The Match Out: Market stalls, James Hardie (JHX) reports & rallies

• The ASX 200 finished down -32pts/ -0.45% at 7234
• The Material sector was best on ground (+0.22%) and only sector in the green.
• Staples (-1.23%), IT (-0.96%) & Healthcare (-0.96%) the weakest links.
• The RBA minutes were released today from the May meeting where they lifted rates by 25bps to 3.85% - NAB thinks they’ll go one more by August, so does ANZ – CBA says they’ll sit on their hands in June but we should all be watching the data.
• The move put the kibosh on consumer confidence which fell in May by 7.9% to 79 points. Bill Evans saying….a strict interpretation would attribute about 60% of the May fall to the federal budget and the remaining 40% to the rate decision and other factors.
• China retail sales were up +18.4% YoY for April while Industrial output rose +5.6%.
• James Hardie (ASX: JHX) +8.27% rallied after results met expectations for FY23 while 1Q24 guidance was above – at the midpoint they have guided to 1Q profit of $US155m v $US137m consensus – we’ll have more on JHX tomorrow morning - we hold in our Flagship Growth Portfolio.
• Appen Ltd (ASX: APX) is raising $60m in fresh capital at $1.85, nearly a 20% discount to last – we lost money in Appen last year, cutting our position at $6.30 at the time – painful but less so now! A big turnaround needs to happen here under the CEO.
• Lithium stocks one of the very few bright spots on the market today – Pilbara (ASX: PLS) remains our preferred play ending +1.27% higher at $4.79
• The investment platforms caught our eye, HUB24 (ASX: HUB) -4.94% and NetWealth (ASX: NWL) -4.26% - these are ‘risk on’ stocks and money coming out of here is a sign the worm is turning in the short term.
• Interesting to read that Michael Burry, who was made famous in The Big Short, is now adding to his bullish bets on e-commerce stocks JD.com (NYSE: JD) and Alibaba (NASDAQ: BABA) – we own the latter in our International Equities Portfolio.
• Iron Ore was up ‘smalls’ in Asia
• Gold was down -US$12, settled $US2004 at our close.
• Asian stocks were mostly lower Hong Kong down -0.02%, Japan +0.57% while China was off -0.42%
• US Futures are all down, around -0.30%  

ASX200

Life360 (ASX: 360) $6.47

360 +11.74%: the digital safety company provided a strong 1Q update today as the company sits on the cusp of breakeven for the first time. Gross profit was up 40% with margins expanding 400bps as software subscription revenue grows as a proportion of sales. With operating leverage working its magic, the company posted an EBITDA loss for the quarter of just -$0.5m which compares to a FY EBITDA loss of $40m in FY22. From here, management expects to be operating cash flow positive in each quarter, grow subscription revenue by more than 50% and gave FY revenue guidance of $300-310m, in line with consensus. Shares hit a 5-month high today thanks to the strong update.

Life360 (ASX:360)

Broker Moves

• Netwealth Rated New Underperform at Barclay Pearce Capital
• Elders Raised to Market-Weight at Wilsons; PT A$7.04
• Tyro Payments Cut to Underweight at Wilsons; PT A$1.33
• Tyro Payments Raised to Outperform at Macquarie; PT A$1.80
• Acusensus Rated New Buy at Canaccord; PT A$5.40
• Elders Raised to Buy at CLSA; PT A$8.75
• TPG Telecom Cut to Equal-Weight at Morgan Stanley; PT A$5.60
• Rio Tinto Raised to Neutral at JPMorgan; PT A$107
• Newcrest Cut to Neutral at Macquarie; PT A$30
• Elders Cut to Neutral at Macquarie; PT A$7.77
• Northern Star Cut to Accumulate at Ord Minnett; PT A$14.20

Major movers today

Have a great night

The Market Matters Team

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