The latest market news, commentary and strategy by Adrian Rowney
5 Things that Grabbed my Attention
1. After the stronger than expected PPI data, there is a reasonable chance the Federal Reserve will increase rates by 0.5% next month.
2. Westpac (WBC) said on Friday that between 2019 & 2022 it had written $212 bn worth of loans with a serviceability buffer of just 2.5% to 3%....Are you kidding!??!...AVOID
3. NAB wrote off $158 million of bad loans last quarter....it's just the beginning of the squeeze. AVOID
4. AFR reporting that ASIC may enforce Buy Now Pay Never companies to get their customers income & expense data before approving credit. What a nightmare for them...I maintain my BLANKET AVOID on the sector.
5. Sigma Lithium which is listed in the US, shot up 25% on talk that Tesla is about to make a takeover bid....Our lithium miners likely to get a little kick on the back of that today.
ASX Market Update
ASX 200 down 63 points to 7346
Our market rolled over due to the weak lead from Wall Street....
Ingham's (ING) reported a Net Profit for the half of $17.8 million which was down 55%. The stock held up because the weaker result was already well flagged to the market....Over the past year and a bit, it was crazy to me that management were not increasing prices of its chicken while all the inputs were going up....well they have finally realised that strategy was stupid, so margins/profitability should start to head north again. BUY last sale $2.74
Even with a jump in prices, chicken will still be a far cheaper option than steak and chops, so ING won't suffer a fall in demand. In fact... as inflation bites even harder, demand for chicken will likely improve....I expect ING shares to eventually bounce back above $4.00.
#Politicians and the fake news will blame companies like ING for inflation, but that is complete and utter nonsense....It is politicians and central bankers that are the real culprits.
The Day Ahead
Reporting today: A2M, BSL, DGH, NXL, RWC, OML, TYR, ALD, VEA
- Our SPI is down 1 point
- Bitcoin down 0.75% to $24,673 (Saturday arvo price)
Movements affecting our resource stocks today (USD)
- BHP in the US down 1%
- Gold FLAT @ $1851
- Paper Silver FLAT @ $21.72
- Copper down 0.21% to $4.12
- Brent Crude down 2.8% to $83.00
- $A buys 68.79 US cents
Asian Market Update
Japan down 0.66%, China fell 0.77% and Hong Kong dropped 1.28%
China says France has lifted COVID-19 curbs on arrivals from China.🇨🇳🇫🇷
— CN Wire (@Sino_Market) February 17, 2023
With the French lifting, watch other countries follow....The Chinese have accumulated some huge savings, so I would expect to see a boom in travel once they are free to roam.
Global Market Update
DOW up 129 points to 33,826
Microsoft shares dipped 1.58% as the main stream media start freaking out about the BING AI chatbot....The Microsoft controlled AI could see scores of fake news journos get punted.
The battle between the two sides is going to be entertaining!
— Ian Miles Cheong (@stillgray) February 16, 2023
Brits down 0.1%, Germans fell 0.33% and Frenchies dipped 0.25%
Central bankers are calling this temporary....I call BS....Inflation was their MANDATE.
Key Market Summary