ASX 200 sees more M&A, lithium rally extends, & Macquarie upgrades uranium forecast
The S&P/ASX 200 closed 16.3 points lower, down -0.22%.
Please note that Morning and Evening Wraps will take a break from Wednesday, 20 December and return on 8 January 2024. Kerry & Carl wish you a safe and happy Christmas and New Year!
Let's dive in.
Markets
ASX 200 Session Chart
The Consumer Discretionary (XDJ) +0.2% and the Health Care (XHJ) +0.2% were the best two performing sectors today, and the only two to finish in the black. Doing it tough today were the Real Estate Investment Trusts (XPJ) -1.4%, Consumer Staples (XSJ) -0.8%, Utilities (XUJ) -0.8% – a trio of defensive sectors.
Sure we were down today, but consider how far we've come since the October low. Just like I tell my 12-year old son who's an aspiring leg spinner, if you're going to miss, miss on the off side. Investors, if you're going to have a down day on the index, have one just like today – with hardly any commitment from the supply-side.
Chart of the day: Uranium
My chart of the day today has to be the Uranium futures chart. Talk about a stairway to heaven! Friday's trade saw it push US$86.75/lb on the COMEX futures exchange. To put this into perspective, at the start of this year uranium was trading around US$48/lb, and at current levels, it's trading at 15-year highs.
Of the others, of only Paladin (ASX: PDN) is probably close enough to follow suit any time soon. So, in the mean time most companies are burning cash in exploration and development. Still, for most, the current price in the mid-to-high 80's is starting to be a very sweet spot indeed.
From a technical perspective, the Boss Energy chart is possibly the pick of the bunch. Over the past four trading sessions, the long term uptrend ribbon appears to be doing what it does best – indicating where short term excess supply tends to give way to longer term excess demand. Today's full white candle is a nice punctuation point on the return of this excess demand.
Company | Last Price | Change $ | Change % |
Aura Energy (AEE) | $0.27 | 0.020 | 8.2% |
Boss Energy (BOE) | $4.17 | 0.150 | 3.7% |
Deep Yellow (DYL) | $1.01 | 0.025 | 2.5% |
Berkeley Energia (BKY) | $0.35 | 0.005 | 1.4% |
Elevate Uranium (EL8) | $0.45 | 0.005 | 1.1% |
Paladin Energy (PDN) | $0.99 | 0.005 | 0.5% |
Bannerman Energy (BMN) | $2.68 | -0.020 | -0.7% |
Nexgen Energy (Canada) (NXG) | $10.40 | 0.104 | -8.0% |
Lithium Sector rally into second week, but becoming "sporadic"
Company | Last Price | Change $ | Change % |
Core Lithium (CXO) | $0.325 | +$0.02 | +6.6% |
Latin Resources (LRS) | $0.235 | +$0.005 | +2.2% |
Allkem (AKE) | $10.65 | +$0.18 | +1.7% |
Pilbara Minerals (PLS) | $3.97 | +$0.05 | +1.3% |
Vulcan Energy Resources (VUL) | $2.56 | +$0.03 | +1.2% |
Liontown Resources (LTR) | $1.465 | +$0.015 | +1.0% |
Mineral Resources (MIN) | $67.42 | +$0.64 | +1.0% |
Lithium Power International (LPI) | $0.545 | +$0.005 | +0.9% |
Develop Global (DVP) | $2.89 | +$0.02 | +0.7% |
IGO (IGO) | $8.87 | -$0.01 | -0.1% |
Piedmont Lithium Inc (PLL) | $0.445 | -$0.01 | -2.2% |
Global Lithium Resources (GL1) | $1.255 | -$0.065 | -4.9% |
Delta Lithium (DLI) | $0.475 | -$0.025 | -5.0% |
Economy
What to watch out for...
With this in mind, watch out tonight for the NAHB Housing Market Index for December which indicates the relative level of current and future single-family home sales. The data is compiled from a survey of around 900 home builders – so it's comprehensive.
