Markets slid as Rio Tinto targets lithium

Stocks slid Wednesday as the Fed delivered a widely-anticipated 50 basis point rate hike at the conclusion of its December policy meeting

Major averages hit their lows of the session after Federal Reserve Chairman Jerome Powell signaled more data was needed before the central bank would meaningfully change its view of inflation.

The Fed Chair said “The inflation data received so far for October and November show a welcome reduction in the monthly pace of price increases. But it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

Overnight the Dow Jones Industrial Average fell 142.95 points, or 0.42 per cent, to 33,965.69. The S&P 500 declined 0.61 per cent to 3,995.21. The Nasdaq Composite dropped 0.76 per cent to 11,170.89.

In company news shares, in Moderna jumped on promising trial results of a cancer vaccine this week, ralling over 20 per cent the past two trading sessions. The drugmaker’s stock rose after the company announced data showing that its personalised melanoma vaccine, coupled with a Merck treatment, drastically reduced patients’ risk of recurring disease or death.

And Tesla shareholders are becoming increasingly worried that Musk is too distracted by his work at Twitter. The electric carmaker’s stock is down 52 per cent this year. One longtime Tesla investor tweeted yesterday at the Tesla board: “What is the plan? Who is running Tesla and when is Elon coming back?” To generate more advertising revenue, Twitter is said to be weighing a plan to force users to agree to personalised ads unless they subscribe to Twitter Blue.

And the AFR is reporting that RIO Tinto (ASX:RIO) is looking to pull out the cheque book to look at lithium assets- analysts are tipping the company will have $20b in cash to pursue lithium next year . Speculation is that Sayano Mining could be the logical target.

And in commodity news Goldman Sachs sees gold as a better portfolio diversifier than bitcoin. Goldman Sachs expects gold to outperform the highly volatile bitcoin over the long-term considering tighter liquidity should be a smaller drag on gold as it is more exposed to real demand drivers. Note that Goldman's analysis showed that traders use gold to hedge against inflation and dollar debasement, while bitcoin resembles a risk-on high-growth tech company stock. Additionally, Goldman notes that the Bitcoin's volatility to the downside is enhanced by systemic concerns as several large players filed for bankruptcy.

Across the sectors no market leaders today - best performing thematics included hydrogen, Chinese US listed companies, biotech & live streaming. While poor performers included lithium, SPACs & Tesla related companies.

Futures

The SPI futures are pointing to a 0.8 per cent fall.

Currency

One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 68.63 US cents (Wed: 68.53 US cents).

Commodities

Iron ore futures are pointing to a 1.6 per cent gain. Iron ore is 0.5 per cent lower at US$109.75 tonne.
Gold lost 0.4 per cent. Silver gained 0.6 per cent. Copper rose 0.4 per cent and oil gained 2.6 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower. Paris fell 0.2 per cent, Frankfurt lost 0.3 per cent and London’s FTSE closed 0.1 per cent lower.

In Asian markets, Tokyo’s Nikkei added 0.7 per cent, Hong Kong’s Hang Seng rose 0.4 per cent and China’s Shanghai Composite closed flat.

Yesterday, the Australian sharemarket added 0.7 per cent to close at 7251.

Ex-dividends

Plato Inc Max (ASX:PL8) is paying 0.55 cents fully franked

Dividends payable

Australia and New Zealand Banking Group (ASX:ANZ)
Liberty Financial Group Ltd (ASX:LFG)
My Food Bag Group (ASX:MFB)
Pendal Group (ASX:PDL)
ResMed Inc (ASX:RMD)
Waterco (ASX:WAT)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.


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