FTX founder arrested in the Bahamas: ASX up 0.65% at lunch

Market Reports

by Lauren Hayes

The local market has bounced back this morning, following a positive lead from Wall Street overnight, with investors looking ahead to the highly anticipated Federal Reserve meeting and US CPI data releases. At noon, the S&P/ASX 200 is 0.65 per cent or 47 points higher at 7,227.60.

Materials are dragging with tech outperforming. The SPI futures are pointing to a rise of 47 points.

In other news, Sam Bankman-Fried, the former chief executive of bankrupt crypto exchange FTX has been arrested in the Bahamas where FTX was headquartered. Bankman-Fried’s arrest was announced a day before he was scheduled to testify before the US House financial services committee in a hearing on the FTX collapse. He is expected to be extradited to the United States.

Best and worst performers

The best-performing sector is Info Tech, up 1.73 per cent. The worst-performing sector is Materials, down 0.44 per cent.

The best-performing large cap is Bendigo and Adelaide Bank (ASX:BEN), trading 7.74 per cent higher at $9.74. It is followed by shares in Yancoal Australia (ASX:YAL) and Challenger (ASX:CGF).

The worst-performing large cap is Fortescue Metals Group (ASX:FMG), trading 3.22 per cent lower at $20.44. It is followed by shares in Fisher & Paykel Healthcare Corporation (ASX:FPH) and Pro Medicus (ASX:PME).

Asian news

Asia-Pacific shares have opened in positive territory this morning.

The Nikkei 225 in Japan has added 0.85 per cent in early trade, while the Topix has inched up 1.44 per cent.

Korean benchmark Kospi has climbed 0.52 per cent and the Kosdaq has gained 0.50 per cent. the MSCI’s broadest index of Asia-Pacific shares outside Japan are up 0.13 per cent.

Usual suspects in focus for November CPI on Tuesday

The updated CPI figures are out on Tuesday, US time. The headline CPI increased 0.3 per cent month on month in November after a 0.4 per cent increase in October, pushing the year on year rate of growth down to 7.3 per cent from 7.7 per cent. Core CPI also saw up 0.3 per cent month on month, after a similar increase in October, leaving the year on year rate of growth at 6.1 per cent. Energy prices are expected to drive the slower pace of headline CPI growth, though food price inflation will remain elevated. When it comes to core inflation, there seem to be a number of the usual suspects in focus. Core goods are expected to decline again with a contraction in used-car prices, a further deceleration in new car prices, holiday discounting, economic normalisation and easing supply chain constraints among the higher-profile themes. On the core services side, shelter components are expected to remain sticky outside of the likely softness in lodging away from home following the October surge. The previews continued to discuss the lagged effects from the housing slowdown. In terms of core services ex-shelter, the tight labour market/higher wage dynamic has continued to attract scrutiny.

Fed to slow pace of rate hikes but stick with higher-for-longer messaging

The Federal Reserve is widely expected to slow its pace of rate hikes to 50 basis points on Wednesday, bringing the funds rate to 4.25-4.50 per cent. The statement seems that there is little change, although there could be a slightly dovish tweak to forward guidance if the Fed scraps expectations for "ongoing increases" in favour of language that conveys a shorter path to peak funds rate range. Previews are not surprisingly flagged as an outsized focus on the terminal rate projection in the updated dot plot. Consensus seems to be for a 50 basis points uptick to approximately 5-10 per cent, setting the stage for 75 basis points of additional rate hikes in 1H23. Current market pricing is approximately 4.92 per cent. The dot plot is also expected to show 100 basis points of rate cuts in both 2024 and 2025, putting the median 2025 dot at 2.9 per cent. Powell's press conference is likely to lean hawkish. Powell's messaging is expected to highlight the need to do more to combat inflation, prioritising of inflation against growth, the pushback against pivot expectations, the tight labour market and the elevated wage growth.

Company news

Next Science (ASX:NXS) announced that it has entered into a conditional A$10,000,000 Secured Convertible Note Deed with major shareholder, Walker Group Holdings Pty. Shareholder approval is required under ASX Listing Rule 10.1, and section 611, item 7 of the Corporations Act 2001 and receipt of all regulatory and shareholder approvals is a condition precedent to the Secured Convertible Note Deed. Next Science’s Managing Director, Judith Mitchell said: “If approved, this transaction will provide the necessary capital to allow Next Science to pursue the commercial success of all aspects of Next Science’s business as well as support our ongoing R&D program. That will be a great outcome for Next Science and its shareholders and the patients whose lives we are committed to improving.” Shares are trading down 4.4 per cent to 66 cents.

