ASX News LIVE | ASX to Edge Higher for Sixth Day Running; Liontown Takeover Back in Trouble, Oil and BTC Tumble

The ASX 200 finished the day flat (+0.04) at 7,091. Breaking its five consecutive day of gains. The benchmark now sits down -1.41% for the month and 0.74% for the year.

The start of the weeks momentum was driven by softer rhetoric from the US Federal Reserve, where policymakers and leaders discussed in a recent meeting their thoughts on potential interest rate hikes.

In the latest minutes for the meeting policymakers, ‘noted that it was important to balance the risk of overtightening against the risk of insufficient tightening’. That slight change in tone was enough to motivate traders into the US sharemarket. The S&P 500 gained 0.43%, and the NASDAQ rallied 0.71%.

Now today’s softer trading in the ASX today reflect a ‘wait and see’ mentality to the US consumer price index data that is due tonight Australian time.

Any positive signs of inflation dropping will spur the market into another rally movement, however, similar data from intermediate costs from producer prices exceeded forecasts as energy costs flowed through to the market.

Thankfully Crude oil prices have fallen back to their pre-weekend positions, falling again today to finish around US$83 per barrel for WTI.

In ASX shares today the Healthcare sector (-4.52%) weighed heavily on the benchmark as CSL extended its fall from yesterday, dropping another -5.6%.

Liontown fell -1.2% as its buyout deal looked less likely, while Redbubble rocketed up nearly 24% after posting positive news in its 1Q24 results, showing the company returning to positive cash flows of $0.7m, up 16.9m from the prior period.

Global lithium and chemical giant Albermale [NYSE:ALB] has been granted a seven-day extension to its due diligence period. Albemarle has an uphill battle from here as it attempts to secure its lithium prize in WA explorer Liontown Resources [ASX:LTR].

Albemarle has seen its $6.6 billion takeover offer turn from a likelihood to a dream since the company first began pursuing Liontown for $4.3 billion last October.

Since the initial news, shareholders and investors have bought heavily into LTR, with the share price rising 83% in the past 12 months as the deal was progressively increased to match what board members described as a ‘fair valuation’.

However, shares are down 2.23% today as the deal now hangs on life-support as Gina Reinheart again increased her stake to now total 19.9% after spending $1.3 billion on Liontown shares as she moves to insert herself between the deal.

Any chance of the deal going forward will have to go through her as her major stake will control enough of the shareholder vote to become the queenmaker in Liontown’s future.

Online artist marketplace Redbubble [ASX:RBL] saw its shares jump by 21.74% today as the company brought out its 1Q24 results and celebrated its return to positive cashflow.

In the first quarter this financial year the company posted an underlying cash flow of $0.7 million, up $16.9 million on prior corresponding period.

The company now holds a cash balance of $39.9 million, up $4.2 million from 30th June 2023.

With strong early results the company reaffirmed its margin goals of between 23-26% and expenditure between $92-100 million.

Martin Hosking, Group CEO and Managing Director of the Redbubble Group, said:

‘The Group has had a good start to the financial year. Our ongoing focus on a narrow set of priorities continues to drive margin expansion and absolute GPAPA growth. These improvements, combined with our continued focus on cost discipline, has enabled the Group to achieve positive underlying cash flow this quarter, a particularly strong feat as the first quarter is a seasonally-low revenue period.’

 

Bitcoin [BTC] is down nearly 4% in the past three days after an optimistic spike as traders moved into perceived alternatives as Oil prices spiked.

The weekend attack on Israel by Hamas sent traders scrambling for their perceived safe havens, with gold, silver, oil, bonds and the greenback up.

Things have reverted back to the mean in many of these assets, with WTI oil now trading at pre-attack levels of US$83.06.

Bitcoin has failed to recover to its prices seen earlier in the year but has seen momentum build as the halving date looms mid-April 2024.

At this date, the reward for mining BTC will half from 6.25 BTC per block to 3.125 BTC.

For many, this big change will likely push prices nearer the end of the year.

The next big concern is pushing past the US$26,800 resistance.

Source: CoinDesk

‘This could be the final stage of the bear market for crypto,’ said Michaël van de Poppe, CEO of MN Trading.

‘We might be reversing here already in October, going into an uptrend in November (retesting the $26,800 area) or we might be reversing at the end of December for a pre-halving & ETF rally. Good times are ahead for Bitcoin.’

This looks like early optimism, but could be worth watching as we near the end of the year and towards the halving date.

Australia’s household disposable income has seen a slight improvement from its dire state but is still in the red for many households.

Latest data and surveys from businesses has seen growth of costs for businesses fall in recent months, but interest rates are still heavily impacting consumers and industry alike.

IMF data released this week showed that Australians are spending, on average, 15% of income on repaying loans, higher than any other advanced economy. This, combined with an anemic GDP growth of 1.2% (downgraded from 1.7%), means it could be a slow 2024 for Australia.

In more positive news, the IMF said the global economy has a better chance of dodging a hard landing, based on fresh forecasts, though advanced economies like Australia can still expect a stretch of subdued growth.

The fund said the likelihood of a soft landing, where inflation is wrangled under control without a major downturn in activity, has improved.

World economic growth is tipped to slow to 3% this year and 2.9% in 2024, which is a modest 0.1 percentage point downgrade from the agency’s July predictions.

