The ASX has climbed again today at opening, following Wall Street’s rally overnight.
The S&P/ASX 200 was 0.7% higher to 7,239.7 at 10.11am AEDT, with the Commonwealth Bank rallying on a profit jump and plans to return $2 billion to shareholders.
In the US, the Dow industrials enjoyed its best session in over a week. The S&P 500 index was up 0.8% and The Nasdaq Composite Index closed up 1.3%.
Materials 1.67% higher, financials 1.38% higher and consumer discretionary 1.50% higher were the top sector performers.
As for particular companies, Peloton Interactive (NASDAQ:PTON) Inc. gained 25.28% after co-founder John FGoley announced he would step down as CEO and the company said it would implement cost-cutting measures causing the loss of approximately 2800 jobs.
Meanwhile Pfizer Inc (NYSE:PFE) was down 3.6% after it topped Wall Street profit forecasts but missed on revenues.
Here’s what we saw (source Commsec):
- The Aussie dollar rose from near US71.05 cents to US71.45 cents and was near highs in afternoon US trade.
- Global oil prices eased by around 2%, with investors focused on the resumption of talks between the US and Iran that could revive an international nuclear agreement. On this, Refinitiv noted "A deal could return more than 1 million barrels per day of Iranian oil to the market, boosting global supply by more than 1%."
- The Brent crude price fell by US$1.91 or 2.1% to US$90.78 a barrel.
- The US Nymex crude price fell by US$1.96 or 2.1% to US$89.36 a barrel.
- Base metal prices were mixed on Tuesday. Aluminium, copper and lead rose by as much as 1.3%. Other metals fell by as much as 3.3%, led by nickel.
- The gold futures price rose by US$6.10 or 0.3% to US$1,827.90 an ounce.
- Spot gold was trading near US$1,827 an ounce in late US trade.
- Iron ore rose by US55c or 0.4% to US$149.95 a tonne.
Australian market
Nickel Mines Ltd is in a trading halt ahead of a capital raise, meanwhile Syrah Resources Ltd (ASX:SYR) has completed its placement and institutional entitlement offer, with the placement raising approximately $125 million and the institutional entitlement offer around $67 million.
On the earnings front
Mineral Resources Limited struggled in the half-year ending December 31 due to the collapse in iron ore prices and widening discounts.
The company reported EBITDA of $156 million for the period, down 80% on the prior corresponding period.
Underlying net loss after tax was $36 million, down 108%, while statutory net profit after tax was $20 million – 96% lower than the corresponding period.
No interim dividend was declared.
“It hasn’t been easy and the challenges during 1H22 were amplified by the collapse in iron ore prices. This has delivered our worst first half financial result in three years,” managing director Chris Ellison said.
“These results do not reflect the substantial progress in our iron ore, lithium and gas businesses during the last six months which will create significant value for decades to come and which underpins our long-term growth for our mining services division.”
Mineral Resources believes it remains on track to meet FY22 volume guidance of a 15% to 20% increase for mining services, spodumene export guidance of 450-475,000 tonnes a year, and the revised full-year iron ore export guidance of 18.5-19.5 million tonnes a year.
The company has also just signed a non-binding expansion agreement with Albermarle.
“We are delighted to have reached this non-binding agreement, which represents a practical solution to support the growth of our partnership with Albemarle,” Mineral Resources managing director Chris Ellison said.
“Mineral Resources’ core competency is to design, build and operate the Wodgina site. Albemarle has a strong track record in the development and operation of downstream lithium conversion, and has an industry-leading sales and marketing capability.”
Bapcor Ltd has reported a solid first half of FY22, with revenue rising 1.9% to $900.1 million and net profit sliding 14.7% to $57.7 million. EBITDA dropped 8.5% to $133 million.
“The team delivered an increase in revenue of 1.9% and proforma NPAT of $61 million, a testament to the resilience of the business. Compared to FY20, a year that had the benefit of stimulus induced demand, the current half-year delivered a 28% increase in revenue and 33% increase in pro forma NPAT,” Bapcor chief executive Noel Meehan said.
