Jobs surge as jobless rate dives 5.1%, Why Ords rates Praemium as a buy: ASX tracking 0.3% lower

Market Reports

by Melissa Darmawan

The Australian sharemarket fell at the open following Wall St’s performance as the US Fed kept rates steady, yet brought forward expectations on future rate rises.

Energy and Materials were the biggest losers down 2.1 per cent with Financials as the best performer up 1.2 per cent. Banks are in positive territory as ANZ (ASX:ANZ) leads ahead from its peers, up 2.4 per cent. Commonwealth Bank (ASX:CBA) reset fresh highs, gained 1.5 per cent to $106.39 on a rise in bond yields. Government bond yields provide a benchmark for bank lending.

Travel stocks had a poor take-off on four known Covid-19 cases in Sydney with Webjet (ASX:WEB) down 2 per cent out of its cohort.

Heavyweight miners tumbled over 2 per cent as iron ore futures point to a 0.2 per cent fall. Fortescue Metals (ASX:FMG) down 2.7 per cent followed by Rio Tinto (ASX:RIO) lost 2 per cent while BHP (ASX:BHP) is 1.6 per cent lower.

Betmakers Technology (ASX:BET) went into a trading halt following receiving an acquisition proposal for $4 billion. Coles (ASX:COL) is trading 4.3 per cent lower after its strategy update this morning. Whitehaven Coal (ASX:WHC) plummeted 10.5 per cent following its trimmed full year production guidance.

On a rosier note, Sonic Healthcare (ASX:SHL) is up 0.2 per cent on news to snap up the $60 million revenue generating Canberra Imaging Group. Seven West Media (ASX:SWM) soared 18.7 per cent following a positive Q4 trading update.

On the precious metals front, Northern Star Resources (ASX:NST) dived 6.3 per cent while Evolution Mining (ASX:EVN) skid 4 per cent on the pullback in gold against the stronger greenback.

At noon, the S&P/ASX 200 is 0.32 per cent or 24.00 points lower at 7362.20.

ASX futures

The SPI futures are pointing to a fall of 39 points.

Local economic news

The unemployment rate fell to 5.1 per cent in May back to the level in February 2020 with 115,000 new jobs added to the economy beating expectations according to the Australian Bureau of Statistics. Westpac Bank economists forecast a gain of 30,000 in employment with unemployment at 5.7 per cent. The participation rate increased 0.3 percentage points to 66.2 per cent. May was the seventh consecutive monthly fall in the unemployment rate.

Company news

Whitehaven Coal (ASX:WHC) shaves its full-year production guidance to 20.4 million tonnes (Mt) from its range of 20.6 to 21.4 million tonnes after “downtime” in the Narrabri mine and a weaker performance at Gunnedah in NSW.

Grocery retail giant Coles (ASX:COL) is stepping up its innovation game, upsizing its digitisation budget by $1.4 billion in a bid to reclaim missed growth opportunities during the pandemic-induced panic buying.

Medical pathology provider Sonic Healthcare (ASX:SHL) is set to acquire Canberra Imaging Group in efforts to expand their imaging division footprint in the country.

Content producer Seven West Media (ASX:SWM) has released better-than-expected guidance for FY21 underlying profit of between $250 million and $255 million, which represents a premium of $10 million to $15 million on market speculation.

Broker moves

Ord Minnett rates wealth platform provider Praemium (ASX:PPS) as a buy with a price target of $1.35. The broker changed its valuation approach for the company due changing industry dynamics. Ords moves to a sum-of-the-parts methodology to better reflect value across various parts of the business. Its notes that Powerwrap nor their international business are profitable at this point, the broker observes improving opportunities from ongoing investment and raises the target price to $1.35 from $1.00. Shares in Praemium (ASX:PPS) are flat at $0.95.

Best and worst performers

The best-performing sector is Financials, up 1.09 per cent while the worst-performing sector is Materials, down 2.04 per cent.

The best-performing stock in the S&P/ASX 200 is Netwealth Group (ASX:NWL) trading 6.72 per cent higher at $16.83 followed by shares in Nuix (ASX:NXL) and Austal (ASX:ASB).

The worst-performing stock in the S&P/ASX 200 is Whitehaven Coal (ASX:WHC) trading 10.54 per cent lower at $1.82. It is followed by shares in Redbubble (ASX:RBL) and Northern Star Resources (ASX:NST).

Commodities and the dollar

Gold is trading at US$1822.25 an ounce.
Iron ore is 3.5 per cent lower at US$214.08 a ton.
Iron ore futures are pointing to a fall of 0.2 per cent.
One Australian dollar is buying 76.35 US cents. 

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