A reading above 50 in the index indicates a favorable outlook on home sales versus below indicates a negative outlook. Economists are forecasting the index to be 36 versus November's 34 – so a slight improvement – but as you can see from the above chart, the US housing market has been on a steady decline since the Fed's interest rate lift off in early 2022, and is presently mired in contraction.
Latest News
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- Who has been buying what (both here and in the US)?
- The dogs and darlings of the ASX in 2023 (and what to back in 2024)
- Morning Wrap: ASX 200 to fall, S&P 500 logs seventh straight week of gains
Interesting Movers
Trading higher
- +31.3% Adbri (ABC) - Scheme of arrangement acquisition proposal from CRH & Barro
- +29.5% Neuren Pharmaceuticals (NEU) - P2 trial shows significant improvements in Phelan-McDermid
- +27.1% Link Administration Holdings (LNK) - Link Group enters into Scheme Implementation Deed
- +23.1% Tabcorp Holdings (TAH) - New Exclusive Victorian Wagering and Betting Licence
- +10.9% Immutep (IMM) - No news, technical breakout
- +6.6% Talga Group (TLG) - No news, bounce within major long term downtrend
- +6.6% Core Lithium (CXO) - Ongoing lithium sector rally
- +6.2% Judo Capital Holdings (JDO) - Positive broker commentary
- +5.7% Bell Financial Group (BFG) - No news, technical breakout
- +5.4% MMA Offshore (MRM) - No news, monster long term uptrend, technical breakout
Trading lower
- -5.4% GDI Property Group (GDI) - Dividend/Distribution - GDI
- -5.3% Catapult Group International (CAT) - No news
- -5.0% Delta Lithium (DLI) - No news, pullback after recent lithium sector rally
- -4.9% Global Lithium Resources (GL1) - No news, pullback after recent lithium sector rally
- -4.7% Garda Property Group (GDG) - No news
- -4.5% Omni Bridgeway US Prohibited (OBL) - Move is consistent with long term downtrend
- -4.5% Audinate Group (AD8) - No news
- -4.2% Pexa Group (PXA) - No news
- -4.2% Adriatic Metals (ADT) - No news
- -4.1% EML Payments (EML) - Move is consistent with long term downtrend
- -3.8% Austal (ASB) - Move is consistent with long term downtrend
Broker Notes
- Alpha HPA (A4N) retained at buy Bell Potter; Price Target: $1.68
-
Adbri (ABC)
- Retained at equalweight Morgan Stanley; Price Target: $2.30
- Retained at underperforrm Macquarie; Price Target: $2.20
- Retained at hold Ord Minnett; Price Target: $2.00
- Australian Finance Group (AFG) retained at hold Citi; Price Target: $1.55 from $1.70
- Alligator Energy (AGE) retained at buy Bell Potter; Price Target: $0.10
- Allkem (AKE) retained at buy Bell Potter; Price Target: $18.45
- Arafura Rare Earths (ARU) retained at buy Bell Potter; Price Target: $0.44
- Azure Minerals (AZS) retained at buy Bell Potter; Price Target: $4.90
- Bega Cheese (BGA) retained at buy Bell Potter; Price Target: $4.10 from $3.35
- Brickworks (BKW) retained at neutral Macquarie; Price Target: $24.75
- Boral (BLD) retained at outperform Macquarie; Price Target: $5.60
- Boss Energy (BOE) retained at outperform Macquarie; Price Target: $5.00 from $4.50
- Beach Energy (BPT) retained at buy Bell Potter; Price Target: $2.00
- Bluescope Steel (BSL) downgraded to neutral from buy at Citi; Price Target: $22.50 from $21.40
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Catapult Group International (CAT)
- Downgraded to hold from buy at Bell Potter; Price Target: $1.43
- Retained at hold Bell Potter; Price Target: $1.43
- Centuria Industrial Reit (CIP) retained at hold Bell Potter; Price Target: $3.20
- Capricorn Metals (CMM) retained at buy Bell Potter; Price Target: $5.70 from $5.50
