Evening Wrap: ASX 200 higher, uranium stocks break out + S&P 500 faces inflation test
The S&P/ASX 200 closed 16 points higher, up 0.23%.
The local sharemarket inches higher despite a strong lead from Wall Street, Australia's consumer confidence remains near recession lows while business confidence falters, JPMorgan expects the S&P 500 to trade flat to up to 0.5% after tonight's inflation print, an ASX-listed small cap receives a takeover bid at a massive 165.3% premium and uranium stocks are breaking out ... selectively.
Let's dive in.
Today in Review
Tue 13 Jun 23, 4:27pm (AEST)
Name | Value | % Chg |
---|---|---|
Major Indices | ||
ASX 200 | 7,138.9 | +0.23% |
All Ords | 7,329.1 | +0.23% |
Small Ords | 2,805.4 | +0.24% |
All Tech | 2,401.2 | +2.36% |
Emerging Companies | 2,043.6 | +0.11% |
Currency | ||
AUD/USD | 0.6762 | +0.17% |
US Futures | ||
S&P 500 | $4,355.0 | +0.28% |
Dow Jones | $34,126.0 | +0.13% |
Nasdaq | $14,873.0 | +0.49% |
Name | Value | % Chg |
---|---|---|
Sector | ||
Information Technology | 1,810.6 | +3.76% |
Communication Services | 1,541.2 | +1.05% |
Health Care | 44,378.7 | +0.98% |
Consumer Discretionary | 2,914.9 | +0.94% |
Consumer Staples | 12,923.1 | +0.70% |
Financials | 5,997.8 | +0.55% |
Industrials | 6,729.5 | +0.40% |
Utilities | 8,746.4 | +0.29% |
Real Estate | 3,013.7 | -0.28% |
Materials | 17,867.2 | -0.77% |
Energy | 10,710.3 | -1.32% |
ASX 200 Session Chart
Choppy but higher session (Source: Market Index)
Markets
The S&P 500 rallied to 14-month highs overnight which means the ASX 200 must be in for some big gains after the long weekend. Syke.
The heavyweight resource sector is struggling for upside amid China's disappointing economic recovery. Last week, inflation in China remained at low levels and its producer price index fell 4.6% month-on-month, marking the steepest decline in seven years. It'll be difficult for our market to rally without the participation of the resource sector.
On the flip side, the S&P/ASX 200 Info Tech Index has staged a V-shaped bounce after falling 3.8% last Thursday. The Index is back at levels not seen since April 2022. We're seeing gains across the board, including Wisetech (+5.2%), Xero (+4.2%) and NextDC (+3.5%).
Economy
Australia’s consumer confidence rose 0.2% to 79.2 in June, according to Westpac Economics.
The Index has now been near recession lows for the past 12 months
Inflation remains the dominant drag on confidence (62% of consumers), followed by budget and taxation (43%), economic conditions (40%) and employment (32%)
Major purchases deteriorated further in June, back down near extreme lows seen in February and March. The sub-index fell 6.5% to 76.4
Consumer risk aversion hit all-time highs in June, with the report noting “safe-havens and paying down debt are very heavily favoured.”
Paying down debt is at its highest since the option was included in 1997, while riskier options like real estate reflected just 5% of respondents, near all-time lows
Australia’s business confidence eased to -4 points in May from 0 in the previous month, according to NAB Economics.
“The fall in conditions now appears to be accelerating, and while they remain a touch above their long-run average they are well below the levels we saw in early 2023.”
“Leading indicators weakened, with forward orders down 6 pts to -5 index points suggesting that conditions will ease further in coming months and capacity utilisation remaining high but edging lower.”
“Historically there have been very few periods of negative orders outside of downturns in the economy.”
“Both input and output price growth ticked up in the month and remain high. Labour costs growth rose to 2.2% in quarterly equivalent terms, while input prices rose to 2.5%.”
Latest news
Graphite vrc syr
A turnaround for graphite is brewing: Which ASX miners should you be watching?
Tue 13 Jun 23, 12:10pm (AEST)
Materials bhp bsl
Why the commodities rally may not last much longer (and what it means for ASX materials stocks)
Tue 13 Jun 23, 10:02am (AEST)
Broker Watch alu nxt
ASX tech stocks: Broker views and Morningstar’s top pick
Tue 13 Jun 23, 9:49am (AEST)
Market Wrap
Morning Wrap: S&P 500 marks highest close since April 2022, ASX 200 to rise
Tue 13 Jun 23, 8:32am (AEST)
Weekend Newsletter
Educational Piece: 4 key candlestick chart patterns
Mon 12 Jun 23, 9:00am (AEST)
Market Wrap
Evening Wrap: ASX 200 higher, iron ore stocks trying to bottom + Citi cuts its gold outlook
Fri 09 Jun 23, 4:52pm (AEST)
More News
Market Insights
It's CPI time: JPMorgan's playbook
US inflation data will be released at 10:30 pm AEST tonight. Here's what the market is expecting for the May print:
Headline inflation up 0.2% MoM from 0.4% in the previous month
Headline inflation to ease to 4.1% YoY from 4.9%
Core inflation up 0.4% MoM unch
Core inflation to fall to 5.3% YoY from 5.5%
As for how the S&P 500 will react, here's what JPMorgan expect:
May CPI reading | S&P 500 reaction | Probability |
---|---|---|
4.9% or higher | Down 2.5% to 3.0% | 2.5% |
4.5% to 4.8% | Down 1% to 1.5% | 15.0% |
4.2% to 4.4% | Flat to up to 0.5% | 35.0% |
4.0% to 4.2% | Up 0.75% to 1.25% | 40.0% |
3.9% or lower | Up 1.5% to 2.0% | 7.5% |
Cybersecurity M&A
I'm not too familiar with the ASX-listed cybersecurity space but I did come across an interesting takeover today for Tesserent (ASX: TNT). It entered into a Scheme Implementation Deed with Thales Australia at a massive 165.3% premium to its last closing price of 4.9 cents per share.
