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ASX holds ground, gold miners surge, unemployment dips

Daily Market Update

 The S&P/ASX200 (ASX: XJO) managed a small gain, finishing 0.1 per cent higher despite 7 out of the eleven sectors finishing underwater today.
 
The highlight of the session was the materials sector, which gained 3.1 per cent behind a massive surge in gold miners.
 
The biggest detractor was the communications sector with the likes of Seek (ASX: SEK) and TPG Telecom (ASX: TPG) falling by more than 2 per cent.
 
Gold miners rallied after US bond markets appear to be pricing in an unprecedented 50 basis point rate hike in March, despite the Fed making no such suggestion.
 
Northern Star (ASX: NST) gained over 11 per cent after reporting $950 million in quarterly sales to finish the year and confirming they would meet production guidance as expected. Evolution (ASX: EVN) also benefitted jumping 8.5 per cent.
 
The travel sector took another hit after Sydney Airports (ASX: SYD) highlighted the damage of the Omicron outbreak, with December foot traffic down 69 per cent on 2019 levels.
 
In January, it is still down 85 per cent which pressured the likes of Flight Centre (ASX: FLT) and Webjet (ASX: WEB) down around 3 per cent each.
 
Woodside reports, Zip’s record, Afterpay merger complete
 
All eyes will be on the Reserve Bank next week after unemployment fell another 0.4 per cent to 4.6 per cent in December.
 
That said this came before the massive furloughs impacted the economy in January. Hours worked increased just 1 per cent despite the jump.
 
BHP (ASX: BHP) and Fortescue (ASX: FMG) both rallied, adding 4.7 and 3.3 per cent after the iron ore price once again exceeded US$130 per tonne.
 
On the energy side, Santos (ASX: STO) delivered record annual production and sales revenue in 2021, reporting 92.1 million barrels.
 
This saw sales revenue gain 34 per cent as a combination of higher prices and more exports went straight to the bottom line.
 
It was a similar story at Woodside (ASX: WPL) where revenue hit a new record of $2.9 billion, an 86 per cent improvement for the quarter, driven by a 22 per cent increase in volumes.
 
The records continued at BNPL player Zip Co (ASX: Z1P) which reported $167 million in revenue and a record $2.6 billion in transactions for the quarter, up 53 per cent on the prior year.
 
Shares fell regardless, down 1.4 per cent, whilst Afterpay’s merger with Square is now complete, relisting under the code Block (ASX: SQ2)
 
Stock selloff continues, set to push ASX lower, airlines looking forward, Peloton tanks
 
The US stock market continued its downward trend overnight with all three benchmarks finishing in negative territory following the Nasdaq officially entering a correction.
 
The Nasdaq fell most, down 1.3 per cent, with the S&P500 and Dow Jones down 1.1 and 0.8 per cent respectively.
 
Economic data turned negative with an unexpected jump in unemployment claims due to layoffs associated with the Omicron outbreak, whilst home sales slumped close to 5 per cent in December.
 
Shares in popular pandemic winner Peloton (NASDAQ: PTON) which makes exercise equipment fell another 24 per cent, taking the 3-month loss to 75 per cent after announcing they would be ceasing production due to falling demand from consumers.
 
Both American (NYSE: AAL) and United Airlines (NYSE: UAL) reported smaller than expected losses, losing US$931 million and US$646 million each in the final quarter of 2021.
 
As they focused on reducing capacity and doubled down on their most profitable airline routes; shares were down over 3 per cent. 
 
Shares in aluminium miner Alco (NYSE: AA) gained more than 2.5 per cent after management confirmed surging demand for their production due to a boom in construction and flagged supply issues should Russia invade Ukraine as President Biden has predicted.




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