Wall St mixed on S&P 500 70th record close, M&As in lithium sector to gear up: ASX poised to rise


Mixed closed around the major indexes around the globe on thin volume. M&As in lithium sector to gear up with 48 companies set to trade ex-div on ASX today.

The Australian sharemarket is set to edge higher after a mixed finish with major indexes around the globe.

S&P hits 70th record high on Dow surge

Wall St closed mixed on choppy trade underpinned by thin volumes walking into the final days of the year. The Dow surged for its sixth straight session as investors continue to buy into value stocks while the S&P 500 eked out its 70th record high.

Though the action was really seen in the bond market. The 10-year treasury bond yield jumped with the rate tipping a one month high leading to weakness in tech shares, and the underperformance of the Nasdaq as traders review future company margins.

This comes as concerns about the Omicron variant continue to weigh on Wall St. The US has recorded more than 4.1 million cases this month, more than the 2.54 million in November according to Johns Hopkins University data.

Nov pending home sales fall vs expectations of rise

We also received some economic data today around the housing market. With the rush of home sales easing in November. Pending home sales fell last month by 2.2 per cent compared to a rise of 0.5 per cent from economists. The slip was attributed to lower supply and higher prices making potential buyers hesitant to buy. This comes amid a trifecta of ultra low interest rates, easy monetary policy from the Fed, and low inventory on high demand.

US crude falls as oil prices firm up

In the commodities space, oil prices firmed up for the second day after data from the Energy Information Administration showed US crude inventories fell more than expected last week amid lower severity of the Omicron variant. The report showed crude oil inventories fell by 3.576 million barrels last week, a fifth consecutive period of declines compared with market forecasts of a 3.143 million drop.

Musk offloads $1.4b Tesla shares

Meanwhile, looking at some stocks with Tesla CEO Elon Musk cashing out again. Selling another round of shares, over 934,000 of them to help cover a tax bill for the value of $1.4 Aussie billion dollars. Musk also exercised options to buy nearly 23 million shares at US$6.24 a piece, a tiny amount compared to the share price of US$1,086.19, though that’s how options work.

We are currently in transit of this Santa Claus rally which consists of the last five trading days of this year and the first two of the new year. If we do get a gain despite Omicron being the wild card, it will be another Santa Claus rally notched reaffirming a period historically to perform higher.

Wall St mixed on bond yield surge

At the closing bell, the Dow Jones gained 0.3 per cent to 36,489, the S&P 500 added 0.1 per cent to 4,793 while the Nasdaq closed 0.1 per cent lower at 15,766.

Across the S&P 500 sectors, there are three losers to winners. Starting with those, energy led the losses down 0.6 per cent, followed by communication services, and financials despite the rise in bond yield which usually lifts banks. Real estate led the gains, followed by healthcare, and utilities. Information technology managed to eke out a gain of 0.07 per cent.

The yield on the 10-year treasury note rose seven basis points to 1.55 per cent, gold shed on a weaker greenback.

European markets mixed on cautious trade

Across the Atlantic European markets closed mixed on cautious and light trade amid a spike in Covid-19 cases and the potential dent to the economic outlook.

Paris lost 0.3 per cent slightly below its recent record high, Frankfurt fell 0.7 per cent snapping a five day winning streak, and London’s FTSE added 0.7 per cent to a fresh 22-month high on the rule out of regional lockdowns.

In UK trade, resources closed mixed. BHP added 1.3 per cent, Rio fell 0.4 per cent, while oil players BP lost 0.6 per cent and Shell closed 0.8 per cent lower.

Asian markets falls led by tech giants

Asian markets closed lower, dragged down by tech giants. Tokyo’s Nikkei fell 0.6 per cent, Hong Kong’s Hang Seng lost 0.8 per cent snapping a five-session rising streak, while China’s Shanghai Composite closed 0.9 per cent lower.

Ride-hailing giant Didi plans to use a method that will allow it to list shares in Hong Kong without raising capital or issuing new stock as it takes the step to delist from Wall St according to Reuters.

ASX 200 gains to 4-mth high

Yesterday, the Australian sharemarket closed 1.2 per cent higher at 7,510 climbing to a four month high after returning from a Christmas break. The local bourse extended its gains for the fifth day led by a rise in every sector thanks to gains in miners and banks.

Consumer staples led the gains adding 2 per cent as Graincorp (ASX:GNC) rose 5.1 per cent at $8.25 lifting the sector higher. Property rose, followed by utilities and consumer discretionary while healthcare added the least.

