Evening Wrap: ASX 200 rebounds as employment data stokes rate hike fears, Santos +6% on quarterly results
The S&P/ASX 200 closed 65 points higher, up 0.75%.
A surprise plunge in unemployment from 4.4% to 4.1% reignited February interest rate hike bets and sent local bond yields higher.
On the ASX, Energy stocks led on stronger oil-and-gas sentiment after Santos’ quarterly report was well received by investors, while Discretionary stocks clawed back from eight-month lows.
Major Banking stocks were also higher, but it seems at the expense of the Resources sector (particularly Gold stocks — which in many cases plummeted! 💥)
Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap.
Also, I have detailed technical analysis on the Nasdaq Composite and the S&P/ASX 200 in today's ChartWatch.
Let's dive in!
Today in Review
Thu 22 Jan 26, 5:01pm (AEST)
Name
Value
% Chg
Major Indices
ASX 200 8,848.7
+0.75%
All Ords 9,172.5
+0.70%
Small Ords 3,967.2
+0.07%
All Tech 3,235.1
+0.63%
Emerging Companies 3,421.2
+0.00%
Currency
AUD/USD 0.6803
+0.60%
US Futures
S&P 500 6,922.0
+0.17%
Dow Jones 49,315.0
+0.10%
Nasdaq 25,539.0
+0.27%
Sector
Name
Value
% Chg
Energy 8,964.8
+2.98%
Consumer Discretionary 4,033.8
+2.42%
Utilities 9,732.3
+1.90%
Financials 9,151.3
+1.87%
Health Care 34,425.6
+1.51%
Consumer Staples 11,774.1
+1.10%
Industrials 8,516.0
+0.84%
Real Estate 3,897.3
+0.80%
Communication Services 1,702.7
+0.38%
Information Technology 2,021.5
-0.27%
Materials 22,883.8
-1.71%
Markets
ASX 200 Session Chart
The S&P/ASX 200 (XJO) finished 65 points higher at 8,848.7, 0.75% from its session high and 0.18% from its low. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by a very healthy 196 to 76.
Fund flows: Gold folds, banks swing ♻️
Forget the “tech-wreck” we’ve been tracking… today was all about the “gold-fold”!
Looking at the performance of local gold stocks — which at the Gold Sub-Index (XGD) level dove 5.6% — you might think that the gold price got belted on TACO Wednesday (Trump Always Chickens Out!).
Nope, it was still up on the session, albeit off highs, and it’s only down 0.8% in Asian trade today.
Gold Futures (Front month, back-adjusted) COMEX Top vs Gold Sub-Index (XGD) (-5.6%) Bottom
You might have heard the phrase: ASX gold stocks are “high beta” plays. This means they tend to deliver supercharged returns versus the gold price — on the way up and on the way down. Today seems evidence of this, but I do note that several of the majors did report quarterly production updates today. It may have been a case of reality lagging expectations, or it may have just been good old fund flow shenanigans!
Can I say (leaning towards the latter), that gold was/is a massively crowded trade. So, it's plausible that when many aim to lock in profits at the same time — and when at the same time demand falters on a day where many of the key risk factors driving gold’s ascent have taken a breather — it could create a substantial imbalance between supply and demand indeed.
