by Peter Milios
The two-day rally for US equities came to an abrupt end and bond yields soared as hawkish comments from Fed officials and another round of strong earnings reports raised expectations the Fed would hike interest rates even more than anticipated to fight inflation.
The September jobs data released shows that the net employment added 900 jobs, missing forecasts of a gain of 25,000 new positions.
At noon, the S&P/ASX 200 is 1.00 per cent or 68.20 points lower at 6731.90.
The SPI futures are pointing to a fall of 53 points.
Best and worst performers
The best-performing sector is Energy, up 2.93 per cent. The worst-performing sector is Information Technology, down 3.55 per cent.
The best-performing stock in the S&P/ASX 200 is Novonix (ASX:NVX), trading 12.21 per cent higher at $2.39. It is followed by shares in Woodside Energy (ASX:WDS) and Chalice Mining (ASX:CHN).
The worst-performing stock in the S&P/ASX 200 is Megaport (ASX:MP1), trading 11.04 per cent lower at $5.88. It is followed by shares in Evolution Mining (ASX:EVN) and Block (ASX:SQ2).
Asian markets
Shares in the Asia-Pacific are trading lower on Thursday as economic fears weigh.
In Japan, the Nikkei 225 opened 0.98 per cent lower and the Topix was down 0.56 per cent.
South Korea’s Kospi dipped 0.78 per cent and the Kosdaq was 0.12 per cent lower. The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.37 per cent.
China is expected to announce its one-year and five-year loan prime rates Wednesday. The offshore yuan touched a record low against the U.S. dollar overnight, weakening to 7.2745 per dollar. It last traded at 7.2690. The Japanese yen reached yet another fresh 32-year low of 149.90 against the greenback, and was last at 149.85.
Japan exports firmer than expected, details solid
The customs trade deficit was JPY2,094.0B in September, compared to expectations of JPY2,154.7B, easing from a record JPY2,820.0B in the previous month. Exports rose 28.9 per cent against the consensus of 26.6 per cent and followed a revised 22.0 per cent in August. Triple-digit surge in autos to all major regional markets contributed about a third of the aggregate. Metallurgical fuel and tech parts were the other notable drivers. Imports grew 45.9 per cent vs consensus 44.9 per cent and 49.9 per cent in the prior month. Fossil fuels continued to soar. Customs-cleared yen average was down 27.3 per cent on the year. Underlying momentum bolstered by 3.7 per cent increase in export volumes after six straight declines, while imports fell for the first time since April. Recent narrative surrounding external demand has been subdued amid elevated risks of recession in much of the global economy. Attention turns to BOJ real trade indices for clearer GDP implications after last month’s data pointed to neutral contribution to Q3 growth.
Company news
The big news overnight was the awarding of $2.8 billion in grants for EV battery production from the Biden administration with the grants subject to some further negotiations. Novonix (ASX:NVX), Piedmont (ASX:PLL), and Syrah (ASX:SYR) were among the recipients. Novonix announced today it will receive $150m, which will be dedicated to expansion of domestic production of high-performance, synthetic graphite anode materials. Novonix’s Co-Founder and CEO Dr Chris Burns commented: “We are proud to have been selected to negotiate this funding in recognition of our readiness to accelerate the domestic battery supply chain and meet growing global demand from the electric vehicle and stationary grid storage markets. Since inception, our mission has been to enhance batteries through innovation and pave the way for the clean energy transformation. We are excited to partner with the US Department of Energy to further our mission of establishing a domestic supply chain for synthetic graphite used in lithium-based batteries and creating long-term sustainable value for our stakeholders.” Shares in Novonix are trading 15.5 per cent higher at $2.46, while shares in Piedmont are up 8 per cent at 91 cents and Syrah is trading 14 per cent higher at $2.14.
Taruga Minerals (ASX:TAR) announced today that their second batch of key assays have been returned and the results were exceptional. It was the highest grades of rare earths that they have seen at the Morgan Creek’s project. CEO Thomas Line commented: “The new results increase the mineralised strike at Morgans Creek from 1.4km to 4.3km. We are excited to return to complete systematic drilling over the Yednalue formation and other new clay-hosted REE targets at Morgans Creek early in Q1 2023.“ Shares are trading 7.7 per cent higher at 4 cents.
Askari Metals (ASX:AS2) has signed a strategic agreement with a Shanghai-listed lithium heavyweight to develop Australian lithium assets. The agreement is in relation to the development of the Barrow Creek (NT) and Eastern Pilbara Lithium (WA) lithium projects. Executive Director Mr Gino D’Anna stated: “Our aggressive exploration mandate has enabled us to delineate areas of high-priority and we are rapidly planning the re-commencement of field activities at our lithium exploration projects, including the recently acquired Myrnas Hill Lithium Project.” Shares are trading 16.5 per cent higher at 46 cents.
icetana (ASX:ICE), a global software company providing artificial intelligence solutions to detect real-time anomalous events on video surveillance systems, released its activities report and Appendix 4C for the quarter ended 30 September 2022 (Q1 FY23) this morning. Matt Macfarlane, CEO of icetana, commented: “Our enhanced product took a leap forward this quarter, with the initial launch of Version 2 (next generation) and early feedback from early trial customers has been very promising. I am pleased with the changes to our shareholdings that has resulted in investors who take a long term perspective on investing and have additional cash available to invest as the business grows. Previous value-adding venture fund investors were unable to deploy additional capital due to the life cycle of their fund. The December quarter will be very important for our enhanced product as we progress many deals that have been initiated on the back of targeted marketing activities.” Shares in icetana are flat at $0.045.
Commodities and the dollar
Gold is trading at US$1628.15 an ounce.
Iron ore is 1.1 per cent lower at US$93.75 a tonne.
Iron ore futures are pointing to a fall of 1.3 per cent.
One Australian dollar is buying 62.59 US cents.