Chalice Mining (ASX:CHN) received a tick of approval from the WA state government to start an initial low-impact drilling at the Julimar Nickel-Copper-Platinum Group Element project in Western Australia. The approval is on the conservation management plan which outlines strict environmental requirements which includes a ban of mechanised vegetation clearing. Also, the traditional owner groups have confirmed that no cultural heritage sites will be affected by the program.

The best-performing stock in the S&P/ASX 200 was Chalice Mining (ASX:CHN) closing 7.8 per cent higher at $9.41, followed by shares in Liontown Resources (ASX:LTR), and Pilbara Minerals (ASX:PLS) extending its gains for the second straight day to hit a record high.

Lithium miners poised to be snapped up amid merger frenzy

Over the past 5 trading sessions, the lithium miner has surged 17 per cent amid M&A’s as Australian miners look to expand its footprint in the lithium space while as Chinese lithium producers look to to lock in supply for their rapidly growing battery and electric vehicle industry according to The Australian. To check out what Macquarie thinks of them, click here and go to Broker Moves.

The worst-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 2.2 per cent lower at $2.67, followed by shares in Afterpay (ASX:APT), and SkyCity Entertainment Grp (ASX:SKC).

Iron ore giants closed mixed with Fortescue Metals (ASX:FMG) closing 0.2 per cent higher, BHP (ASX:BHP) eked out a 0.02 per cent gain, while Rio Tinto (ASX:RIO) shed 0.3 per cent.

The major lenders rallied to close at session highs with ANZ Bank (ASX:ANZ) leading the pack adding 1.5 per cent, Commonwealth Bank (ASX:CBA) adding 1.3 per cent, National Australia Bank (ASX:NAB) crawled from its 0.7 per cent gain to close 1.3 per cent higher, and Westpac (ASX:WBC) added 1.2 per cent.

Tyro Payments’ (ASX:TYR) transaction value for the month to date is 36 per cent higher over the same period of financial 2021, as of the last transaction processed on 24 December. The payments provider has committed to provide weekly updates to the release of its full-year results. The company has processed $3.013 billion this time, against $2.214 billion in the same month to date of December last year. Shares closed 0.7 per cent higher at $2.81.

Michael Hill (ASX:MHJ) trading update flagged to investors that the retail jewellery group expects to see earnings before interest and taxes to come in higher than the $44.6 million in the previous corresponding period in financial year 2021. Shares soared 22 per cent at $1.38.

Elsewhere, Select Harvests (ASX:SHV) jumped 2.4 per cent higher to $6.06 after reporting a fire which is now contained at its waste facility in north-west Victoria. The almond grower intends to submit a claim under its relevant policies for the entirety of its property and related business interruption. It expects almond receiving and processing will still proceed when the harvest begins in February next year.

National real estate company The Agency Group (ASX:AU1) has appointed Geoff Lucas to the role of managing director and chief executive officer as of January 28 next year. This comes after the Board and the current managing director Paul Niardone identified recruitment and growth potential on the ease side of the nation, and with that, saw the importance for the managing director to be situated accordingly. Mr Niardone, located in Western Australia has been appointed as executive director and will focus on the expansion of the financial services division and property tech opportunities. Shares closed 2.1 per cent higher at $0.05.

In another management shake up, John Karantzis is set to step down as the managing director of iSignthis (ASX:ISX) but will remain as a non-executive director amid his relocation to Cyprus, while Tim Hart will be the executive chairman on an interim basis. Mr Karantzis will focus on the European side of the business which was demerged. ISignthis shares have been suspended since 2019.

Software communications platform designer Whispir (ASX:WSP) is set to embark on a three year deal with Singapore telco giant Singtel. The $1.3 million deal enables Whispir to upgrade Singtel’s SMS alerts systems while enhancing other communications services like WhatsApp for internal users. Shares closed 6.3 per cent higher at $2.03.

SPI futures

Looking ahead, SPI futures pointing to a 0.1 per cent gain.

Broker moves

Continuing along the trend of the lithium space, let’s zero in on Pilbara Minerals. There have been mixed broker ratings on the company. We covered one last week, so I’m going to cover one from the week prior.

Ord Minnett rates Pilbara Minerals (ASX:PLS) as a buy with a price target of $2.90. The broker retains the view that the lithium market will remain in perpetual deficit and expects compound annual demand growth of 24 per cent through to 2030. On this backdrop, Ords at the time of writing this note, which was the 15th of this month, said that they were surprised lithium equities haven’t performed more strongly.

The company has the greatest leverage to spodumene of lithium stocks covered by Ord Minnett and trades the cheapest based on earnings multiples.

The broker maintains its buy rating and boosts its target price to $2.90 from $2.30, now as two weeks has passed shares have jumped 9.3 per cent higher from its target price to close at $3.17 yesterday as previously mentioned.

