The Match Out: Shares struggle into the weekend, staples standout on tough day

Another soft session to end a very poor week for the ASX with the index down by -457pts/-6.6% over the four trading sessions. 

While the US market was soft overnight, down between 2.5% (Dow Jones) & 4% (NASDAQ), futures rallied during our time zone today to be trading 1% higher around our close, implying a positive start (at least) there tonight. That saw our market close ~50pts from the session lows today, although it simply seemed a lack of interest following a pretty torrid week. 

Manly beating the Cowboys at Brooky tonight would help a little!  

• The S&P/ASX 200 declined -116points / -1.73% to close at 6474.
• Staples were the only sector in the green today, closing +0.57%
• Materials (-2.78%) and Tech (-2.42%) underperformed.
• Japan retained monetary easing and yield curve control, defying pressure to track a global trend toward tighter settings.
• Banks ended a tough week lower – 3 of the big 4 trading at 52-week lows, namely CBA, Westpac (WBC), and National Australia Bank (NAB)
• Iron Ore stocks hit today as China continues to jawbone prices lower – Fortescue (FMG) down -4.69%, BHP lost 4%.
• Gold stocks were the standout today with the likes of Newcrest (NCM) +3.72% while the edgier end of the sector was better, Regis Resources (RRL) that we covered during the week sighting deep value was up +3.31%. Evolution was the outperformer adding 5.43%
• GUD -19.81% hit following an earnings downgrade – the drop was more than the downgrade which is typical when sentiment is weak.
• The same played out in Smart Group (SIQ) which fell another 5.36% today after losing 10% yesterday.
• Shane Oliver showed conviction today saying a recession is a 50/50 chance – nothing like sitting squarely on the fence.
• Twiggy Forrest had a better response, saying there is not a ‘snowflakes chance in hell’ of a global recession this year. That said, Twiggy was a Stockbroker turned miner, so a more optimistic person you’re unlikely to meet!
• Link (LNK) +1.49% has reaffirmed FY22 guidance it provided in February, expecting EBIT to be at least 5% higher than FY21.
• Iron ore futures were down more than ~5% today.
• Gold was down ~US$10 in Asia after rallying overnight – it settled US$1845/oz at our close.
• Asian markets were mostly up, the Nikkei in Japan the exception down 2%, Hong Kong stocks +1% while China was up 1%
• US Futures are higher by +0.4% each

ASX 200

GUD Holdings (GUD) $7.73

GUD -19.56%: the auto parts business downgraded guidance in an announcement aftermarket yesterday, sending shares to a 2 year low today. Earnings is expected to come in around $147m at the FY22 result, a 6% downgrade from the $155-160m guidance reconfirmed around 2 months ago. 

They blamed supply chain issues and a slow new car market, also impacted by supply. Costs have also been on the rise as inflation permeates the economy, though they have been passing on price hikes themselves to sustain margins. The legacy aftermarket parts business has been holding up though and they have benefitted from the higher inventory levels they held heading into the last quarter.

Stocks This Week

Sectors This Week

Broker Moves

• GUD Holdings Cut to Neutral at Citi; PT A$9.95
• SmartGroup Cut to Neutral at Credit Suisse; PT A$7.05
• Genworth Australia Cut to Underperform at Macquarie; PT A$1.95
• Link Administration Raised to Add at Morgans Financial Limited

Major Movers Today