ASX News LIVE | XJO looks to rise, US Stocks continue down, US Tech downgrade and selloff

ASX 200 Close today

That’s all from me today. Have a great evening!

The best individual performers:

• Scentre Group [ASX:SCG], up 3.98%
• Ingenia Communities Group[ASX:INA], up 3.13%
• Fortescue Metals [ASX:FMG], up 2.86%
• Dexus [ASX:DXS], up 2.76%
• GPT Group [ASX:GPT], up 2.89%

The worst performers:

• Medibank Private [ASX:MPL], down 3.91%
• Capricorn Metals [ASX:CMM], down 2.82%
• New Hope Corporation [ASX:NHC], down 2.66%
• TPG Telcom[ASX:TPG], down 2.58%
• Metcash Ltd [ASX:MTS], down 2.39%

Here’s a great visualisation of the growth in market cap of just 7 of the S & P 500 this year.

We can see surge in the top 7 #Stocks compared to the rest of the S&P 500, as the #AI trend began to gain momentum this year.#Stock #Market #USD #Dollar #Bank #OpenAI #US #ArtificialIntelligence #Twitter #News #Bitcoin #BTC pic.twitter.com/Y25vN4YxyH

— YusufHaji (@YusufHaji87) June 18, 2023

Here’s a great visualisation of the growth in market cap of just 7 of the S & P 500 this year.

We can see surge in the top 7 #Stocks compared to the rest of the S&P 500, as the #AI trend began to gain momentum this year.#Stock #Market #USD #Dollar #Bank #OpenAI #US #ArtificialIntelligence #Twitter #News #Bitcoin #BTC pic.twitter.com/Y25vN4YxyH

— YusufHaji (@YusufHaji87) June 18, 2023

On the 21st of June this year, the Politburo of the CCP announced a new package of tax breaks and consumer subsidies for electric vehicles (EVs) and other green cars.

The tax package is expected to restart the growth in China’s EV market, which has seen explosive growth in the past decade on the back of previous subsidies that saw the creation of hundreds of car manufacturers.

By 2019 there were approximately 500 registered EV makers. Now, we are down to about 100.

According to Wang Hanyang, an auto analyst at Shanghai-based 86Research Ltd, ‘80% of the new energy vehicle startups, if we count all of them since the initial subsidies, have exited or are exiting the market.’

As the hunger games of surviving car manufacturers continue, we are starting to see a similar structure to the US market— one that is dominated by a handful of big manufacturers.

It’s become increasingly challenging to compete in the market as the big players continue to prevail and take the lion’s share of sales.

In fact, the top four firms now hold 60% of the market share by unit sales, which is a significant increase from just three years ago when they held only 40%.

Source: Bloomberg

In 2022 EV sales in China reached 3.52 million cars, accounting for 15% of the global market so there is no doubt China will be a big player in the international adoption and production of EVs.

Which companies survive the games, will be one to watch.

BHP Chief Executive Mike Henry says the company will not be investing any further growth dollars in Queensland after the state’s abrupt increase in coal royalties.

In a speech today at the World Mining Congress in Brisbane, he railed against the rise, saying Queensland’s approach was, ‘unpredictable and unreasonable‘.

‘There was no engagement of industry… the near tripling of top-end royalties makes Queensland the highest taxing regime in the world.’

‘Both outcome and process have meant for BHP that we have opportunities to invest for better returns and lower risk elsewhere in the world.’

Queensland Premier Annastacia Palaszczuk announced the state’s critical minerals strategy today — which included the royalty hikes, as well as:

• $55 million towards free rent for new and existing permits for the next five years
• $75 million to support critical minerals projects
• $13 million for research
• $5 million further towards reducing waste through better extraction

When asked about the comments she dismissed the threats made by BHP and assured reporters that, ‘We have a lot more other investors in Queensland‘.

Several major US tech stocks experienced a significant decline in value due to a widespread sell-off. Companies such as Nvidia, Alphabet, and Meta Platforms saw losses of over 3%.

Tesla experienced a 6% drop in their stocks due to a downgrade by Goldman Sachs. The downgrade was attributed to a ‘challenging pricing atmosphere‘ and heightened competition from Chinese competitors.

Meanwhile, Barclays Strategists say AI pullback presents buying opportunity as valuations ‘aren’t overly expensive,‘ the team continued:

‘We think any retracement would present a tactical opportunity rather than a structural collapse of the trade because multiples have not risen to historical extremes‘

For those with a stomach for risk, this could be seen as a chance to get into the hottest stocks — for older market veterans; this is the writing on the wall.

Tech Tests Buyers’ Resolve https://t.co/MXgE7ycUbt pic.twitter.com/Mwwx78Fj24

— Stocktwits (@Stocktwits) June 26, 2023

It’s been a wild ride for Forrestania Resources [ASX:FRS] today as shares rose %163 by midday.