Still, some of the moves (and massive black candles within impeccable uptrends) are confounding! 🤷
Major gold stocks today:
- Pantoro Gold (PNR) (-11.2%)
- Emerald Resources (EMR) (-8.7%)
- Northern Star Resources (NST) (-8.4%)
- Regis Resources (RRL) (-7.8%)
- Ora Banda Mining (OBM) (-7.2%)
- Bellevue Gold (BGL) (-6.5%)
**Possibly also driving the gold-fold, or at least sucking in some of the capital resulting from pruning gold sector exposure — was the recovery of our Swinger Sector, Financials (XFJ) (+1.9%) (did I call it a new Loser Sector yesterday!? 🤦)
Financials, still swinging…
- Bank of Queensland (BOQ) (+5.3%)
- Bendigo and Adelaide Bank (BEN) (+3.5%)
- National Australia Bank (NAB) (+3.0%)
- Judo Capital Holdings (JDO) (+3.0%)
- Macquarie Group (MQG) (+2.4%)
- Commonwealth Bank of Australia (CBA) (+2.3%)
- Westpac Banking Corp. (WBC) (+2.1%)
- ANZ Group Holdings (ANZ) (+0.6%)
Why the sudden about face? Well, as I noted yesterday, "news" i.e., new information, can, when it breaks, have a major impact on demand and supply. Today's banking sector news was a biggie, several ratings upgrades:
- BOQ = Macquarie: Neutral from Underperform, UBS: BUY from Sell
- MQG = UBS: BUY from Neutral
- NAB = Macquarie: OUTPERFORM from Neutral; UBS: BUY from Neutral
But Financials wasn’t the only of the usual Loser Sectors to show a massive white candle today… as in, bigger than yesterday’s horrific black one!!! See below the showing from Consumer Discretionary (XDJ) (+2.4%) and I note that Health Care (XHJ) (+1.5%) wasn’t terrible either…
With these stocks prospering, there was always going to be a good chance that the Resources (XJR) (-1.2%) was going to be down... ⚖️
That's one heck of a reversal of fortunes... 📉📈
Two sectors that remained terrible, and that moved in keeping with their Loser Sector status, were Information Technology (XIJ) (-0.3%) and Communication Services (XTJ) (+0.4%). Tech down again? Tisk-tisk, and while the XTJ did scrape a gain, it lagged the broader market.
One sector that deserves an honourable mention today is Energy (XEJ) (+3.0%) — today’s best sector by a long shot. The trend ribbons suggest that it’s largely overall-sideways… but today’s candle does continue a growing run of rising peaks and rising troughs… 🧐
Major energy stocks today:
- Beach Energy (BPT) (+5.8%)
- Santos (STO) (+5.3%)
- Viva Energy Group (VEA) (+5.0%)
- Nexgen Energy (NXG) (+2.9%)
- Woodside Energy Group (WDS) (+2.9%)
- Karoon Energy (KAR) (+2.8%)
- Boss Energy (BOE) (+2.3%)
- Ampol (ALD) (+2.2%)
A very strong performance from energy stocks today
Today's best blue chip gainers
Company
Last Price
Change $
Change %
1mo %
1yr %
The A2 Milk Company (A2M)
$8.53
+$0.44
+5.4%
-5.6%
+45.3%
Bank of Queensland (BOQ)
$6.77
+$0.34
+5.3%
+3.4%
+1.0%
Santos (STO)
$6.38
+$0.32
+5.3%
+6.9%
-12.5%
South32 (S32)
$4.40
+$0.22
+5.3%
+30.6%
+25.4%
Eagers Automotive (APE)
$29.10
+$1.41
+5.1%
+21.3%
+150.8%
Aristocrat Leisure (ALL)
$57.73
+$2.07
+3.7%
+0.3%
-18.3%
Bendigo and Adelaide Bank (BEN)
$11.14
+$0.38
+3.5%
+8.6%
-15.5%
Sigma Healthcare (SIG)
$3.02
+$0.1
+3.4%
+0.7%
+6.7%
National Australia Bank (NAB)
$42.43
+$1.25
+3.0%
+0.7%
+11.4%
Lynas Rare Earths (LYC)
$16.75
+$0.48
+3.0%
+37.4%
+138.3%
Telix Pharmaceuticals (TLX)
$10.92
+$0.31
+2.9%
-7.7%
-58.2%
Woodside Energy Group (WDS)
$24.20
+$0.68
+2.9%
+6.1%
-5.5%
Origin Energy (ORG)
$11.80
+$0.32
+2.8%
+6.2%
+5.4%
SGH (SGH)
$47.13
+$1.17
+2.5%
+1.4%
+1.2%
Wesfarmers (WES)
$83.12
+$2.