Kingwest Resources (ASX:KWR) has announced high grade drilling results and high grade resource estimation from the Menzies Goldfield in WA. In response, Kingwest Executive Chairman Greg Bittar commented: “The results will be used to further define the areas of high grade gold mineralisation and will support economic studies.” Shares are trading 9.7 per cent higher at 3 cents.

Doctor Care Anywhere (ASX:DOC), has entered into a four-year secured and guaranteed loan agreement with AXA Health to borrow up to £10,000,000 in 3 tranches. The Loan will be used by the Company for general working capital purposes in accordance with the terms of the Loan. Chairman Richard Dammery said: “AXA is Doctor Care Anywhere’s major partner and its primary source of revenue, and has provided DCA with strong support over time. The agreements announced today obviously increase DCA’s dependence on AXA, and enhance AXA’s rights in relation to the Company, but they also ensure that the Company can continue to develop innovative healthcare pathways into 2023 and beyond.” Shares are trading 35 per cent higher to 7 cents.

INOVIQ (ASX:IIQ) has confirmed positive results in the testing development for ovarian cancer. The testing confirmed the utility of EXO-NET for EV biomarker discovery with over 90 per cent accuracy for the detection of early-stage ovarian cancer. CEO Dr Leearne Hinch said: “The multivariate index assay (MIA) showed over 90 per cent accuracy for detection of early stage ovarian cancers, when the cancer can be more effectively treated and help save women’s lives.” Shares are trading 16.4 per cent higher to 71 cents.

Piedmont Lithium (ASX:PLL), a leading global developer of lithium resources critical to the U.S. electric vehicle supply chain, today announced that North American Lithium (“NAL”), an open pit mining and spodumene concentrate operation owned 75 per cent by Sayona Mining (ASX:SYA) and 25 per cent by Piedmont, was issued the last remaining permit required to restart operations at the Quebec site. Receipt of the key permit from Canada’s Department of Fisheries and Oceans paves the way for an expected restart of spodumene concentrate production in H1 2023. Executive Vice President and Chief Operating Officer of Piedmont Patrick Brindle applauded the NAL management team for reaching this important milestone. “The diligent work of NAL management over the past year has resulted in the successful issuance of all the permits required to operate the Quebec mine and concentrator. With this final permit in place, we will continue to work with our partners at Sayona toward restart of commercial operations at NAL in 2023.” Shares are trading 1.8 per cent higher to 85 cents.

Galan Lithium (ASX:GLN) announced that it has executed a Binding Term Sheet with Lithium Australia (ASX:LIT) to acquire its remaining 20 per cent interest in the Greenbushes South tenements and its 20 per cent participating interest in the Greenbushes South Joint Venture. At completion, Galan will hold a 100 per cent interest in the Greenbushes South Lithium Project which comprises four granted exploration licences, one pending exploration licence and seven prospecting licences. Galan’s Managing Director, JP Vargas de la Vega, said: “We are delighted to acquire full ownership of this highly prospective project in one of the world’s most renowned lithium districts. We have the necessary personnel in place to undertake the pending exploration programmes and workload at Greenbushes South.” Shares are trading 1.3 per cent higher to $1.22.

Careteq (ASX:CTQ) announced that its cash position has been bolstered by the receipt of $947,123 from the Australian Taxation Office under the federal government’s Research and Development (R&D) Tax Incentive program for FY2022. The tax refund relates to the R&D activities undertaken by Careteq in FY2022 expanding and scaling up its Assistive Living Technology and Medication Management solutions, which are gaining good traction with channel partners and customers in the United States, Australia and New Zealand. Shares are trading unchanged at 7 cents.

Commodities and the dollar

Gold is trading at US$1782.70 an ounce.
Iron ore is 1.9 per cent lower at US$110.25 a tonne.
Iron ore futures are pointing to a 2.2 per cent fall.
One Australian dollar is buying 67.51 US cents.

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