The Match Out: Stocks down, ASX now ~8% below July highs

Another sell-off today with the ASX hitting the lowest close in 11-months, although the selling is fairly anaemic in nature and on very light holidays volumes, but still, the direction of least resistance has clearly been down since the ASX 200 peaked at the end of July at 7472, now down ~600pts/8% from that milestone, back at the very bottom of its 12-month trading range.

• The ASX 200 finished down -53pts/ -0.77% to 6890 with a lack of interest right across the market.
• The Utilities sector was best on ground (+0.34%) and the only sector to make gains, while Staples (-0.14%) and Healthcare (-0.20%) did better than the soft market.
• Financials (-1.54%), Communications (-1.10%) and Energy (-1.06%) the weakest links
• Bond yields continued to rise sharply overnight on stronger US data, the JOLTs Job Openings jumped to 9.61m up ~700k in the month and a reversal of the trend after 3 month’s of declines, keeping the door ajar for another rate hike, the market now pricing a 50/50 probability at the November meeting.
• We have US ISM Services PMI out tonight which is expected to contract to 53.6 from 54.5, though a higher than expected print wouldn’t surprise given the recent trend of data coming in hotter than tipped.
• Orora (ASX: ORA) +2.25% ticked another box in their acquisition of European high end bottle manufacturer Saverglass with the French works council signing off. They expect the deal to be completed this quarter – we like ORA but have remained patient while this deal plays out.
• TPG Telecom (ASX: TPG) -2.23% are still in discussions with Vocus (ASX: VOC) for the sale of TPG’s Enterprise, Government and Wholesale business and fixed infrastructure. The deal had expired, but both parties still appear keen to see something happen.
• Banks were hit today, ANZ the worst of them off -1.93%, CBA (ASX: CBA) -1.6%, NAB (ASX: NAB) -1.67% & WBC (ASX: WBC) 1.47% - we wrote a quick piece on the banks this morning (here) providing our take & current portfolio positioning in the sector.
• Qantas (ASX: QAN) -1.79% chalked up a new cycle low below $5 and is now down almost 30% from its recent high – not a pretty picture for QAN as Chairman Richard Goyder tracks around the country meeting investors.
• Mineral Resources (ASX: MIN) -1.28% down after finalising a $US1.1bn debt offer.
• Lithium stocks more generally were down but look like they’re finding a base, Pilbara (ASX: PLS) ~$4 is looking interesting to us, the same for IGO (ASX: IGO) ~$12.
• Takeover target Liontown Resources (ASX: LTR) +0.7% edged higher as Gina increased her stake +2% to 14.7%
• Cattle prices hit a new 9-year low as farmers continue to de-stock ahead of a likely dry spell, the Ag stocks remains a hard place to invest, Elders (ASX: ELD) -0.72% to $5.51, a new 4-year low today. We took a loss on ELD in August at $6.47, which feels better today!
• Not much happening on the Iron Ore market with China still closed for Golden Week, Fortescue (ASX: FMG) +0.24% was a rare winner.
• Gold has been on the nose thanks to $US strength, the Dollar Index staying supported above 107 with gold now at US$1818/oz.
• A few bargain hunters around in Gold stocks following their Canadian peers higher, Evolution (ASX: EVN) +1.6% & Northern Star (ASX: NST) +1.39%.
• Asian stocks were lower, Hong Kong off -1.38% & Japan fell -2.24%.
• US Futures are lower, down around -0.5%.

ASX 200 chart - intraday 

ASX 200 chart - weekly

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Broker moves 

• AMA Group Raised to Buy at Canaccord; PT 14 Australian cents
• Bank of Queensland Cut to Underweight at JPMorgan; PT A$5.30
• IPH Raised to Buy at Goldman; PT A$8.75

Major movers today 

Enjoy the night
The Market Matters Team

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