by Lauren Hayes
The market has bounced off morning lows, to trade flat after a negative lead from Wall Street overnight. At noon, the S&P/ASX 200 is 0.07 per cent or 4.70 points lower at 6,853.20.
The standout is Block (ASX:SQ2) after US-listed Block (NYSE:SQ) gained 12.6 per cent in post-trade Thursday, following the payment tech company’s Q3 earnings and revenue result, which exceeded Wall Street expectations. Shares are trading 11.10 per cent higher at $97.18.
In addition, the Reserve Bank of Australia has updated its forecast on core inflation, stating that it will peak at 6.5 per cent this year. The RBA’s prediction has increased by 0.5 per cent from the previous prediction made 3 months ago, due to higher energy prices and flooding to the east coast of Australia, which has put upward pressure on grocery prices.
The SPI futures are pointing to a fall of 0.22 points or 0.22 per cent.
Best and worst performers
The best-performing sector is Energy, up 1.60 per cent. The worst-performing sector is Health Care, down 1.10 per cent.
The best-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 11.10 per cent higher at $97.18. It is followed by shares in Coronado Global Resources (ASX:CRN) and Allkem (ASX:AKE).
The worst-performing stock in the S&P/ASX 200 is Ramelius Resources (ASX:RMS), trading 4.38 per cent lower at $0.77. It is followed by shares in HUB24 (ASX:HUB) and Magellan Financial Group (ASX:MFG).
Hawkish Fed
The hawkish Fed takeaways continued to reverberate overnight in the US, tightening global financial conditions. The FOMC statement flagged a near-term slowdown in pace of rate hikes, noting it will consider cumulative tightening of policy and the lags with which policy affects economic activity and inflation, and economic and financial developments. However, Powell adopted a markedly more hawkish tone at his press conference, hinting at a higher terminal rate than what was seen in the September dot plot and stressing that it is very premature to think about pausing. In addition, it is implied that the risk of not tightening enough is still higher than the risk of tightening too much. Also, he pointed to a tight labour market and a resilient consumer underpinned by strong household balance sheets. Late in the press conference, Powell indicated that the window for a soft landing has narrowed. With the terminal rate out to approximately 5.15 per cent on Thursday morning vs the approximately 4.65 per cent median projection in the September dot plot.
Busy day of data include ISM Services miss, initial jobless claims beat
The October ISM Services index dropped 2.3 points month-to-month, to 54.5, missing estimates for 55.4, which is the lowest since May 2020. The new orders index is down 4.1 points to 56.5, while the business activity index is down 3.4 points to 55.7. The prices index broke five-straight monthly declines, up 2 points to 70.7. The employment index also fell into contraction territory, down 3.9 points to 49.1. Supplier deliveries also slowed, up 2.3 points to 56.2. Commentary continued to highlight difficulties maintaining inventory. There were also no improvements in lead times or delivery times. Elsewhere, final October Services PMI marked up 1.1 points to 47.8, showing rate of charge inflation hit slowest levels since December 2020. Initial jobless claims for the week to 29 October of 217K beat consensus of 223K and continued to hold below 261K in the mid-July peak. The continuing claims in the week to 21 October of 1.485M higher than 1.450M estimates, the highest since 25 March. The first print of Q3 productivity of 0.3 per cent weaker than 0.4 per cent consensus (prior was 4.1 per cent contraction). However, unit labour costs for Q3 of 3.5 per cent is below consensus of 4.0 per cent (prior was 10.2 per cent).
Asian news
Asia-Pacific markets have opened lower on Friday. Japan’s Nikkei 225′s has fallen 2 per cent in early trade after a holiday on Thursday. The Topix has slid 1.38 per cent. In South Korea, the Kospi declined fractionally. The Kosdaq shed 0.36 per cent and MSCI’s broadest index of Asia-Pacific shares outside Japan is little unchanged.
Company news
Minerals 260 (ASX:MI6) announced that reconnaissance drilling completed earlier this year has confirmed the potential for its 100 per cent-owned Moora Project and adjacent Koojan JV to host significant PGE mineralisation. The company has confirmed significant bedrock palladium-platinum intersected for the first time at Moora ahead of a major new drilling program. In addition to following up the latest results, the next phase of drilling at Moora and Koojan will test a further 25 targets, including several high-priority PGE/copper targets defined by previous geochemical and geophysical surveys. Minerals 260 Managing Director David Richards said: “The intersection of highly anomalous PGE and copper values coincident with a large gravity high confirms this view and we look forward to following up these results as well as testing other priority targets as part of the upcoming drilling program.” Shares are trading 16 per cent higher at 36 cents.
Thor Mining (ASX:THR) today announced initial drill results from Kelly’s Ridge Prospect, Ragged Range, located in the Eastern Pilbara, Western Australia. The drilling results returned high-grade gold from the silicified altered contact along Kelly’s Ridge. In response, Nicole Galloway Warland, Managing Director of Thor Mining, commented: “This confirms the potential of the site as indicated by historical drilling. Furthermore, with more drilling results to come, we are looking forward to gaining further understanding of the project.” Shares are trading 25 per cent higher at 1 cent.
Cosmo Metals (ASX:CMO) this morning announced results from a seven-hole RC drilling program at the company’s Yamarna Copper-Nickel-Cobalt project east of Laverton in the Eastern Goldfields of Western Australia. The program was designed to extend and infill copper-rich sulphide mineralisation hosted within gabbroic rocks of the Mt Venn Igneous Complex. All holes drilled in the program intersected significant (>0.15 per cent) copper mineralisation at targeted depths, with mineralised intervals disseminated to massive and semi-massive sulphides. Cosmo’s Managing Director, James Merrillees, commented: “We’ve now encountered thick, shallow, and continuous copper mineralisation in the three programs drilled at Mt Venn in 2022 and the identification of the Minjina prospect supports our view of the region’s prospectivity.” Shares are trading 9.4 per cent higher at 18 cents.
Commodities and the dollar
Gold is trading at US$1631.73 an ounce.
Iron ore is 0.8 per cent higher at US$83.75 a tonne.
Iron ore futures are pointing to a rise of 1.34 per cent.
One Australian dollar is buying 62.95 US cents.
