continues positive response to yesterday's Sand King Approval Lifts FY26 Production Outlook to 150koz, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

• +8.6% Appen (APX) - Notification of cessation of securities

• +7.7% Mesoblast (MSB) - Change in substantial holding (increase), rise is consistent with prevailing short and long term uptrends 🔎📈

• +7.3% Droneshield (DRO) - No news, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

• +7.1% Spartan Resources (SPR) - No news, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

• +5.9% Genesis Minerals (GMD) - No news, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

• +5.0% Resolute Mining (RSG) - No news, rise is consistent with prevailing short and long term uptrends (also a regular in my ChartWatch ASX scans uptrends lists!) 🔎📈

Trading lower

• -4.3% GR Engineering Services (GNG) - Market Update - West Musgrave Project, fall is consistent with prevailing short and long term downtrends 🔎📉

• -3.9% Computershare (CPU) - No news, tends to prefer rising interest rate environment to falling one (see ChartWatch)

• -3.4% Macquarie Technology Group (MAQ) - No news, unfortunately tagged by US tech stocks correction

• -3.3% Wisetech Global (WTC) - No news, unfortunately tagged by US tech stocks correction

• -2.8% Silex Systems (SLX) - No news, hang over pull back after yesterday's rally on Kazatomprom tax news spike

• -2.7% Bannerman Energy (BMN) - No news, hang over pull back after yesterday's rally on Kazatomprom tax news spike

• -2.5% Audinate Group (AD8) - No news, fall is consistent with prevailing short and long term downtrends (also a regular in my ChartWatch ASX scans downtrends lists!) 🔎📉

• -2.4% Alpha HPA (A4N) - No news, fall is consistent with prevailing short and long term downtrends (also a regular in my ChartWatch ASX scans downtrends lists!) 🔎📉

Broker Notes

Aeris Resources (AIS)

• Retained at neutral at Macquarie; Price Target: $0.26

Ampol (ALD)

• Upgraded to neutral from sell at Goldman Sachs; Price Target: $37.40 from $38.30

Aristocrat Leisure (ALL)

• Retained at buy at Citi; Price Target: $59.00 from $53.00

Amotiv (AOV)

• Retained at buy at UBS; Price Target: $13.00 from $12.80

Alumina (AWC)

• Retained at equal-weight at Morgan Stanley; Price Target: $1.60

BHP Group (BHP)

• Retained at neutral at Macquarie; Price Target: $43.00

• Retained at equal-weight at Morgan Stanley; Price Target: $46.65

Beach Energy (BPT)

• Downgraded to sell from neutral at Goldman Sachs; Price Target: $1.50 from $1.54

Car Group (CAR)

• Retained at buy at Goldman Sachs; Price Target: $41.40 from $39.40

Coronado Global Resources (CRN)

• Retained at buy at Bell Potter; Price Target: $1.85 from $1.60

De Grey Mining (DEG)

• Retained at buy at UBS; Price Target: $1.80

Iluka Resources (ILU)

• Retained at neutral at Macquarie; Price Target: $7.00

Lynas Rare Earths (LYC)

• Retained at outperform at Macquarie; Price Target: $7.00

• Retained at underweight at Morgan Stanley; Price Target: $4.85

Monadelphous Group (MND)

• Retained at buy at Citi; Price Target: $16.20

Netwealth Group (NWL)

• Retained at sell at Citi; Price Target: $18.90

• Downgraded to underperform from hold at Jefferies; Price Target: $18.60 from $18.15

• Retained at overweight at Morgan Stanley; Price Target: $21.25

• Retained at buy at UBS; Price Target: $24.50 from $22.50

• Retained at hold at Unified Capital Partners; Price Target: $21.20 from $17.65

Piedmont Lithium (PLL)

• Retained at outperform at Macquarie; Price Target: $0.25

Platinum Asset Management (PTM)

• Retained at buy at Bell Potter; Price Target: $1.10

• Retained at sell at Goldman Sachs; Price Target: $1.00 from $0.98

Regis Resources (RRL)

• Upgraded to buy from neutral at Bank of America; Price Target: $2.30

Sayona Mining (SYA)

• Retained at neutral at Macquarie; Price Target: $0.04

Technology One (TNE)

• Retained at buy at Bell Potter; Price Target: $20.50 from $20.25

West African Resources (WAF)

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

Whitehaven Coal (WHC)

• Retained at hold at Bell Potter; Price Target: $8.90 from $7.70

Xero (XRO)

• Retained at buy at Citi; Price Target: $158.20

Scans