ASX200 Afternoon Report April 14th 2022

The ASX200 has added 47 points today to be trading at 7526 at 3.00 pm Sydney time in its last session of a holiday-shortened week.

The list of challenges facing equity markets is a mile long. However, with allies like the Energy and Materials sectors, the ASX200 is well-positioned to take a crack at its all-time 7632 high after the Easter Long weekend.

Crude oil has rebounded over 10%this week from below $93.00 to above $104.00 p/b. The latest leg higher came after another month of missed production quotas by OPEC. Supply from OPEC-10 increased by 81kb/d in Mar '22, a 68% miss compared to a 254kb/d increase in the target quotas for the month.

Beach Energy (BPT) added 1.58% to $1.61, Santos (STO) lifted 1.2% to $8.20, Woodside Petroleum (WPL) added 1% to $33.27.

Not to be outdone, Natural gas futures have surged over 12.5% this week and are trading 60% higher than where they were a month ago on the Ukraine war and supply concerns. The price surge has implications for farming that use nitrogen fertilisers produced from natural gas to amplify crop production.

Origin Energy (ORG) added 0.8% to $6.57, AGL added 0.7% to $8.63. Coal miners, Yancoal (YAL) added 6.48% to $3.42, Coronado (CRN) added 1.56% to $2.28, while Whitehaven Coal (WHC) lifted another 2.42% to $4.65.   

Prospects of further easing of monetary policy in China kept the fire burning under the price of iron ore and the big miners. BHP Group (BHP) added 1.26% to $52.42. Fortescue Metals (FMG) added 1.2% to $21.59. Mineral Resources (MIN) added 0.5% to $62.10. Rio Tinto (Rio) lifted 0.1% to $120.58.

Taking their lead from a strong earnings report from Delta airlines in the U.S, travel stocks have ripped higher. Qantas (QAN) added 7.6% to $5.48, Webjet (WEB) added 5.88% to $5.76, Flight Centre (FLT) added 5.11% to $21.19 and Corporate Travel (CTD) lifted 3% to $24.39.

U.S. bond yields fell again overnight post the lower-than-expected core U.S. inflation print for March earlier this week, providing some further respite for bond beat local tech stocks.

Cloud computing company Megaport (MP1) added 4.66% to $12.59. Life 360 (360) added 4.5% to $5.35, Xero (XRO) added 1.73% to $102.47. Afterpay owner Block (SQ2) added 1.5% to $167.40. Another tough day in the office for BNPL firm ZIP Co (Z1P), which lost another 3.5% to $1.24, making another fresh cycle low and Sezzle (SZL), which dropped 5.9% to $1.03.

Also having a tough day in the office, Bank of Queensland fell 6% to $8.01 after its earnings report disappointed. Fellow regional bank Bendigo (BEN) dropped 2% to $10.29. Westpac (WBC) fell 0.50% to $24.17, National Australia Bank (NAB) fell 0.3% to $32.95. ANZ fell 0.1%% to $27.46. Commonwealth Bank (CBA) traded flat at $106.55.

A relatively quiet day for Lithium stocks. Allkem (AKE) added 1.73% to $13.49. AVZ Minerals (AVZ) added 1.5% to $1.17. Iluka (ILU) fell 1.3% to $12.38, Galan Lithium (GLN) fell 1% to $2.01, and Pilbara Minerals (PLS) lost 0.5% to $2.95.

The AUDUSD is trading steady at .7465 after the Australian Labour force report for March showed the Australian economy added 17.9k new jobs in March while the unemployment rate remained stable at 4%. Both were marginally weaker than expectations; however, the unemployment rate r remains at its lowest level since August 2008.

Source Tradingview. The figures stated are as of April 14th, 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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