+2.5%
+2.6%
+18.0%
Macquarie Group (MQG)
$210.87
+$5.02
+2.4%
+5.1%
-10.4%
REA Group (REA)
$185.90
+$4.29
+2.4%
+2.1%
-19.7%
Pinnacle Investment Management (PNI)
$17.89
+$0.41
+2.3%
+8.5%
-26.1%
Commonwealth Bank of Australia (CBA)
$150.61
+$3.39
+2.3%
-4.5%
-2.9%
Ampol (ALD)
$30.61
+$0.65
+2.2%
-3.9%
+3.6%
Today's worst blue chip losers
Company
Last Price
Change $
Change %
1mo %
1yr %
Northern Star Resources (NST)
$26.18
-$2.41
-8.4%
+1.4%
+54.1%
Capricorn Metals (CMM)
$14.87
-$0.84
-5.3%
+4.0%
+107.7%
Ramelius Resources (RMS)
$4.58
-$0.25
-5.2%
+17.7%
+100.0%
Fortescue (FMG)
$21.48
-$1.16
-5.1%
-1.8%
+12.1%
Genesis Minerals (GMD)
$7.46
-$0.39
-5.0%
+6.7%
+159.0%
Evolution Mining (EVN)
$14.11
-$0.68
-4.6%
+11.8%
+154.7%
Perseus Mining (PRU)
$6.06
-$0.25
-4.0%
+9.2%
+125.3%
Netwealth Group (NWL)
$24.87
-$0.99
-3.8%
-1.5%
-7.5%
Medibank Private (MPL)
$4.61
-$0.09
-1.9%
-3.2%
+20.7%
Sandfire Resources (SFR)
$19.11
-$0.26
-1.3%
+13.1%
+93.4%
Xero (XRO)
$97.76
-$1.14
-1.2%
-15.5%
-41.7%
BHP Group (BHP)
$48.08
-$0.4
-0.8%
+8.4%
+19.5%
Light & Wonder (LNW)
$168.47
-$1.32
-0.8%
+10.7%
+16.6%
Life360 (360)
$26.53
-$0.15
-0.6%
-19.6%
+12.1%
Insurance Australia Group (IAG)
$7.37
-$0.04
-0.5%
-6.5%
-14.8%
Endeavour Group (EDV)
$3.82
-$0.02
-0.5%
+4.9%
-8.6%
Pro Medicus (PME)
$177.45
-$0.92
-0.5%
-18.4%
-31.3%
Wisetech Global (WTC)
$61.72
-$0.3
-0.5%
-12.1%
-47.7%
ChartWatch
Nasdaq Composite Index
Analysis
Trump changes nothing.
Well, nothing with respect to the fact that prices still move on the interaction between demand and supply.
Trump changes nothing! D vs S = P still rules!
He’s just one of the drivers of these critical price determining factors — albeit somewhat an unpredictable one!
Ultimately though… his threats, and his subsequent back downs, boil down to what we interpret as trends, price action, candles, and volume.
Fortunately, we didn’t make any rash decisions based on Tuesday’s nasty supply-side candle. I noted that I would suspend the addition of new long-side risk, but that I remained comfortable at the prevailing 2/3RP portfolio risk limit. Wednesday’s rally — on another TACO (“Trump Always Chickens Out”) result — suggests little change is required today, also.
Every other finance news outlet has spoken of the bounce in US stocks. But you know better, because you know how to read candles. 🧐
Wednesday’s candle was far from a convincing and decisive demand-side controlled move. Yes, the Comp was up like the finance journo’s noticed, but we note that decent upward pointing shadow that hints of sell the rally… and not “Phew, TACO, quick, let’s get back in!!!”
Next, consider that the top of Wednesday’s candle didn’t bridge the gap-down created by Tuesday's candle — we’re still a long way from a full recovery of Tuesday’s panic.
Net-net, as far as D vs S goes, the damage to P is real — and it’s concerning.
The top of Wednesday's candle tipped perfectly
