What Matters Today in Markets: Listen Here each morning
The ASX200 finished fairly flat yesterday as a stronger banking sector and some M&A offset weakness amongst the resources, although the Lithium stocks bucked the trend as the highly acquisitive Allkem (AKE) joined forces with US listed Lithium producer, Livent (LTMN US) in an all share merger – more on this below.
It was pleasing to hear from multiple companies with positive earnings releases yesterday with GrainCorp (GNC) boosting full year earnings guidance, Scentre Group (SCG), the owner of Westfield malls saying occupancy was running at 99% as they remain on track to meet the top end of their prior guidance, Goodman Group (GMG) upgraded growth numbers, now expecting earnings to be 15% higher in FY23 versus the previously stated 13.5% while explosives business Orica (ORI) also delivered a strong 1H23 performance.
Data centre operative NEXTDC (NXT) outlined a meaningful expansion to their capacity, easily raising $618m to fund it at a tight 8% discount to their last close. Data centres are a growing area with other companies (such as Goodman) now ramping up their capabilities in the space. The market concern around utilization at some NXT facilities has been dealt a blow, and this raise will provide a good opportunity for the 6% shorts to cover.
Resources were an obvious point of weakness yesterday picking the overnight moves well as recessionary fears gain momentum. US bond yields are pricing in interest rate cuts this side of Christmas showing the markets concern about a looming slowdown.
- We believe bouts of recessionary fears will be common place for the remainder of the year at least, meaning we can be patient increasing our resource exposure.
Overnight, stocks were mixed after data showed a cooling jobs market which comes close on the heels of more benign inflation, producer prices were also below expectations implying the Federal Reserve’s policy-tightening campaign may finally be having an effect.
This morning, SPI Futures are pricing a decline of 0.11% with commodities set to underperform, BHP off $1 in the U.S doesn’t help.
- We are sticking to our “buy weakness and sell strength” mantra for 2023, as the markets perception ebbs and flows around a looming recession.
