2 months ago
Finance News Network
Miners have slammed a NSW domestic coal reservation plan, believing that it will do little to cut electricity prices. NSW Treasurer Matt Kean has told NSW thermal coal miners to reserve up to 10 per cent of their output by the end of january, to reduce the potential for a supply shortfall.
The SPI futures are pointing to a rise of 20 points.
Best and worst performers
The best-performing sector is REITs, up 0.71 per cent. The worst-performing sector is Information Technology, down 0.91 per cent.
The best-performing large cap is Suncorp Group
The worst-performing large cap is Santos
Asian news
Shares in the Asia-Pacific traded lower on Thursday after tracking losses on Wall Street overnight.
In Japan, the Nikkei 225 and Topix traded down 0.96 per cent and 0.88 per cent respectively after Japan recorded another trade deficit for December, one day after the Bank of Japan surprised markets by keeping its yield curve tolerance band unchanged. The yen currently stands at at 128.73 against the US dollar.
South Korea’s Kospi fell 0.66 per cent, while the Kosdaq shed 0.32 per cent in its first hour of trade.
December PPI softer than expected, retail sales misses, builder confidence beats
December headline PPI softer than expected, down 0.5 per cent m/m against consensus for a 0.1 per cent decline and biggest drop since Apr-20. Annualised PPI down from 1.2pp m/m to 6.2 per cent, lower than 6.8 per cent consensus and lowest since Mar-21. Goods down 1.6 per cent while services up 0.1 per cent. Core PPI up 0.1 per cent m/m, softer than 0.2 per cent consensus, while 5.5 per cent y/y in line. Food down 1.1 per cent, while gasoline down 4.6 per cent. Report the latest to support peak-Fed/peak-inflation narrative. Morgan Stanley strategists yesterday noted increasing risk of Fed bringing down its median dot in March SEP as inflation likely will miss Fed's December projection. December retail sales down 1.1 per cent m/m, a sharper decline than 0.8 per cent consensus. Retail sales ex autos and gas down 0.7 per cent against consensus for 0.2 per cent increase. Control group down 0.7 per cent, also a bigger than consensus for 0.3 per cent decline. January NAHB builder confidence rose four points to 35, beating estimates for 31 and breaking a streak of 13-straight declines as all three sub-metrics improved. NAHB said it appears the low point was December, see rebound underway given improving affordability, deep structural housing deficit.
Lots of moving pieces
Lots of moving pieces for the market to deal with. Short covering flagged as a key driver of recent strength, though also some debate about how much more of a tailwind positioning dynamics can supply (Goldman's aggregate measure of positioning and sentiment back at neutral levels and Citi said positioning and sentiment normalising). There may be some additional complications with the rotation toward global equities. Earnings expectations for both Q4 and 2023 have seen outsized declines, providing support for the competing earnings risk and low bar narratives. Disinflation one of the most credible bullish talking points right now, though also some focus on recent bounce in energy prices. Soft landing hopes underpinned by a still tight US labor market, China reopening and no European energy crisis, though this week's macro data (Empire manufacturing, retail sales, IP) has surprised to the downside and Fed focus on lagging indicators seen as another hard landing risk. Economic normalisation evident in strong services demand and easing supply chain constraints, but also playing a role in flurry of tech layoff announcements and softer discretionary spending trends.
No hawkish surprises from BoJ
BoJ left key aspects of its monetary policy, including the policy rate, YCC band and forward guidance, unchanged. While this matched the consensus, there had been a lot of speculation about the potential for another hawkish surprise following the widening of the YCC band at the December meeting and ahead of the end of Kuroda's tenure as the head of the central bank in March. Instead, BoJ seemingly pushed back against the notion of a near-term YCC exit. It reiterated an outsized focus on market functioning and added language to the policy statement noting that it will continue with large-scale JGB purchases in order to encourage the formation of a yield curve consistent with policy guidelines for market operations. Today's development has helped push global bond yields and the yen lower. While there have been concerns that the surprise YCC band tweak late last year and accompanying expectations for a near-term exit from YCC would remove an anchor on global bond yields, there have also been thoughts the market is well-prepared for a major policy shift, particularly after the massive JGB buying operations in December.
All sectors down, though performance still fairly bunched
All sectors were lower today, though there was not a lot of dispersion in a market that gradually sold off the early morning's strength. The FANMAGs were mixed, with MSFT-US the biggest decliner (more layoffs announced today). Banks underperformed. Regionals lagged the larger caps but PNC-US was a big decliner on its NII/NIM miss. Consumer staples were broadly lower, particularly food, beverages, and HPCs. Energy followed crude lower (WTI broke an eight-day string of gains), with oil services and integrateds among the weak spots. Autos, China tech, cruise lines, multis, utilities, airlines, QSRs, building products, and credit cards underperformed as well. Semis, exchanges, homebuilders (rates), department stores, entertainment, lithium, TiO2 were mixed to better. Few groups definitively to the upside, but trucking was one of the market's strongest areas with some focus on JBHT-US (said freight should normalise in Q2).
