ASX News LIVE | ASX to Open Down as Iron Ore and Oil Prices Fall

Australia’s skilled migration list has come under scrutiny today as the first draft was seen by the public.

Jobs and Skills Australia released a draft list categorising occupations based on their likelihood of being eligible for skilled visas. The list has sparked a heated debate, particularly within the construction industry.

Occupations such as television journalists, dog handlers/trainers, yoga instructors, and Wushu martial arts teachers were considered ‘near certainties‘ in the draft list.

However, several essential trades, including plumbers, bricklayers, cabinetmakers, painters, roof tilers, and stonemasons, are still ‘targeted for consultation,’ despite electricians and carpenters/joiners being ‘confident on the list.’

This has drawn strong criticism from Denita Wawn, the chief executive of the construction lobby group Master Builders Australia, who commented today:

‘We need to ensure that we get our priorities right. We have to house all Australians,’ she stated to reporters in Canberra. ‘We cannot build homes with wellness instructors, we need tradies, and they must be on the definite list for skilled migration.’

In a blow to creditors, the once-prominent cleaning retailer Godfreys has failed to secure a buyer, leaving those owed money with little hope of recovery.

According to a report filed by PwC, creditors will not receive any of the $45 million owed to them.

Godfreys, which operated for over 90 years, succumbed to mounting pressures in late January, including fierce competition from larger rivals such as Harvey Norman and Amazon, as well as an aging and less popular product range.

Despite 26 groups expressing interest in acquiring the company and being granted access to a data room, none of the six nonbinding offers were considered suitable.

However, there may be a silver lining for former employees, who could potentially receive 73 cents on the dollar for their outstanding entitlements.

The collapse of Godfreys marks the end of an era for local retailers like them, who struggled to adapt to the changing online landscape of the retail industry and consumer shopping.

Oil and gas company Cooper Energy [ASX:COE] has reaffirmed its guidance for the 2024 fiscal year as it gears up for the next stage of its East Coast Supply Project in the Otway Basin.

Despite today’s announcement, the company’s shares fell by -5.44% to 21 cents per share today as the wider Energy sector fell along with oil prices.

The company’s FY24 guidance remained unchanged, with group production expected to be between 60.5 and 64.0 TJe/d, production expenses ranging from $57 million to $63 million, and capital expenditures projected to be between $240 million and $280 million.

Managing director and CEO Jane Norman voiced her opinions in the investor briefing on what she felt was ‘the crucial role‘ that gas will play in supporting renewable power generation as Australia progresses in its energy transition, saying:

‘With the decommissioning of the BMG wells now complete, we turn our attention to the next phase of brownfield growth in the Otway Basin, with the rig arriving in the region in the second half of 2025.

 

Cooper Energy’s East Coast Supply Project is potentially the largest gas supply opportunity in the Southeast market within the next few years, producing gas from low-risk, high-quality prospects that can be commercialised rapidly through our existing infrastructure.’

The ASX 200 is down by -0.22% at 7,744.0 around midday as falling commodity prices weigh on the market cap leaders.

Energy stocks (-1.48%) were the worst hit today as oil prices fell sharply overnight, and traders absorbed the bearish reality of Sunday’s limited OPEC+ production cuts.

In fact, production is expected to increase for some OPEC members as soon as October this year and was enough to see crude prices fall over 3% overnight.

Again today, crude is slipping a further 20 cents to US$78.16 a barrel, now to lows not seen since February this year.

Woodside Energy fell -1.77% to $27.43 per share, while Santos is down by -1.7% to $7.54 per share.

Australian and US bond yields fell overnight as traders pared back expectations for rate hikes.

The Australian 3-year bond yield dipped below 4% for the first time in a week, while the 10-year yield also eased for both the US and Australia.

The decline in US bond yields occurred after data revealed that factory activity in the US economy slowed for the second consecutive month in May. This has strengthened the case for potential interest rate cuts coming later this year.

