The Match Out: The commodities trade supports the ASX

• The ASX 200 finished up +19pts/ 0.28% to 7078
• The Materials sector bounced (+1.36%) while Energy (+0.36%) and Financials (0.23%) were solid.
• Utilities (-1.79%), Property (-0.66%) and Consumer Discretionary (-0.59%) the weakest links.
• The AUD traded higher today hitting 65.77c and is now up ~4% in the last month. Interest rate differentials drive currencies, and quite clearly, the US is now more likely to cut rates than our own central bank, albeit from a higher level, reducing that differential. This is supportive of the AUD.
• We’re also seeing a few more positive vibes from China which is helping the commodities trade, another supporting factor for the Aussie.
• The RBA minutes from the last policy meeting were out at 11.30am this morning, articulating the boards thoughts on their decision to raise rates to 4.35%. They outlined the decision as one centred on the risks arising from the outlook for inflation being stronger than it had been some months earlier.
• Fortescue (ASX: FMG) +0.67% confirmed plans to proceed with its first three projects under group’s plans to become a major force in hydrogen and renewable energy, signing off on $US750m in investments.
• Technology One (ASX: TNE) -2.07% had a volatile session, up initially but saw a big turnaround despite reporting a 16% uplift in after tax profits for FY23 to $129.9m, a shade below the $130.6m consensus.
• Star Entertainment (ASX: SGR) was flat after they signed an agreement on revised tax rates with the NSW government, from the start of FY25, poker machine duty rates will increase to 21.91+ GST from 20.91% + there is an additional levy if they generate gaming revenue of $1.1bn in a given financial year.
• Sandfire Resources (ASX: SFR) +5.01%, Paladin (ASX: PDN) +4.01%, Northern Star (ASX: NST) +3.49%, Evolution Mining (ASX: EVN) +2.42% and Mineral Resources (ASX: MIN) +2.93% were standouts in our portfolio today.
• We looked at a bond from Coles this morning, a nice defensive fixed rate exposure with the choice of 7 or 10 year duration yielding 6.1% (or 6.4% for the 10 years). We like these sorts of deals, locking in today’s rates.
• The Westpac Hybrid announced yesterday has seen strong demand, the book was over $2.5bn from what we understand, and it closed early (11am today) – the margin of 3.1% over was solid (and relatively attractive) equating to yield grossed for franking of 7.49%.
• The guys at Unified Capital (ex-Shaws) nabbed a good trade today, selling down $176m worth of stock on-market for the founders of healthcare imaging software business Pro Medicus (ASX: PME). They still own over ~$2bn worth of shares.
• Altium (ASX: ALU) +0.22% edged higher on a broker upgrade from Macquarie, they think it's worth $49.70, we own ALU in the Active Growth Portfolio.
• Iron ore futures on the Singapore exchange rallied +2% to $US133.75/MT for the December contract. The price still defying the bears, helped this time from extended strikes from BHP train drivers.
• Gold was strong, up US$19 to US$1992/oz at our close.
• Asian stocks were all up, Hong Kong +1.38%, Japan +0.24% and China +0.75%.
• US Futures marginally higher ahead of Thanksgiving on Thursday + half day Friday – a quiet end to the week expected.
• Deere & Co (NASDAQ: DE) held in the International Equities Portfolio reports tomorrow night.

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