Investors cautious ahead of midterm elections. Picture Getty
ASX Large Caps: Shares up 0.3pc but investors cautious ahead of US midterm elections tonight
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- ASX 200 up 0.3% on Tuesday
- US midterms elections tonight
- James Hardie crashes following Q2 update
Aussie shares were steady on Tuesday, riding on the back of Wall St’s strong session overnight.
US stocks rose 1% across the board, largely ignoring a supply warning from Apple which said that Covid restrictions in China are slowing shipments of its iPhone 14 Pro and Pro Max models.
China’s COVID-19 outbreak have flared up again in the manufacturing hub city of Guangzhou and other major Chinese cities.
“We should adhere to the principle of putting people and lives first, and the broader strategy of preventing imports from outside and internal rebounds,” said Hu Xiang, a China disease control official.
The US midterms election later tonight is also keeping investors edgy in Asian hours today.
“The democratic lock on Congress is likely coming to an end,” said OANDA analyst Edward Moya.
“A divided government means we won’t be seeing a big fiscal stimulus response next year when the economy is in a recession.”
Meanwhile, consumer confidence in Australia has dropped 1.5% last week, according to an ANZ-Roy Morgan survey released today.
It was the sixth consecutive weekly decline in confidence, taking the index to levels not seen since the height of the pandemic of April 2020.
Only 21% of Australians (down 2 ppts) say their families are ‘better off’ financially than this time last year, compared to 47% (up 1ppt) that say their families are ‘worse off’ financially.
“The continued decline in confidence seems to finally be having some impact on spending. ANZ data for October indicates the usual run-up in spending seen late in the month is not occurring,” said ANZ Head of Australian Economics, David Plank.
This data was followed by the weekly inflation expectations report, which showed a rise of 0.2 percentage points to 6.8% last week, its highest value on record going back to 2010.
“Falling confidence and rising inflation expectations creates a difficult mix for the RBA,” said Plank.
Among the winners today were Consumer Staples (up 1.5%) and Healthcare (up 1%).
The Energy sector was the worst performer, down 2%, as oil prices slumped on China’s concerns.
Stocks making headlines today include James Hardie (ASX:JHX), which crashed 13% after warning that “over the past 45 days, we have seen a significant change to the outlook of housing market activity for the second half of our fiscal year in most of the geographies where we participate”.
“In North America … based on the significant decline in market expectations, which we have reviewed with our customer partners, we now expect second half volume growth to be between negative 5% and negative 8%, versus the prior year, which is a significant reduction to our August/September projections,” it says.
“In Australia, labour shortages and unfavourable weather conditions are constraining housing market activity despite strong contracted backlogs.
“In addition, we have had customers in Australia and New Zealand ask to lower inventory levels as we enter this period of market uncertainty.”
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| MIN | Mineral Resources. | 79.13 | 5% | 663,116 | $14,305,639,014 |
| PLS | Pilbara Min Ltd | 5.435 | 5% | 27,667,162 | $15,534,167,402 |
| GQG | GQG Partners | 1.505 | 5% | 575,498 | $4,252,039,825 |
| A2M | The A2 Milk Company | 5.755 | 4% | 4,394,066 | $4,097,547,469 |
| TLC | The Lottery Corp | 4.47 | 4% | 9,407,031 | $9,570,818,323 |
| CXO | Core Lithium | 1.5025 | 4% | 30,720,828 | $2,661,317,781 |
| AKE | Allkem Limited | 15.48 | 3% | 2,950,822 | $9,539,364,967 |
| SQ2 | Block | 97.6 | 3% | 122,918 | $3,444,582,674 |
| IGO | IGO Limited | 15.73 | 3% | 2,648,913 | $11,578,624,861 |
| OCL | Objective Corp | 14.56 | 3% | 21,028 | $1,346,286,287 |
| SYR | Syrah Resources | 2.57 | 2% | 2,554,365 | $1,683,132,482 |
| VUL | Vulcan Energy | 7.72 | 2% | 395,213 | $1,080,748,170 |
Lithium stocks rallied across the board today as spot lithium prices remained buoyant and spodumene prices are expected to peak at US$6500/t.
The usual lithium suspects Pilbara Minerals (ASX:PLS) and Core Lithium (ASX:CXO) were up around 5%.
The Lottery Corp (ASX:TLC) was up almost 4% after announcing in its AGM that Powerball, its largest jackpot game, will have an increase in the subscription price toward the end of FY23 – from $1.10 to $1.20 per game.
A2Milk (ASX:A2M) rose 4% after commencing on-market buy-back of up to NZ$150 million on both the NZX and ASX.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| JHX | James Hardie Indust | 28.83 | -14% | 4,201,064 | $14,880,417,846 |
| SGM | Sims Limited | 11.52 | -10% | 2,790,447 | $2,470,303,088 |
| NHC | New Hope Corporation | 5.97 | -7% | 4,924,836 | $5,666,642,327 |
| STO | Santos Ltd | 7.54 | -6% | 12,138,531 | $26,593,997,658 |
| WHC | Whitehaven Coal | 9.455 | -5% | 12,315,824 | $9,256,622,898 |
| 360 | Life360 Inc. | 6.435 | -5% | 831,490 | $1,263,129,802 |
| NVX | Novonix Limited | 2.47 | -5% | 2,884,988 | $1,260,500,951 |
| MEZ | Meridian Energy | 4.31 | -4% | 14,239 | $5,650,099,498 |
| CRN | Coronado Global Res | 2.04 | -3% | 6,852,322 | $3,537,317,370 |
| CSR | CSR Limited | 4.63 | -3% | 3,142,915 | $2,289,554,017 |
| MCY | Mercury NZ Limited | 5.09 | -3% | 8,631 | $7,262,681,721 |
| GUD | G.U.D. Holdings | 7.635 | -3% | 176,883 | $1,107,432,311 |
| CQE | Charter Hall Soc In | 3.245 | -3% | 175,011 | $1,226,154,421 |
Recycling company Sims (ASX:SGM) fell 10% after providing a guidance investors didn’t like.
Sims said in light of the difficult trading environment, it expects second half EBIT to be in the range of $65 million to $75 million, a significant decline on the underlying EBIT of $361.7 million in the first half.
