President Biden delivered his annual State of the Union address during the session, with strong commentary around Ukraine and targeted investment into domestic manufacturing capacity supporting US futures and ultimately pushing the S&P/ASX 200 (ASX: XJO) up another 0.3%.
Despite the positive day, seven of the 11 major sectors were down with cyclical companies in property and the banking sector the hardest hit.
ANZ Banking Group (ASX: ANZ) fell 2.2% and Vicinity Centres (ASX: VCX) dropped 1.9% as a falling bond yield is expected to crimp their profit margins and rent increases.
Fund managers were also on the nose with Janus Henderson Group CDI (ASX: JHG) and Pendal Group Ltd (ASX: PDL) down 7% and 4%, respectively.
Economy bouncing back
The news came with a positive backdrop on the economy, with GDP growth reaching 3.4% and bringing Australia back where it was before the pandemic; a stunning result given immigration is all but gone.
Household spending was the primary driver, up 6.3% as Victoria and NSW were released from Delta lockdowns, offsetting a weakening in property and private investment. Even a 28% fall in the value of iron ore exports wasn’t enough to slow the positive result, with a 39% jump in coal offsetting the decline.
Lithium hopeful jumps on Tesla deal
Lithium hopeful Core Lithium Ltd (ASX: CXO) gained 15.2% after announcing that Tesla (NASDAQ: TSLA) had entered a contract to deliver 110,000 tonnes of concentrate at market prices beginning in 2023.
Sigma upgrades on COVID tests
Sigma Healthcare Ltd (ASX: SIG) gained 2% after the company upgraded earnings guidance, confirming that profits would be 10-15% better than last year, an improvement on its announcement in December that it would be falling by 10% for the financial year. The improved performance was put down to the massive demand for Rapid Antigen Tests in 2022.
Telix cancels capital raise
Telix Pharmaceuticals Ltd (ASX: TLX) has pulled its $175 million capital raise via a Share Purchase Plan after the share price tanked in the January sell-off.
After raising capital from institutions at $7.70 per share, it was retail investors’ turns to provide the company with fresh equity. Yet with the Telix share price having fallen to $5.16 today, there was no benefit at all in buying new equity at a premium to market, hence the forced cancellation of the offer.
ASX 200 today
Looking ahead, the ASX 200 is set to open higher this morning after all three US benchmarks delivered more than 1% gains overnight. To find out more, check out my US stock market report.