Company news
Imdex
Patriot Battery Metals
Minbos Resources
BluGlass’
Knosys
Kincora Copper
Chimeric Therapeutics
Commodities and the dollar
Gold is trading at US$1782.70 an ounce.
Iron ore is 1 per cent higher at US$122.70 a tonne.
Iron ore futures are pointing to a 1.25 per cent rise.
One Australian dollar is buying 69.11 US cents.
Australia’s unemployment rate is unchanged from an upwardly revised 3.5 per cent in November. The news resulted in the S&P/ASX 200 reaching 0.24 per cent or 18 points higher at 7,411.50 at noon. The news also acted as a buffer against the dismal performance of US stocks overnight.Miners have slammed a NSW domestic coal reservation plan, believing that it will do little to cut electricity prices. NSW Treasurer Matt Kean has told NSW thermal coal miners to reserve up to 10 per cent of their output by the end of january, to reduce the potential for a supply shortfall.The SPI futures are pointing to a rise of 20 points.The best-performing sector is REITs, up 0.71 per cent. The worst-performing sector is Information Technology, down 0.91 per cent.The best-performing large cap is Suncorp Group, trading 3.36 per cent higher at $12.32. It is followed by shares in Allkemand Meridian EnergyThe worst-performing large cap is Santos, trading 1.63 per cent lower at $7.24. It is followed by shares in Amcorand Treasury Wine EstatesShares in the Asia-Pacific traded lower on Thursday after tracking losses on Wall Street overnight.In Japan, the Nikkei 225 and Topix traded down 0.96 per cent and 0.88 per cent respectively after Japan recorded another trade deficit for December, one day after the Bank of Japan surprised markets by keeping its yield curve tolerance band unchanged. The yen currently stands at at 128.73 against the US dollar.South Korea’s Kospi fell 0.66 per cent, while the Kosdaq shed 0.32 per cent in its first hour of trade.December headline PPI softer than expected, down 0.5 per cent m/m against consensus for a 0.1 per cent decline and biggest drop since Apr-20. Annualised PPI down from 1.2pp m/m to 6.2 per cent, lower than 6.8 per cent consensus and lowest since Mar-21. Goods down 1.6 per cent while services up 0.1 per cent. Core PPI up 0.1 per cent m/m, softer than 0.2 per cent consensus, while 5.5 per cent y/y in line. Food down 1.1 per cent, while gasoline down 4.6 per cent. Report the latest to support peak-Fed/peak-inflation narrative. Morgan Stanley strategists yesterday noted increasing risk of Fed bringing down its median dot in March SEP as inflation likely will miss Fed's December projection. December retail sales down 1.1 per cent m/m, a sharper decline than 0.8 per cent consensus. Retail sales ex autos and gas down 0.7 per cent against consensus for 0.2 per cent increase. Control group down 0.7 per cent, also a bigger than consensus for 0.3 per cent decline. January NAHB builder confidence rose four points to 35, beating estimates for 31 and breaking a streak of 13-straight declines as all three sub-metrics improved. NAHB said it appears the low point was December, see rebound underway given improving affordability, deep structural housing deficit.Lots of moving pieces for the market to deal with. Short covering flagged as a key driver of recent strength, though also some debate about how much more of a tailwind positioning dynamics can supply (Goldman's aggregate measure of positioning and sentiment back at neutral levels and Citi said positioning and sentiment normalising). There may be some additional complications with the rotation toward global equities. Earnings expectations for both Q4 and 2023 have seen outsized declines, providing support for the competing earnings risk and low bar narratives. Disinflation one of the most credible bullish talking points right now, though also some focus on recent bounce in energy prices. Soft landing hopes underpinned by a still tight US labor market, China reopening and no European energy crisis, though this week's macro data (Empire manufacturing, retail sales, IP) has surprised to the downside and Fed focus on lagging indicators seen as another hard landing risk. Economic normalisation evident in strong services demand and easing supply chain constraints, but also playing a role in flurry of tech layoff announcements and softer discretionary spending trends.BoJ left key aspects of its monetary policy, including the policy rate, YCC band and forward guidance, unchanged. While this matched the consensus, there had been a lot of speculation about the potential for another hawkish surprise following the widening of the YCC band at the December meeting and ahead of the end of Kuroda's tenure as the head of the central bank in March. Instead, BoJ seemingly pushed back against the notion of a near-term YCC exit. It reiterated an outsized focus on market functioning and added language to the policy statement noting that it will continue with large-scale JGB purchases in order to encourage the formation of a yield curve consistent with policy guidelines for market operations. Today's development has helped