ASX200 Afternoon Report July 13th 2022

The ASX200 is trading 3 points lower at 6603 at 3.00 pm Sydney time, marking time ahead of the release of key U.S inflation data this evening.

Providing additional intrigue in the CPI leadup, a fake CPI image on Twitter was behind a late sell-off on Wall Street that forced the Bureau of Labor Statistics to confirm it was fake and to stay tuned for the real release tonight.

The IT sector is the strongest sector aided by a retreat in bond yields. Megaport added 5.63% to $6.49. Afterpay owner Block added 3.3% to $96.35, Wisetech Global added 1.5% to $41.75, while Xero added 1% to $85.18. Sezzle fell 15.7% to $0.22c as the fallout from its failed merger with ZIP extended into a second session.

Consumer Discretionary stocks have also enjoyed the overnight sell-off in bond yields. Dominoes Pizza lifted 2.9% to $70.97, JB Hi-Fi added 2.1% to $40.16, Harvey Norman added 1.69% to $3.92 and casino operator Star Entertainment added 1.2% to $29.92.

Coal miners have gained as Europe braces for the complete loss of Russian gas supplies, sending the price of coal skyrocketing towards $400. Whitehaven Coal (WHC) added 4.65% to $5.40, New Hope Coal (NHC) added 3.1% to $4.02, Coronado Coal (CRN) added 1.6% to $1.59, Yancoal (YAL) added 1.06% to $5.26.

Concerns over fresh covid lockdowns in China and the rout in base metal prices have weighed on the Materials Sector. South32 lost 1.8% to $3.49. Rio Tinto lost 1.5% to $94.00, Mineral Resources fell 1.4% to $44.18, BHP fell 1.36% to $36.95, and OZ Minerals lost 0.1% to $16.27.

The big banks have had a mixed day. ANZ has fallen by 1% to $22.48 as it confirmed it was in discussions to buy accounting company MYOB from KKK. WBC lost 0.1% to $20.08. Elsewhere Macquarie added 1.8% to $170.68, NAB added 0.55% to $28.28, CBA was trading flat at $93.63.

Lithium miner Vulcan energy added 6.5% to $5.58, Pilbara Minerals added 5.13% to $2.36, Core Lithium added 2.34% to $0.875 after it upped its reserve estimates yesterday for the wholly-owned Finniss Lithium Project in the NT.

Turning to the charts, the ASX200 needs to see a sustained break above the 6750/6950 resistance zone to negate the technical damage caused by the breakdown in June. Until then, downside risks remain.

Source Tradingview. The figures stated are as of July 13th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

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