Ex-dividend

There are 48 companies going ex-dividend today including APA Group, Charter Hall, Dexus, Goodman Group and Transurban.

Abacus Property Grp (ASX:ABP) is paying 8.75 cents unfranked
Australian Unity Off (ASX:AOF) is paying 3.8 cents unfranked
APA Group (ASX:APA) is paying 25 cents unfranked
Aspen Group (ASX:APZ) is paying 3.1 cents unfranked
Arena REIT (ASX:ARF) is paying 3.95 cents unfranked
Aventus Group (ASX:AVN) is paying 5 cents unfranked
BWP Trust (ASX:BWP) is paying 9.02 cents unfranked
Carindale Property (ASX:CDP) is paying 12.5 cents unfranked
Charter Hall Group (ASX:CHC) is paying 19.66 cents 42.37 per cent franked
Centuria I REIT (ASX:CIP) is paying 4.325 cents unfranked
Chtr H Lwr (ASX:CLW) is paying 7.62 cents unfranked
Cromwell Prop (ASX:CMW) is paying 1.625 cents unfranked
Centuria Capital (ASX:CNI) is paying 5.5 cents 21.81 per cent franked
Centuria Office REIT (ASX:COF) is paying 4.15 cents unfranked
Charter Hall Soc In (ASX:CQE) is paying 4.225 cents unfranked
Charter Hall Retail (ASX:CQR) is paying 11.7 cents unfranked
Dexus Conv Ret REIT (ASX:DXC) is paying 5.725 cents unfranked
Dexus Industria REIT (ASX:DXI) is paying 4.325 cents unfranked
Dexus (ASX:DXS) is paying 28 cents unfranked
Elanor Commercial Property Fund (ASX:ECF) is paying 2.35 cents unfranked
Elanor Investors Group (ASX:ENN) is paying 8.8 cents unfranked
Elanor Retail Property Fund (ASX:ERF) is paying 2.8 cents unfranked
Forager Australian Shares Fund (ASX:FOR) is paying 4 cents unfranked
Gryphon Capital (ASX:GCI) is paying 0.77 cents unfranked
Garda Diversified Property Fund (ASX:GDF) is paying 1.8 cents unfranked
GDI Property Group Ltd (ASX:GDI) is paying 3.875 cents unfranked
Goodman Group (ASX:GMG) is paying 15 cents unfranked
Growthpoint Property (ASX:GOZ) is paying 10.4 cents unfranked
Healthco Healthcare and Wellness Reit (ASX:HCW) is paying 3 cents unfranked
Homeco Daily Needs (ASX:HDN) is paying 2.08 cents unfranked
Hotel Property (ASX:HPI) is paying 10.2 cents unfranked
KKR Credit Inc Fund (ASX:KKC) is paying 1 cents unfranked
Kirkland Lake Gold (ASX:KLA) is paying 22.3601 cents unfranked
Mirvac Group (ASX:MGR) is paying 5.1 cents unfranked
Newmark Property (ASX:NPR) is paying 0.68 cents unfranked
National Storage (ASX:NSR) is paying 4.6 cents unfranked
Qualitas Real Estate Income Fund (ASX:QRI) is paying 0.6315 cents unfranked
Reef Casino Trust (ASX:RCT) is paying 16.58 cents unfranked
REP Essential Prop (ASX:REP) is paying 1.0919 cents unfranked
Rural Funds Group (ASX:RFF) is paying 2.9331 cents unfranked
SCA Property Group (ASX:SCP) is paying 7.2 cents unfranked
Sunland Group Ltd (ASX:SDG) is paying 10 cents fully franked
Stockland (ASX:SGP) is paying 12 cents unfranked
360 Capital Enhanced Income Fund (ASX:TCF) is paying 3 cents unfranked
Transurban Group (ASX:TCL) is paying 15 cents unfranked
360 Capital Group (ASX:TGP) is paying 1.5 cents unfranked
360 Capital REIT (ASX:TOT) is paying 1.5 cents unfranked
Waypoint REIT (ASX:WPR) is paying 4.21 cents unfranked

Quarterly reports

Orion Metals (ASX:ORM)
Renergen CDI (ASX:RLT)

Commodities

Iron ore has gained 0.3 per cent to US$118.05. Its futures point to a 2.2 per cent gain.

Gold lost $5.30 or 0.3 per cent to US$1806 an ounce, silver was down $0.25 or 1.1 per cent to US$22.87 an ounce.

Oil added $0.53 or 0.7 per cent to US$76.51 a barrel.

Currencies

One Australian Dollar at 8:15 AM has strengthened since yesterday, buying 72.51 US cents (Wed: 72.28), 53.77 Pence Sterling, 83.37 Yen and 63.88 Euro cents.

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