The Match Out: ASX edges higher ahead of the long weekend

A solid end to a choppy week for the ASX that was dominated by another 25bps rate hike by the RBA. Sector rotation remains a constant with the first cracks appearing in the recent tech rally while the resource stocks found their feet and edged higher, inline with our recent commentary that tech was vulnerable and we should continue our patient transition towards commodity stocks.

**ASX closed on Monday so no Market Matters Reports – Enjoy the long weekend all**

• The ASX 200 finished up +22pts/ +0.32% at 7122
• The IT sector was best on ground (+1.63%) while Materials (+1.00%) & Consumer Discretionary (+0.56%) were also strong.
• Energy (-0.26%) and Utilities (-0.42%) the weakest links.
• Scratching around for things to cover really today as it seemed most checked out early for the June long weekend – leading to a very ‘light on’ day.
• Commonwealth Bank (ASX: CBA) -0.09% have put the odds of a recession in 2023 at 50% saying the lagged impact of the RBA’s moves will bite.
• They downgraded their GDP assumptions, projecting growth of just 0.7% in 4Q23, but they did push out their views around rate cuts following one last +0.25% increase, probably in August.
• They were expecting rates to be cut this side of Christmas but now think that will be a story for 1Q24.
• Sandfire Resources (ASX: SFR) +3.61% rallied today as Copper looks for a low – this was our most recent BUY in our Flagship Growth Portfolio
• A fire at BHP’s Escondida mine in Chile has interrupted production (no injuries reported) and could see Copper spike in the short term – not sure how long production will be impacted.
• Nickel Industries (ASX: NIC) +13.29% rallied after saying it has entered into a conditional share subscription agreement for a A$943m placement of shares to PT United Tractors at $1.10 representing at 27.2% premium to last.
• Aussie Broadband (ASX: ABB) +2.19% has been in a funk of late, languishing below $3. Shaw Analyst Jono Higgins put out a high conviction BUY note this morning – worth a read - Available Here
• Gold stocks were mixed today with Evolution (ASX: EVN) +1.47% and Northern Star (ASX: NST) +1.6% outperforming. Newcrest (ASX: NCM) +0.08%. Given NCM is now linked to Newmont (NMT) the $AUD becomes more influential and the rise overnight back up through 67c doesn’t help.
• As of the close today, the NMT bid is worth $27.42 per NCM share versus today’s close of $26.41
• Next week sees some key US data released – Inflation on the 13^th then FOMC rate decision on the 15^th. UBS is sticking with their view that the FOMC ‘skips’ hiking at the June meeting implying a hike in July/September.
• Iron Ore was ~2% higher in Asia today continuing to defy the bears - Fortescue (FMG) +1.41% & RIO +0.51%
• Gold was up overnight to ~US$1964 before tracking sideways in Asian trade.
• Asian stocks were solid Hong Kong up +0.61%, Japan +1.93% while China was up +0.31%
• US Futures are all marginally lower.

ASX 200 Chart

Sectors This Week

Stocks This Week

Broker Moves

• Boral Raised to Outperform at Macquarie; PT A$4.50
• Pacific Edge Cut to Neutral at Jarden Securities; PT NZ$0.16
• Omni Bridgeway Rated New Buy at Canaccord; PT A$3.86

Major Movers Today

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