The Match Out: ASX rallies as the Fed hikes rates, IT for 3rd straight session, Tech leads, is PointsBet a takeover target?
A bullish session for the ASX today, the 2nd on the trot with some aggressive buying targeted at the IT stocks following in the footsteps of the overnight move. Higher rates are meant to be a negative for Tech as we’ve so often written, however markets are forward looking and rate hikes had already been priced in, the certainty of the move underpinning a relef rally.
- The ASX 200 finished up +75pts/ +1.05% at 7250
- The IT stocks were best on ground (+3.55%) while Communications (+1.36%) bounced back from recent weakness.
- The defensive Utilities lagged (-0.62%) and Staples (-0.22%) as you’d expect, however the banks also cooled after a solid run of late.
- Local employment data was out at 11.30am this morning printing 4.0% v 4.1% expected with +77.4k jobs created plus the participation rate was firmer than thought. That unemployment rate is a 14 year low, the last time we were at this level was in August of 2008.
- Another data print that implies the RBA will soon follow the US Fed’s lead and raise rates.
- Beaten up tech / growth names rallied hard today, Zip Co (Z1P) +10.14%, Pointsbet (PBH) +10.32%, Dubber (DUB) +16.19%
- The ASX had a major outage today with ASX 24, the main platform for futures and options being out for around 4 hours. A hardware issue to blame, not ideal on options expiry.
- Asian stocks rallied hard again, the Hang Seng +6% around our close, tech the standout with the Asia Tech Tigers ETF up +13.5% following moves of +36% for Alibaba and +39% for JD overnight. Tencent (700 HK) was up another 6% today.
- Discussions about a ceasefire in Europe are ongoing, some newswires have described them as ‘promising’ although it is unclear how many concessions each side is willing to make.
- Cimic (CIM) unchanged: The statement on the Hochtief offer to come in the week of March 28, they already own 84% of CIM so looks like a done deal!
- Macquarie Group (MQG) +1.14% cut to sell vs hold at Morningstar, we wouldn’t read too much into that!
- ReadyTech (RDY) +3.38% makes small acquisition, this is a stock we like.
- We met with Service Stream (SSM) CEO & CFO today, and this is a stock with a better future than recent past, we’ll cover in more detail in coming notes.
- Oil has dipped under US$100 to the lowest level in three weeks on the back of easing supply concerns and developments about a revived nuclear deal with Iran.
- Iron Ore rallied today, up +5.23% in Asia
- Gold was marginally higher, +US$6 in Asia, to be around $US1933 at our close
- Hong Kong up +6.24%, Japan +3.13% while China was up +2.57%
- US Futures are flat
Readytech (RDY) $3.06
RDY +3.38%: announced a small bolt-on acquisition to bolster their workforce management side of the business today. They’ll pay $2.1m upfront for recruitment SaaS business PheonixHRIS, valuing it at a 2.7x EV/Revenue including the full earn out. It adds a new element to their all-in-one HR offering with the new tech easily integrated to Readytech’s current system, it should be an easy upsell for existing clients.
- Jumbo Interactive Rated New Outperform at Macquarie; PT A$20
- Uniti Group Cut to Hold at Ord Minnett; PT A$4.05
- Reliance Worldwide Raised to Overweight at JPMorgan; PT A$5.30
- Chalice Mining Rated New Overweight at JPMorgan; PT A$9
Major Movers Today
Enjoy your night
The Market Matters Team
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James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...