Thematically, cybersecurity is a rather appealing space given all the breaches we've seen across major organisations like Optus, Medicare, IPH, Latitude Financial and more. The Australia Government also announced almost $200 million of investments into the cyber space as part of its 2023-24 fiscal year budget.
As for ASX-listed cybersecurity stocks, they've been great at selling the narrative and then creating bagholders. The takeover for Tesserent brings the stock just 7% shy of breakeven year-to-date.
Tesserent 12-month price chart (Source: Market Index)
ArchTIS (ASX: AR9) is another name that's down 20% year-to-date and 35% in the last twelve months. Whereas Dropsuite (ASX: DSE) is arguably the odd one out, up 64% this year.
Anyway, does this takeover shake up the sector a little bit? Will we see a bit of a re-rate follow through for names like ArchTIS?
Uranium: It's breaking out ... selectively
I've been following uranium for quite some time now. And for the most part, it's been as sector that starts to move out and then whipsaws back into its longstanding trading range.
But now, uranium spot prices are starting to break out and trading at the highest level since May 2022. Is this the beginning of something?
Uranium spot price (Source: TradingEconomics)
A lot of names have also remained rangebound, even after the recent rally.
There's only one name that's breaking out in a meaningful manner. And that's Boss Energy (ASX: BOE) - It's based in Australia (whereas several ASX-listed names are based in Namibia) and expects to hit production status in the December quarter.
Boss Energy 12-month price chart (Source: Market Index)
Interesting news and movers
Trading higher
+144.9% Tesserent (TNT) – Thales to acquire at 13 cps
+12.0% Sezzle (SZL) – Continuation rally, up 14.4% in previous three
+6.6% Electro Optic Systems (EOS) – Government contract
Uranium sector move: Alligator Energy (+19.4%), Bannerman (+17.7%), Deep Yellow (+10.2%), Paladin Energy (+9.4%), Lotus Resources (+8.1%), 92Energy (+6.0%)
Tech sector move: Wisetech (+5.0%), Xero (+4.3%), NextDC (+3.5%)
Trading lower
-5.9% Domino’s Pizza (DMP) – Exits Danish markets and guidance
-7.5% Terracom (TER) – Coal sales update
-2.9% Bapcor (BAP) – Downgraded by Citi
Nickel sector move: Ecograf (-8.3%), Widgie Nickel (-8.2%), Nickel Mines (-7.7%), Pacific Nickel Mines (-5.1%), Centaurus Metals (-2.5%)
Coal sector move: Yancoal (-4.5%), Stanmore (-2.2%) Whitehaven (-1.9%)
Energy sector move: Woodside (-1.6%), Beach Energy (-1.9%)
Broker notes
Broker notes are taking a day off today.
Scans
Top Gainers
Code | Company | Last | % Chg |
---|---|---|---|
AHI | Advanced Health I... | $0.40 | +370.59% |
TNT | Tesserent Ltd | $0.12 | +144.90% |
SNX | Sierra Nevada Gol... | $0.145 | +45.00% |
ALO | Alloggio Group Ltd | $0.23 | +43.75% |
PRMDG | Prominence Energy... | $0.02 | +42.86% |
View all top gainers
Top Fallers
Code | Company | Last | % Chg |
---|---|---|---|
WNR | Wingara AG Ltd | $0.023 | -36.11% |
BOA | Boadicea Resource... | $0.05 | -35.07% |
FNX | Finexia Financial... | $0.22 | -21.43% |
MBX | My Foodie BOX Ltd | $0.011 | -21.43% |
AQC | Australian Pacifi... | $0.105 | -19.23% |
View all top fallers
52 Week Highs
Code | Company | Last | % Chg |
---|---|---|---|
AHI | Advanced Health I... | $0.40 | +370.59% |
PRMDG | Prominence Energy... | $0.02 | +42.86% |
AZS | AZURE Minerals Ltd | $0.825 | +32.00% |
EMC | Everest Metals Co... | $0.13 | +30.00% |
SLM | Solis Minerals Ltd | $0.95 | +19.50% |
View all 52 week highs
52 Week Lows
Code | Company | Last | % Chg |
---|---|---|---|
WNR | Wingara AG Ltd | $0.023 | -36.11% |
BOA | Boadicea Resource... | $0.05 | -35.07% |
FNX | Finexia Financial... | $0.22 | -21.43% |
MBX | My Foodie BOX Ltd | $0.011 | -21.43% |
SCT | Scout Security Ltd | $0.018 | -18.18% |
View all 52 week lows
Near Highs
Code | Company | Last | % Chg |
---|---|---|---|
VLUE | Vaneck MSCI Inter... | $23.66 | +0.25% |
SEMI | Global X Semicond... | $11.66 | +3.55% |
MSTR | Morningstar Inter... | $9.16 | +0.55% |
IIND | Betashares India ... | $10.38 | -0.29% |
DUG | DUG Technology Ltd | $1.18 | +0.86% |
View all near highs
Relative Strength Index (RSI) Oversold
Code | Company | Last | % Chg |
---|---|---|---|
VGB | Vanguard Australi... | $45.94 | +0.15% |
CAN | Cann Group Ltd | $0.17 | +21.43% |
HVN | Harvey Norman Hol... | $3.20 | -0.31% |
WAX | Wam Research Ltd | $1.005 | -1.95% |
SEK | Seek Ltd | $21.84 | +1.11% |
View all RSI oversold