Market wrap: tough week ends up on some rare positives

Investors and traders are recovering from a highly eventful week on the share market which included an ongoing crisis among US regional banks, an unexpected rate hike from the Reserve Bank and rate rises in Europe and the US that came with a warning of more rises to come.

Considering all of that it was amazing that the ASX 200 broke a three-day losing streak and ended up 0.4% to 7220 points on Friday, although the index was still down 1.2% for the week.

One of the ingredients for the local rise was better than expected results from Apple announced after the US market close which helped to lift US futures, combined with a 14% rise in after-hours trading in PacWest Bancorp – the latest smaller US bank to have its shares whacked down by more than 50% after a storm of short selling.

Within the local volatility on the back of global events, there were also some big moves in individual stocks.

ANZ pleases investors after NAB disappointment

ANZ (ASX: ANZ) was one of those stocks, with investors cheering the record half-year cash profit of $3.82 billion with a 1.4% share price rise to $23.80.

It was a better reaction that that given to fellow bank National Australia Bank (ASX: NAB) the previous day after it disappointed investors by missing forecasts and declaring a smaller-than-expected dividend.

NAB shares again fell by 0.5% to $26.58 although shares in Commonwealth Bank (ASX: CBA) and Westpac (ASX: WBC) both rose.

Is Macquarie as good as it gets?

The most interesting local bank to watch was probably Macquarie Group (ASX: MQG) which posted a record profit of $5.2 billion for fiscal 2023.

Macquarie shares still shed 0.2% to $177.35 as investors were perhaps worried that this result might represent a high-water mark due to the large reliance on the group’s Commodities and Global Markets unit, which posted a net profit of $6.1 billion, up 38%.

Volatile energy markets have led to a big rise in customers hedging, so the fear is that potentially calmer waters could see profits fall quickly.

Property the big winner on the ASX

The clearest winner on Friday’s trade and the reason that the bourse could eke out a rise amid such global unrest was property, with the sector up more than 2% for the day, with plenty of big stocks such as Dexus (ASX: DXS) and Goodman Group (ASX: GMG) up more than 3%.

For the month property stocks are up 4.27%, which is a trend worth watching.

The other positive story on the share market were the gold miners, with some big rises including Ramelius Mining (ASX: RMS) shares which rose 5.6% to $1.425 and Evolution Mining (ASX: EVN) shares, which jumped 2.3%.

Small cap stock action

The Small Ords index finished up a slim 0.10% for the week at 2901.0 points.

Small cap companies making headlines this week were:

Codrus Minerals (ASX: CDR)

Codrus Minerals’ diversification into critical minerals seems promising with their first hole at the Karloning project in Western Australia intercepted high-grade rare earth elements (REE).

Initial assays revealed significant concentrations of total rare earths plus yttrium (TREYO), praseodymium, and neodymium.

The company’s drilling program has identified two styles of REE mineralisation: hard rock pegmatite and clay-hosted REE, with the former also containing niobium.

A report from Adamas Intelligence predicts that by 2040, the demand for magnet rare earths oxides, including neodymium and praseodymium, will be five times the size of present demand, with a significant annual under-supply.

Karloning also has exploration potential for other battery elements such as dysprosium and terbium.

Critical Resources (ASX: CRR)

Critical Resources revealed an 8 million tonne maiden mineral resource with 1.07% lithium oxide grading at its Mavis Lake project in Ontario, making it the second ASX-listed company with a JORC resource in the region.

The resource estimation comes after an 11-month drilling program and covers just 2% of the project’s 22,984-hectare area.

Drilling continues at Mavis Lake with potential for further resource growth. Critical Resources aims to establish an inventory of high-quality, hard-rock lithium resources to play a significant role in the North American critical minerals sector.

The company plans to engage with potential strategic and off-take partners while advancing the project.

GreenTech Metals (ASX: GRE)

GreenTech Metals discovered a copper-dominant mineralised horizon with peak grades up to 5.4% at the Austin target within its Whundo copper-zinc project in Western Australia.

Assays revealed notable results including 19m at 0.81% copper and 0.15% zinc from 225m.

The new intercepts indicate a threefold thickening of the Austin mineralised zone, and the electromagnetic survey data suggest it may eventually surpass the Whundo resource.

The current Whundo resource estimate is 6.19 million tonnes, grading 1.12% copper and 1.04% zinc. GreenTech Metals anticipates that the deposits will contribute to a significant copper project, with gold, cobalt, and zinc as key in-demand metals.

Incannex Healthcare (ASX: IHL)

Incannex Healthcare has signed a lease for Australia’s first psychedelic-assisted psychotherapy clinic in inner-city Melbourne.

The clinic, set to be completed by August 2023, will be capable of servicing over 600 patients per year, with a ten-week treatment program. The model is designed to be scalable and replicable in other locations.

The psychedelics market is expected to be worth over $2 billion in Australia and up to $60 billion globally.

Incannex has secured the services of three leading clinical psychedelic professionals, Dr. Paul Liknaitzky, Professor Suresh Sundram, and Sean O’Carroll, who will join the board of Clarion Clinics Group and take key executive roles.

The week ahead

Hopefully this week’s economic releases will shed some much-needed light on the current confused economic picture.

At the moment it is hard to tell if inflation is falling or is set to remain high and also if economic growth is moderating or heading into a more serious funk.

At the very least we will get some idea of what the official Treasury position is with the release of the Federal Budget on Tuesday night – along with the usual list of spending and tax changes.

Usually, Treasury are fairly conservative in their projections but with a possible surplus result this financial year, there will also be interest in the projected size of the Budget deficit in the coming year.

Other economic releases to watch out for include the NAB business survey, the monthly consumer confidence index and retail trade figures.

These should give us a few clues on how business is responding to rising costs and whether consumers are pulling their horns in or are still spending.

The Reserve Bank would probably be happy to see more consumer caution as a reaction to their extensive string of interest rate rises.

Looking overseas, the size of the Chinese trade surplus and consumer inflation will be closely watched, while in the US the inflation rate and producer and trade price readings should give a more detailed look at whether inflation remains in retreat or is grimly holding on to make a real nuisance of itself.

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