ASX200 Afternoon Report September 19th 2022

The ASX200 trades 6 points (-0.02%) lower at 6733 at 3.00 pm Sydney time.

Another tough session on Wall Street on Friday saw U.S share markets close ~5% lower last week, undercut by hotter-than-expected inflation and a profit warning from FedEx that fuelled concerns over recession.

Also playing a part, nerves ahead of Thursday’s FOMC meeting, which is expected to see the Fed deliver a 75bp rate rise, taking the Fed Funds into a range of 3-3.25%. Accompanying the rates decision, hawkish guidance is expected to set the Feds Funds rate up to finish the year in a 4-4.25% range, about 50bp higher than this time last week.

After being horrendously wrong-footed twice in the past three weeks by reversals on Wall Street, the ASX200 has traded in light volume, with no interest in making the same mistake a third time in quick succession.

OZ Minerals gained 2.3% to $25.82 on reports that BHP is considering upping its offer for the company. Mineral Resources added 3.07% to $68.44, and Rio Tinto added 0.55% to $92.95. Lithium miner Lake Resources added 14.5% to $1.07 on reports that its construction facilities in Argentina are complete.

Real estate stocks gained ahead of the release of the RBA meeting minutes tomorrow that will note the RBA is considering slowing the pace of hikes into year-end and “will be guided by incoming data.” Shopping Centres Australia added 2.82% to $2.55, Mirvac added 1.7% to $2.10, Stockland added 1.7% to $3.51, and Charter Hall Group added 1.22% to $12.47.

A 0.5% fall in Nasdaq futures after re-opening this morning has weighed on tech stocks. Block fell 4.3% to $96.65, Computershare fell 3.85% to $25.01, EML Payments fell 3.5% to $0.90c and ZIP fell 2.44% to $0.80c.

After trading at $2070 six months ago, gold is trading at $1668, threatening to break lower. However, the share price of gold mining stocks has shown surprising strength today. St Barbara added 3.13% to $0.83c, Northern Star added 2.85% to $7.61, Newcrest Mining added 1.9% to $16.95, and Evolution Mining added 1% to $2.05.

The comprehensive rejection from above 7000 last week fits the view that the ASX200 has entered a period of choppy range trading until the start of November.

Source Tradingview. The figures stated are as of September 19th, 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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