The Match Out: SVB concerns weigh on local shares, Critical mineral shares weak on EU/US deal

The daily Match Out for Monday 13 February with Market Matters' James Gerrish.
James Gerrish

Market Matters

The jitters caused by the collapse of Silicon Valley Bank caused a stir in the local market today, even after it was announced that depositors with the troubled bank would have access to their funds in full from Monday thanks to the US Treasury, the Fed and the Federal Deposit Insurance Corp (FDIC) that is currently managing the bank’s assets. The news saw the US Futures rally strongly, however, the ASX set a new 2-month low midmorning before staging somewhat of a recovery as the day went on. Given the turmoil, it was unsurprising to see Financials and Tech as the key underperformers, whereas materials and energy were strong thanks to a weaker USD and strength in the gold price.

  • The ASX 200 finished down -35pts/ -0.50% at 7108
  • The Materials sector was best on ground (+1.03%) while Energy (+0.26%) was the only other sector higher.
  • Financials (-1.37%), Tech (-1.32%) and Real Estate (-1.22) were the weakest links. In total, 6 sectors fell by more than 1% today.
  • A number of companies clarified their exposure to the collapse of SVB. Xero (ASX: XRO ) said it had around $US5m with the bank, accounting for less than 1% of its liquid assets while Audinate (ASX: AD8) said it had “no known exposure” at this stage.
  • Life360 (ASX: 360) -0.4% said it had $6.1m in deposits with the bank, and a further $75.4m money market mutual funds held in custody with SVB, though these are not expected to be at risk given they were not comingled with the bank’s assets.
  • Stocks with exposure to critical minerals were sot today as the US & the EU sought a deal to allow European companies access to the strong support the US Government is supplying to the space. Lithium, nickel and cobalt are just a few of the minerals that would be covered in the deal and would take away some of the preferential treatment provided to Australian and Asian suppliers in the space.
  • Iron Ore was ~0.32% higher in Asia today, helping support the major miners including BHP closing up 1.82%
  • Gold continued to rally in Asian trade today, +$US12.50/+0.68% to settle at $US1881 at our close. Remelius (ASX: RMS) was one of the better performers as a result, up over 10%.
  • Asian stocks were mixed, Nikkei -1.50% but the Hang Seng was up +2.00% and China +0.83%.
  • US Futures are strong following the support of SVB. S&P +1.70% and Nasdaq +1.75%.

ASX 200 Chart

Broker Moves

  • Capricorn Metals Raised to Buy at Canaccord; PT A$4.75
  • Sayona Mining Raised to Speculative Buy at Canaccord

Major Movers Today

Have a great night

The Market Matters Team

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James Gerrish
Portfolio Manager
Market Matters

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...

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