…and another. Because household debt in Aust is much larger than household deposits the rise in interest payable (orange bars) by Aust households has been well above the rise in interest received (yellow bars). Hence higher interest rates are a net -ve for Aust households… pic.twitter.com/AAgUSYwBvX

— Shane Oliver (@ShaneOliverAMP) October 11, 2023

Air New Zealand [ASX:AIZ] shares are down by 2.22% after announcing profit guidance for the first half of FY24.

The company expects a profit range of $180-230 million for the first half of the financial year.

The company pointed to high volatility in fuel prices and softening demand as the main factors for a weaker-than-hoped profit guidance for 1H24.

The announcement outlined its issues today, saying:

‘…customer demand remains solid across most markets, but recent softness in domestic travel, particularly corporate and government travel, has continued. Jet fuel prices and the weaker New Zealand dollar have also had an adverse impact on costs for much of the first financial quarter. Having increased by 35% from July to September, over the past week the jet fuel price has come down almost 10%, highlighting the on-going volatility of this critical input cost.’

‘Lastly, while the previously disclosed Pratt & Whitney engine issues are expected to have a noticeable impact on parts of Air New Zealand’s flying schedule in the second half of FY24, the financial impact on the first half of FY24 is expected to remain nominal. The economic environment continues to be uncertain and future performance may be impacted by a number of factors. These factors include increased international competition, volatile fuel prices, currency fluctuations and ongoing inflationary pressures.’

Gambling company Tabcorp [ASX:TAH] saw its shares plunge over 10% in early trading, recovering slightly to being down over -6% in this mornings trading after releasing its 1Q24 update in which group revenue was down 6.1%.

The company lost ground in both in-person sites and online, with gaming services revenue down 12.7% and wagering and media revenue down 5.4%.

Tabcorp Managing Director & Chief Executive Officer, Adam Rytenskild said:

‘Given the softer trading environment, I’m pleased we grew digital wagering turnover, which highlights that customers are responding to our new digital customer offering. We continue to be relentless in the way we execute our TAB25 strategy and remain focused on making the right decisions for the long-term success of the business.’

PwC executives faced a parliamentary grilling this morning as key executives took to reading constrained statements that apologised for the Tax scandal.

Kevin Burrowes, PwC’s chief executive officer, said in his statement this morning that ‘what happened is totally unacceptable‘.

‘We cannot apologise strongly enough for breaching the trust placed in us, and we accept the justifiable questions this raised about our trustworthiness and integrity, just as we commit to do better in the future,’ he said.

As a response, Senator Pocock was unmoved by the statements of Mr Burrowes and People and Ethics leaders at the firm and instead went on the offensive, saying that PwC has lost its social licence to self-regulate:

‘You’re assuming that you continue to govern yourself far from the prying eyes of ASIC,’ Senator Pocock said.

‘You’ve got self-regulatory actions that you’re voluntary committing. You’re committing to three non-executive independent directors, planning to publish audit statements applying the ASIC corporate governance principles, which are statements of intention and hope,’ she said.

‘They’re motherhood statements about how good governance should look like.’

‘But isn’t it the case that as things stand, there are no regulatory consequences if you don’t do any of these things?’

‘They do not have teeth, and they do not constitute a significant shift in your regulatory framework.’

‘You are offering self-regulation, which we as a Senate and the Australian public no longer trust you to apply.’

‘You have lost social licence to self-regulate and the self-regulations you offer are completely inadequate to the challenges and the disaster that you present to the Australian people.’

 

Good morning all,

The ASX 200 opened up 0.19% to 7,101.8 as momentum was maintained on Wall St after speeches from Fed heads earlier in the week.

A dovish tone from Federal Reserve Vice Chairman Philip Jefferson and Bank of Dallas president Lorie Logan suggested that the recent surge in long-term Treasury yields was helping tighten financial conditions and may reduce the need for the US central bank to raise its benchmark interest rate again.

This was seen as a sign that the Fed may be slowing down its aggressive rate hike campaign.

US 10-year treasury bond yields are down again, falling -9bps to 4.56% after closing Friday at 4.783%. They now sit at a two-week low.

In Europe and elsewhere, bond yields fell 6-10bps as people sought the safety of bonds as concerns about the Middle East spread.

Australian 10-year fell -11bps to 4.34%. UK’s 10-year was down -10bpt to 4.32%.

Oil prices fell back to near pre-attack levels after spiking following the attack on Israel. Brent Crude is down -0.33% to US$85.54.

The Dow +0.19%, Nasdaq +0.71%, S&P 500 +0.43%.

Gold is up 0.83% overnight, bringing its gains for the past 3 days to 3%. It’s still down 2.78% for the past 30 days and down 7.85% in the past six months.

Iron Ore is down 0.66% as talks of China eyes stimulus yesterday came and went in the market.

Euro natural gas prices have eased nearly 7% overnight, after spiking nearly 30% in two days as the Israeli government instructed Chevron to shutter its Tamar gas field in northern Israel.

The weekend reported pipeline issues between Finland and Estonia that also pushed up supply are now being investigated as possible sabotage.

Officials had said a ship had passed over the pipeline, causing the damage potentially with an anchor. However, the latest seismic data from Norsar, the Norwegian seismological foundation, said it had detected a probable explosion. Finland is now investigating.

The Aussie dollar fell -0.2%, reaching US64.17 cents.