The Match Out: ASX flat ahead of US inflation, CSL knocked again

The daily Match Out for Thursday 12 October 2023 with James Gerrish of Market Matters
James Gerrish

Market Matters

A quiet but (marginally) positive session played out in Oz today with the banks and miners supporting the broader index, while the Healthcare sector continues to struggle, news overnight knocking the sector again today. US CPI Inflation due for release tonight will be telling and could dictate market trends from here, just as bond yields are starting to cool.

  • The ASX 200 finished up +2pts/+0.04% at 7091.
  • The Financials and Real Estate sectors shared the chocolates for best on ground (+0.86%) while Materials (+0.68%) & Tech (+0.58%) were close behind
  • Healthcare (-4.52%) was by far the market laggard today, joined by Energy (-0.55%) and Staples (-0.24%) 
  • Monthly inflation expectations came in at 4.8% YoY, up from 4.6% but not surprising, the quarterly print is a lot more telling.
  • Interesting move from Steve Johnson over at Forager (ASX: FOR) +9.02%, writing to investors flagging an intention to revert back to an open-ended structure versus a Listed Investment Trust (LIT) which is closed-ended in an effort to bridge the persistent discount it trades at (~15%) relative to its Net Asset Value (NAV). This is rife in LICs and LITs and kudos to Steve for doing something about it – more managers should be doing this but alas, when you have locked in capital earning fees, many managers will find it hard to part with that, even though they should. Performance is another issue but at least this is a proactive move to the benefit of investors.
  • Tabcorp (ASX: TAH) -6.15% was hit after saying revenue dropped ~6% in 1QFY24 due to the sale of eBet and lower contracted electronic gambling machines.
  • Redbubble (ASX: RBL) +30.43% ripped after their quarterly showed positive underlying cash flow – self-funding a business, what a novel idea!
  • CSL (ASX: CSL) -6.3% was sold down after Novo Nordisk (NYSE: NVO) announced encouraging efficacy results on the use of GLP-1’s on kidney disease, which could be a potential negative for CSL’s Vifor business.
  • Bluescope (ASX: BSL) -1.95% fell on a downgrade from Morgan Stanley
  • Lithium stocks had another good day, rising from their hiatus, Pilbara (ASX: PLS) +4.21%, IGO ltd (ASX: IGO) +0.79% and at the smaller end of town, Global Lithium (ASX: GL1) +6.67%
  • Iron Ore was up smalls in Asia, sitting at $US112.75
  • Gold edged higher trading at US$1878 at our close.
  • Asian stocks fared far better than our market. Hang Seng (+2%) the star, Nikkei (+1.69%) and China (+0.78%) also doing well at our close though
  • US Futures are up around +0.25%
  • CPI inflation data out tonight in the US, with core SPI for Sep expected to be 0.3% taking the YoY run rate to 3.6%.

ASX 200 chart - intraday 

ASX 200 chart - daily 

CSL Ltd (CSL) $238.24

CSL -6.3%: the GLP-1 troubles that have plagued ResMed (RMD) over the last month have also put pressure on the biopharma company, sending the stock to 4-year lows today. Novo Nordisk is currently trialling their GLP-1 drug on chronic kidney disease (CKD) and Type 2 Diabetes (T2D) with a 5-year study expected to be completed late next year. The trial has been halted early given the outstanding results already meeting efficacy outcome requirements, with the data now expected to be published a year early. Around 8% of CSL’s earnings may be impacted by the study, stemming from the Vifor business’s nephrology and dialysis (kidney disease treatment).

  • More pain in the healthcare sector as a result of GLP-1, we do not plan on increasing exposure here

Broker moves

  • Insurance Australia Raised to Add at Morgans Financial Limited
  • Motio Ltd Rated New Buy at Veritas Securities
  • Bluescope Cut to Underweight at Morgan Stanley; PT A$18
  • Bank of Queensland Cut to Neutral at Jarden Securities
  • Webjet Raised to Buy at Goldman; PT A$8.30
  • Breville Raised to Buy at Goldman; PT A$24.50
  • Scentre Group Rated New Outperform at Daiwa; PT A$2.77
  • Seek Raised to Overweight at JPMorgan; PT A$27
  • Perenti Reinstated Buy at Moelis & Company; PT A$1.35

Major movers today 

Enjoy the night
The Market Matters Team


Make informed investment decisions

At Market Matters, we write a straight-talking, concise, twice daily note about our experiences, the stocks we like, the stocks we don’t, the themes that you should be across and the risks as we see them. Click here for your free trial.

The Match Out will be available each day after the market close. Follow my profile to be notified when the latest report is live

........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.

1 topic

9 stocks mentioned

1 fund mentioned

James Gerrish
Portfolio Manager
Market Matters

James is the Lead Portfolio Manager & primary author at Market Matters, a digital advice & investment platform with over 2500 members that offers real market intel & portfolios open for investment. He is also a Senior Portfolio Manager at Shaw and...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment
Elf Footer