The junior mining company announced this morning that it had intersected 63m pegmatite in 13 of its 14 holes at the Calypso Prospect in WA.

Upon market opening, shares of the company went from 7.5 cents to 20 cents per share.

Since around midday, the company has requested a pause in trading as it adds additional information to today’s release.

The company’s request to pause was, ‘pending a supplementary table to be included for the purposes of visual estimation‘.

Who knows where the price will go from here but strap in.

The best individual performers:

• Scentre Group [ASX:SCG], up 3.59%
• Region Group[ASX:RGN], up 3.13%
• Homeco Daily Needs [ASX:HDN], up 3.06%
• Core Lithium[ASX:CXO], up 2.99%
• Abacus Property [ASX:ABP], up 2.89%

The worst performers:

• Medibank Private [ASX:MPL], down 3.35%
• TPG Telcom[ASX:TPG], down 2.18%
• EVT Ltd [ASX:EVT], down 1.93%
• Capricorn Metals [ASX:CMM], down 1.88%
• Nine Entertainment [ASX:NEC], down 1.83%

With the continued push to decarbonise, low commodity prices may eventually get a needed push through demand.

While Mcquarrie downgraded several mining companies today, citing weak commodity demand, others are shouting that supply will not keep up with demand.

Founder and executive co-chairman of Ivanhoe Mines exclaimed today:

‘We’re heading for a train wreck here..‘

‘My fear is that when push finally comes to shove, copper can go up 10 times.’

So where can value be found in metals related to net zero?

#Lithium Measured & Indicated Resources – ASX Bang for your Buck chart update:
1) $LRS – from 2.1Mt @ 1.21% to 30.2Mt @ 1.37% (20/6).
2) $LLL – from 81.2Mt @ 1.45% to 102.3Mt @ 1.45 (20/6).
3) $LKE – from 2.2Mt LCE @ 203mg/L to 2.9Mt LCE @ 201mg/L (15/6).

Note: This chart only… pic.twitter.com/0zHOH2YCN9

— HOOPZ (@_H00PZ_) June 21, 2023

It’s always a fool’s errand to pick the top and bottom.
How are we tracking compared to past markets?

Hard to compare individual bear markets: current (orange) now looks quite different vs. 2000-2002 (blue) as latter started to see significant bout of weakness at this point in bear
[Past performance is no guarantee of future results] pic.twitter.com/rqAwuEw42b

— Liz Ann Sonders (@LizAnnSonders) June 26, 2023

After a string of hacks across financial institutions in Australia in the past year, the federal government has responded by appointing a new office to help protect Australians.

The National Office of Cyber Security (NOCS) has been established as part of the government’s wider cybersecurity strategy.

The new Cyber Security Coordinator role has been appointed to RAF two-star general Darren Goldie and will report to cyber security minister Clare O’Neil.

‘The coordinator will lead national cyber security policy, the coordination of responses to major cyber incidents, whole of government cyber incident preparedness efforts and strengthening of Commonwealth cyber security capability,’ Home Affairs minister Clare O’Neil said.

Responses today show the government is making a coordinated approach with more sticks than carrots to get big Aussie businesses to protect their data.

APRA hit Medibank with a $250 million punishment for the breach last October in which the medical details of 9.7 million Australians were stolen.

The latest move from APRA is not a direct fine but the forced holding of extra capital. This comes on top of the $2.2 million fine handed out to Medibank (the current maximum).

Ministers expressed their frustration at the small limit of fines after the Optus and Medibank hacks.

Attorney-General Mark Dreyfus then fast-tracked an amendment to lift the fine to a maximum of $50 million.

‘When Australians are asked to hand over their personal data they have a right to expect it will be protected,’ Mr Dreyfus said.

Latitude Financial Services today have been hit with a $1 million lawsuit by a former mayoral candidate affected by the hack.

The firm was hacked in March this year, with cyber criminals stealing 7.9 million customers’ data, including driver’s license plate numbers, DOB, income, and expense information, including loans and bank details.

With the maximum fine now raised to $50 million, a joint investigation is underway into Latitude’s cyber security and practices.

ASX 200 opened up 0.2% this morning, with strength shown across the board as the market bounces from two days in the red.

Meanwhile, US equities continue to fall as tech stocks are downgraded as investors rotate out of growth stocks into defensive assets to manage high-interest rates and indications from the Fed at continued rate hikes. Barclays says pullback in AI stocks represents a ‘tactical opportunity’.

Good morning investors!

Kiryll here, with you all day going through the biggest news.

Here’s today’s AI-generated fray into the markets.

It looks like things might be positive today!