“During the half, we expanded our geographic footprint, opening eight retail stores, four Burson stores and six specialist wholesale sites resulting in Bapcor now having a presence in over 1,100 locations throughout Australia, New Zealand and Thailand.”
A fully franked interim dividend of 10 cents a share, up 11.1% from a year prior was a highlight.
Temple & Webster Group Ltd has also delivered a solid report, with record revenue of $235.4 million for the half-year ending December 31, up 46% on the year before and EBITDA climbing 5.1%. Active customers grew 34% to a total of 906,000. Revenue for every active customer rose 10%.
“Despite all the challenges that COVID-19 continues to throw at the world, including significant disruptions to global supply chains and domestic logistics, Temple & Webster continues to outgrow the market, while keeping our customers very happy,” chief executive Mark Coulter said.
US market
US consumer prices data is due to be released on Thursday, highlighting a four-decade high of 7.3%.
It follows strong US labor data released last week that put investors on edge over a quicker move to raise interest rates than expected.
“We’ve got a rising interest rate environment which we haven’t seen since 2018 and there are a lot of investors in high-growth names that continue to see weakness,” Bright Trading LLC trader Dennis Dick said.
“You’re going to see money rotate to lower multiple names and more value-oriented market.”
Stolen Bitcoin recovered
US authorities have recovered more than 94,000 bitcoin stolen in 2016.
The value of the currency is $US3.6 billion and marks a record seizure.
Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, are accused of seeking to launder the bitcoin and face up to 20 years in prison.
Lichtenstein and Morgan allegedly sought to launder the proceeds of 119,754 bitcoin — then valued at $US65 million.
"Today’s arrests, and the US Justice Department's largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals," deputy attorney general Lisa Monaco says in a statement.
Would you like flies with that …?
We all know pets will pretty much eat anything, but a Paris-based biotech company known as InnovaFeed is investing in a future where flies could be a staple of pet food.
The company is partnering with Archer-Daniels-Midland Co to bring insect protein to pet food and has announced a partnership with ADM’s pet food division to expand the sustainable pet food industry. The move marks InnovaFeed’s expansion into the US market.
US regulation now allows the inclusion of black soldier fly in dog food, but it apparently also works for fish.
InnovaFeed says its proprietary technology brings the black soldier fly, or Hermetia Illucens, “back to its rightful place at the heart of the food chain”.
“Pet solutions is a strategic growth opportunity for ADM, with $100 billion in demand growing 4.5% a year,” president of ADM pet solutions Jorge Martinez said in a statement announcing the InnovaFeed partnership.
“Pet owners increasingly are demanding the same kind of sustainable, healthy products they eat themselves.”
Data supplied by InnovaFeed predicts the global insect protein market across plants, animals and humans is expected to grow to $113 billion in the next few years.
European markets
There were mixed results in Europe overnight.
London stocks closed lower.
An early bounce BP faded with sliding oil prices and online supermarket Ocado tumbled following bleak earnings forecast. Shares in BP fell 2.4% despite reporting its biggest profit in eight years.
“An early bump to its share price couldn’t be sustained, in part because the price of a barrel of Brent Crude slipped back a touch,” financial analyst at AJ Bell Danni Hewson said.
Shell dropped 3.2%, tracking weakness in oil prices.
Lower oil prices weighed on the oil & gas sector, which was down 1.8%. However, resumption of US-Iran talks and the possible revival of an international nuclear agreement would allow more oil exports from the OPEC producer, which would have a positive effect.
Higher bond yields weighed down technology stocks by 0.9%. But the mining sector rose 2.2%.
The pan-European STOXX 600 index was flat. The German Dax index rose by 0.2% but the UK FTSE index fell by 0.1%.
In London trade, shares in Rio Tinto rose by 1.8% while BHP fell by 0.2%.
After gaining as much as 0.7% earlier in the session, the UK’s blue-chip FTSE 100 slipped 0.1%, and midcap stocks ended 0.1% lower.