The Match Out: ASX higher as tech enjoys the prospect of lower rates

Lower rates likely in the US after a more benign inflation print overnight put some heat under our market today with the rate-sensitive areas doing best. 11.30am saw the low for the day before we ground steadily higher throughout the session.

• The ASX 200 finished up +48pts/ +0.67% at 7251
• The Utilities sector was best on ground (+2.09%) while IT (+1.73%) & Energy (+1.35%) were also strong.
• Financials (+0.10%) and Staples (+0.14%) underperformed a strong market but still finished higher on a day that saw broad-based buying.
• Lead Portfolio Manager James Gerrish was on Ausbiz this morning discussing Inflation, Banks & the move by UBS to downgrade some of the large-cap resources – Watch Here
• Technology stocks are benefiting from the decline in bond yields after US inflation came in lower than expected, Block (ASX: SQ2) +8.15% and Novonix +6.04% however Xero (ASX: XRO) +2.97% & Altium (ASX: ALU) caught our eye - both look good here, particularly XRO coming from a low base. If we didn’t own, we’d buy.
• St Barbara (ASX: SBM) +13.85% and Genesis (ASX: GMD) +12.55% were both positive after coming back on stream post their recent deal – More insight is available here – we are long SBM in our Emerging Companies Portfolio.
• G8 Education (ASX: GEM)+7.32% rallied on good volume today following yesterday’s trading update – we covered it this morning in our portfolio positioning report. Cannacord raised it to Buy and $1.32 PT
• TPG Telecom (ASX: TPG) -2.76% said they found evidence of unauthorised access to a Hosted Exchange service i.e. someone trying to scrape data. Doesn’t sound significant, and we suspect this would not have garnered an ASX announcement in times past.
• Endeavour (ASX: EDV) -4.33% fell after Woolies sold 98.5m shares representing 5.5% of the company – they say they’ll retain 9.1% with no intentions to sell again.
• Magellan (ASX: MFG) +0.54% held an investor showcase today singling out beauty products giant L’Oreal as a key buy – you’d think this would be a rigorously researched call! They also said that the US over China was the place to be due to regulatory risk!
• JPMorgan has become the latest broker to question the rally in the major miners, downgrading Rio Tinto and Fortescue to “underweight”.
• Iron Ore was flat in Asia today, Fortescue (ASX: FMG) +1.14% bounced back after a pullback.
• Gold was up overnight to ~US$1810 – and flat during Asian trade.
• Asian stocks were okay Hong Kong +1.03%, Japan +0.80% while China was up +0.26%
• US Futures are all up, around +0.30%

ASX 200 Chart

Broker Moves

• AGL Energy (ASX: AGL): Rated New Buy at Jefferies; PT A$9.24
• Bendigo & Adelaide (ASX: BEN): Cut to Neutral at Citi; PT A$10
• Corporate Travel (ASX: CTD): Rated New Positive at Evans & Partners Pty Ltd
• Flight Centre (ASX: FLT): Rated New Positive at Evans & Partners Pty Ltd
• Fortescue (ASX: FMG): Cut to Underweight at JPMorgan; PT A$16.20
• G8 Education (ASX: GEM): Raised to Buy at Canaccord; PT A$1.32
• Rio Tinto (ASX: RIO): Cut to Underweight at JPMorgan; PT A$95
• Sims (ASX: SGM): Cut to Underweight at JPMorgan; PT A$12
• South32 (ASX: S32): Raised to Overweight at JPMorgan; PT A$4.70
• Webjet (ASX: WEB): Rated New Neutral at Evans & Partners Pty Ltd; PT A$6.81

Major Movers Today

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