Federal Reserve fund futures are now fully pricing in an interest rate reduction by November and indicate a total of 41 basis points of cuts in 2024, up from the 36 basis points projected on Monday.

In the Australian context, traders have adjusted their expectations of a rate hike by the RBA. The market now implies only an 8% probability of a tightening this year, a significant decrease from the 27% anticipated last week.

Traders are now fully pricing in a rate cut by July next year, a shift from the previously indicated timeline of December 2025.

Source: TradingView (AU 10Y in blue, US 10Y in Green)

Life360 [ASX:360], the company behind the widely popular family tracking app, has announced its initial public offering (IPO) in the United States. This move aims to raise capital to fuel the company’s growth and expansion.

Based in San Francisco, Life360 is offering 5.75 million shares in the IPO, with an additional over-allotment option of 862,500 shares, commonly known as a ‘greenshoe.’

Investment banking giants Goldman Sachs, Evercore, and UBS are joint bookrunners for the offering.

Last month, Life360 signalled its intention to list on the Nasdaq stock exchange, with a maximum potential raise of approximately $150 million AUD.

The Life360 app has gained widespread popularity among families seeking to stay connected and ensure the safety of their loved ones, especially teen drivers.

With the proceeds from the IPO, Life360 said it aims to ‘accelerate its product development efforts, expand its user base, and explore new avenues for growth.‘

Meme stock Gamestop [NYSE:GME] is once again spiking as a renewed frenzy around the stock emerges as prior figurehead reemerged online.

Meme stocks are shares that swing wildly in value based simply on their online popularity on social media rather than the company’s fundamentals.

Another good example is Donald Trump’s social media company, Truth Social, which holds a market cap of US$8.3 billion despite tiny and successively falling revenues.

The phenomena can be seen as a consequence of our social media age, as amateur traders convince each other to invest in single stocks as a collective action.

Below, you can see the post that spurred the recent focus back on Gamestop as Gill, known as DeepF——Value posted his US$115.7 million bet on GME.

Source: Reddit

Good morning. Charlie here,

The ASX 200 is set for a weaker start today, with ASX Futures pointing to the benchmark opening down after a mixed session on Wall Street.

Despite the weaker finish, US stocks still closed another winning month, with the S&P 500 finishing with its best May since 2003.

The Australian dollar hit a two-week high, while Treasury yields fell sharply overnight.

Oil has fallen in the aftermath of last Sunday’s bearish OPEC+ meeting. While the Cartel agreed to extend cuts through 2025, many of those were voluntary. Some OPEC members will begin ramping up production as soon as October this year.

Iron ore again fell due to concerns about China’s demand. Prices are now at their lowest in six weeks as China’s property crisis continues into its third year.

In May, the value of new-home sales from the 100 largest real estate companies dropped 34% from a year earlier.

While it was less than the 45% decline in April, it highlights the extent of the problem.

US economist Paul Krugman also gave traders bearish news yesterday saying, ‘China’s economic model is not sustainable,’ and noted that Chinese leaders are ‘bizarrely unwilling’ to use government spending to support consumer demand instead of production.

‘The fact that we seem to have a complete lack of realism on the part of the Chinese is a threat to all of us,’ he told Bloomberg yesterday.

Wall Street: S&P 500 +0.11%, Dow -0.30%, Nasdaq +0.56%.

Overseas: FTSE -0.15%, STOXX +0.40%, Nikkei +1.13%, SSE -0.27%.

The Aussie dollar rose +0.57% to US 66.92 cents.

US 10-year bond yields -11bps to 4.39%.

Australian 10-year bond -12bps to 4.29%.

Gold rose +1.06% to US$2,350.76, while Silver rose +1.12% to US$30.75.

Bitcoin rose +1.41% to US$68,804, while Ethereum fell -0.47% to US$3,763.

Oil Brent fell -3.65% to US$78.15, while WTI Crude fell -3.81% to US$74.05.

Iron ore fell sharply -4.2% to US$110.65 a tonne.