push global bond yields and the yen lower. While there have been concerns that the surprise YCC band tweak late last year and accompanying expectations for a near-term exit from YCC would remove an anchor on global bond yields, there have also been thoughts the market is well-prepared for a major policy shift, particularly after the massive JGB buying operations in December.All sectors were lower today, though there was not a lot of dispersion in a market that gradually sold off the early morning's strength. The FANMAGs were mixed, with MSFT-US the biggest decliner (more layoffs announced today). Banks underperformed. Regionals lagged the larger caps but PNC-US was a big decliner on its NII/NIM miss. Consumer staples were broadly lower, particularly food, beverages, and HPCs. Energy followed crude lower (WTI broke an eight-day string of gains), with oil services and integrateds among the weak spots. Autos, China tech, cruise lines, multis, utilities, airlines, QSRs, building products, and credit cards underperformed as well. Semis, exchanges, homebuilders (rates), department stores, entertainment, lithium, TiO2 were mixed to better. Few groups definitively to the upside, but trucking was one of the market's strongest areas with some focus on JBHT-US (said freight should normalise in Q2).Imdexentered into a binding agreement to acquire Devico AS for an implied enterprise value of A$324 million. Commenting on the news, IMDEX Chief Executive Officer, Paul House, said, “We see significant value in combining our complementary product portfolios, market-leading R&D capabilities and global presence.” Shares are currently trading unchanged at $2.47.Patriot Battery Metalshas recorded its highest grade lithium drill intercept to date. In response, Darren Smith, Vice President of Exploration of the Company, comments, “As we move east, we are defining a significant high-grade zone at a coarse drill spacing of 50 to 100 m. The recently commenced winter drill program will continue to probe and delineate this area ahead of an initial mineral resource estimate planned for the first half of 2023.” Shares are currently trading 24 per cent higher at $1.085.Minbos Resourcesannounced that the last of the FEECO manufactured fertiliser plant has now left the US and is enroute to Angola, with activities ramping up in anticipation of first production H2 2023. Initial construction activities at the Cácata phosphate deposit are on target and within budget. Shares are currently trading 13.64 per cent higher at $0.125.BluGlass’Fremont laser diodes are now achieving or exceeding contract manufacturer performance benchmarks. In response, President Jim Haden said, “This technical milestone demonstrates the importance of operational control in accelerating development turns.” Shares are currently trading 6.06 per cent higher at $0.035.Knosys, a global software-as-a-service (SaaS) information technology company, is pleased to announce that Optus has signed an additional one year contract extension for the continued use of Knosys’ market leading knowledge management platform, KnowledgeIQ. The value of this contract extension is expected to exceed $1 million. In response, Knosys Managing Director, John Thompson, said “This further contract extension allows us to continue our partnership with Optus and further develop the knowledge management solution to meet their future business needs.” Shares are trading unchanged at $0.099.Kincora Copper, who is partially owned by RareX, announced the commencement of drilling at the Dunn’s North prospect situated at the brownfield Trundle project, located in the Macquarie Arc of the Lachlan Fold Belt (LFB) in NSW, Australia. John Holliday, Technical Committee chair, and Peter Leaman, VP of Exploration, commented, ““Drilling at Dunn’s North will for the first time follow up shallow ore grade mineralisation, 10 metres @ 1.99 g/t gold and 0.12 per cent copper from only 36 metres, returned above and on the margin of significant, untested, coincident magnetic and Induced Polarisation (IP) geophysical features. The target is a larger porphyry deposit responsible for that ore grade mineralisation and the geophysical features.” Shares are trading 11.11 per cent higher at $0.09.Chimeric Therapeutics, a clinical stage cell therapy company and an Australian leader in cell therapy, is pleased to announce that the first patient has been dosed in the CHM 0201 (CORE NK) + Vactosertib clinical trial, the first ever trial to assess NK cells in combination with Vactosertib in patients with advanced colorectal and blood cancers. “Both advanced colorectal cancer and acute myeloid leukaemia continue to be defined by high unmet needs in the relapse/refractory setting,” said Jennifer Chow, Chimeric CEO and Managing Director. Shares are trading unchanged at $0.08.Gold is trading at US$1782.70 an ounce.Iron ore is 1 per cent higher at US$122.70 a tonne.Iron ore futures are pointing to a 1.25 per cent rise.One Australian dollar is buying 69.11 US cents.
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