- Centuria Capital Group (CNI) retained at buy Bell Potter; Price Target: $1.55
- Cooper Energy (COE) retained at buy Bell Potter; Price Target: $0.17
- Centuria Office Reit (COF) retained at hold Bell Potter; Price Target: $1.25
- Comet Ridge (COI) retained at buy Bell Potter; Price Target: $0.26
- Conrad Asia Energy (CRD) retained at buy Bell Potter; Price Target: $2.30
- CSR (CSR) retained at neutral Macquarie; Price Target: $5.50
- Delta Lithium (DLI) retained at buy Bell Potter; Price Target: $1.35
- Dreadnought Resources (DRE) retained at buy Bell Potter; Price Target: $0.15
- Develop Global (DVP) retained at buy Bell Potter; Price Target: $4.30
- Dexus Convenience Retail Reit (DXC) retained at buy Bell Potter; Price Target: $2.85
- Dexus Industria Reit (DXI) retained at sell Bell Potter; Price Target: $2.65
- Deep Yellow (DYL) retained at buy Bell Potter; Price Target: $1.84
- GDI Property Group (GDI) retained at buy Bell Potter; Price Target: $0.75
- Green Technology Metals (GT1) retained at buy Bell Potter; Price Target: $0.72
- GWA Group (GWA) retained at outperform Macquarie; Price Target: $2.20
- Healthco Healthcare and Wellness Reit (HCW) retained at buy Bell Potter; Price Target: $1.75
- Homeco Daily Needs Reit (HDN) retained at hold Bell Potter; Price Target: $1.25
- Hartshead Resources (HHR) retained at buy Bell Potter; Price Target: $0.07
- HMC Capital (HMC) retained at buy Bell Potter; Price Target: $5.55
- Insurance Australia Group (IAG) retained at equalweight Morgan Stanley; Price Target: $5.45
- IGO (IGO) retained at buy Bell Potter; Price Target: $11.30
- Imdex (IMD) upgraded to buy from neutral at Citi; Price Target: $2.20 from $1.60
- James Hardie Industries (JHX) retained at outperform Macquarie; Price Target: $58.40
- Liberty Financial Group (LFG) retained at hold Citi; Price Target: $4.40
- Latitude Group Holdings (LFS) retained at underperforrm Morgan Stanley; Price Target: $0.99 from $1.06
- Lake Resources (LKE) retained at buy Bell Potter; Price Target: $0.36
- Link Administration Holdings (LNK) upgraded to neutral from underweight at Barrenjoey; Price Target: $2.26 from $1.70
- Latin Resources (LRS) retained at buy Bell Potter; Price Target: $0.46
- Liontown Resources (LTR) retained at buy Bell Potter; Price Target: $2.75
- Meteoric Resources (MEI) retained at buy Bell Potter; Price Target: $0.40 from $0.40
- Mineral Resources (MIN) retained at buy Bell Potter; Price Target: $90.00
- Monash IVF Group (MVF) retained at outperform Macquarie; Price Target: $1.50
- Nickel Industries (NIC) retained at buy Bell Potter; Price Target: $1.80
- Orora (ORA) retained at overweight Morgan Stanley; Price Target: $3.30 from $3.50
- Paladin Energy (PDN) retained at outperform Macquarie; Price Target: $1.40 from $1.30
- Pilbara Minerals (PLS) retained at hold Bell Potter; Price Target: $3.90
- Pepper Money (PPM) upgraded to buy from neutral at Citi; Price Target: $1.40 from $1.45
- Reece (REH) retained at underperforrm Macquarie; Price Target: $15.40
- Resimac Group (RMC) retained at hold Citi; Price Target: $0.95 from $1.10
- Reliance Worldwide Corporation (RWC) retained at outperform Macquarie; Price Target: $4.05
- Select Harvests (SHV) upgraded to underperform from sell at CLSA; Price Target: $3.25 from $3.60
- Strike Energy (STX) retained at hold Ord Minnett; Price Target: $0.50
- Suncorp Group (SUN) retained at overweight Morgan Stanley; Price Target: $15.70
- Talga Group (TLG) retained at buy Bell Potter; Price Target: $2.50
Scans
This content originally appeared on Market Index.
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6 stocks mentioned