CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

ASX200 Afternoon Report May 18th 2022

May 18, 2022 6:23 AM

The ASX200 is trading 60 points higher at 7173 at 3.15 pm, looking to lock in a fourth straight day of gains after a wicked rebound on Wall Street overnight.

The rally on Wall Street came after robust retail sales data helped ease fears of a growth slowdown. Despite hawkish comments from Fed Chair Powell, who noted that inflation is the priority and that financial conditions have already "tightened quite a bit".

In recent weeks this type of hawkish Fed speak would have knocked the lights out of the market; however, after its sharp repricing lower, valuations now reflect an expectation that U.S yields will be in the 3.0-3.25% range by March 2023.

Shaking off news of fresh Covid-19 outbreaks around key Chinese cities, the Materials sector has helped drive the index higher.

South 32 (S32) added 5.26% to $4.71, Mineral Resources (MIN) added 2.5% to $60.66, Oz Minerals (OZL) added 3.5% to $22.80, Lynas Rare Earths (LYC) added 3.13% to $972. BHP Group (BHP) added 3.07% to $46.97, Rio Tinto (Rio) added 2% to $108.91. Fortescue Metals (FMG) added 1.70% to $19.72.

A strong rally in the Nasdaq overnight has helped the local IT sector higher. Seek (SEK) added 4.4% to $25.39, Life 360 (360) added 3.14% to $3.61, Megaport (MP1) added 2.56% to $7.23, Wisetech Global (WTC) added 2% to $41.21, Altium (ALU) added 1.9% to $28.10 and Afterpay owner Block (SQ2) added 1.94% to $117.50. BNPL stock Zip (ZIP) fell 1.9% to fresh cycle lows at $0.90c.

Consumer Discretionary stocks have climbed despite a tepid Q1 2022 Wages print which rose to 2.4% for the year, significantly below the inflation rate of 5.1%. Real wages - adjusted by headline inflation - are down 2.6% over the past year.

Flight Centre (FLT) added 4.55% to $21.16, Dominoes Pizzas (DMP) added 2.86% to $70.19, Webjet (WEB) added 1.95% to $5.76, and Harvey Norman (HVN) added 1% to $4.59.

The ASX200 Financial Sector has edged sideways. ANZ added 1.09% to $25.89, Macquarie (MQG) added 0.84% to $182.01. Westpac (WBC) added 0.1% to $24.48. Commonwealth Bank (CBA) added 0.05% to $105.17. National Australia Bank (NAB) fell by 0.57% to $31.30.  

The rebound in Lithium names has extended again today. Lake Resources (LKE) added 3.1 % to $1.51. Galan Lithium (GLN) added 3.5% to $1.48. Pilbara Minerals (PLS) added 2.4% to $2.80. Allkem (AKE) added 2.16% to $12.32. Iluka Resources (ILU) added 1.7% to $10.16.

Brambles (BXB) shares have bounced by 3.7% to $11.12 after CVC walked away from the pallet and distribution company yesterday.

Boral (BOR) has fallen by 3.12% to $3.11 after it warned of a $45m hit to FY22 earnings due to heavy rain in NSW and Queensland as well as rising energy costs.

Turning to the charts, after the ASX200 reached our 7000/6950ish downside target last week, we called for a recovery towards 7200. From broadly within the 7200/7300 region, we would ideally like to see one more leg lower towards range lows 6950/6750. But let's see what this weekend's Federal Election brings before making any new calls.

Source Tradingview. The figures stated are as of May 18th, 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

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024