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Overnight, US inflation hit a 40-year high, solidifying a huge rise in another interest rate hike. However, surprisingly, the markets rallied to recover the losses.

In Australia, the rise in the price of oil caused the energy sector to soar. Up 3.43 per cent at noon.

Barrenjoey also upgraded their Qantas (ASX:QAN) valuation, after the company announced that they will make better than expected earnings this year. Based on forward bookings, and current fuel prices, the company expects profits to be between $1.2 billion and $1.3 billion for the first half of FY 2023.

Overall, the S&P/ASX 200 is 1.72 per cent or 114.50 points higher at 6757.10.

The SPI futures are pointing to a rise of 116 points.

The best-performing sector is Energy, up 3.43 per cent. The sector with the fewest gains is Materials, up 1.27 per cent.

The best-performing stock in the S&P/ASX 200 is Virgin Money UK (ASX:VUK) , trading 10.24 per cent higher at $2.31. It is followed by shares in Domino Pizza Enterprises (ASX:DMP) and Cochlear (ASX:COH) .

The worst-performing stock in the S&P/ASX 200 is Harvey Norman Holdings (ASX:HVN) , trading 3.61 per cent lower at $4.00. It is followed by shares in Ramelius Resources (ASX:RMS) and Pilbara Minerals (ASX:PLS) .

Today, shares in the Asia-Pacific have jumped so far, taking the lead from Wall Street overnight as investors shook off a strong inflation report. The Nikkei 225 in Japan is 2.37 per cent higher in early trade, while the Topix has gained 1.74 per cent. Japan’s yen has plunged to its lowest levels against the U.S. dollar since 1990 overnight before paring losses, and still trading at 147-levels. South Korea’s Kospi has advanced to 1.74 per cent and the Kosdaq climbed 2.53 per cent. China will be reporting inflation and trade data later Friday. Singapore’s GDP grew 4.4 per cent in the third quarter and is expected to further tighten its monetary policy.

September CPI hotter than expected

Headline September CPI up 0.4 per cent month on month is hotter than consensus for 0.2 per cent and highest since June. Core CPI (ex-food and energy) of 0.6 per cent is also higher than 0.4 per cent consensus, while annualised core of 6.6 per cent is also a bit hotter than 6.5 per cent estimates. Energy prices dropped 2.1 per cent in September, a shallower decline than the August 5.0 per cent. Services continued to add upward pressure. Shelter index held at 0.7 per cent m/m (6.6 per cent y/y), with owners’ equivalent rent up 0.7 per cent m/m, highest since Jun-90, while annualised growth of 6.7 per cent is the highest on record. Medical care services up 1.0 per cent m/m, which is the largest since Feb-1984. Used cars have a bigger drag, falling by 1.1 per cent. Print steepened Fed rate path expectations, with market now pricing in near 100 per cent chance of 75 bp hike in November, while peak fed funds rate up 25 bp to 4.75-5.0 per cent by Feb-23. Elsewhere, initial jobless claims rose 9K m/m to 228K vs 225K consensus. Continuing claims of 1.368M up 3K w/w though below 1.380M consensus.

Banks kick off earnings season on Friday

Big day of bank earnings on Friday with JPMorgan, Citi, Morgan Stanley, Wells Fargo and US Bancorp all reporting. Q3 results are expected to feature meaningful NIM expansion and higher NIIon the back of the higher rate environment. Loan growth is expected to be solid but not as robust as seen in Q2. IB is a widely discussed weak spot across the board with big declines in fees and volumes. However, trading is expected to be cushioned by volatility, particularly in terms of FICC. Fee revenue expected to be hit on multiple fronts, with mortgage banking a key area of scrutiny. Buybacks are less of a tailwind with regulatory constraints. Asset quality remains elevated on the back of strong consumer and corporate balance sheets. However, previews also flagged an outsized interest in capital build commentary given the expected normalisation in credit trends and heightened macro headwinds from the tightening of financial conditions.

Market rebound drives all sectors higher

All sectors were higher in a session that saw the S&P rise by ~5 per cent after hitting a fresh YTD low not long after the opening bell. Integrateds, refiners, E&Ps, and oil services names were all higher alongside crude. Banks were broadly higher ahead of tomorrow’s start to earnings season (JP Morgan, Citi Group, Wells Fargo & Co, and Morgan Stanley among Friday’s premarket reporters). Asset managers outperform as well. BlackRock Inc. was up after its report. Insurers were better despite Progressive Corp’’s release flagging Hurricane Ian losses. Dominos was a standout in restaurants with strong comps. Airlines boosted by robust Delta Airlines guidance. Semis were higher, paring sharp WTD losses after US tech-export restriction headlines. Very few groups are on the downside. Precious-metals miners followed gold lower.

Recharge Metals Limited (ASX:REC) announced an update on the Company’s diamond drilling activities at the Brady Hill South Project located within the Archarean Gullewa Greenstone Belt in Western Australia. Some key highlights were that both drill holes intersected zones of massive sulphides and that the first diamond drill holes west of the Salt Creek Shear show significant sulphide mineralisation. In response to the next step, Managing Director Brett Wallace stated, “we now look forward to completing three further diamond holes testing the remaining DHTEM conductor and receiving the assay results from the eight pre-collar holes.” Shares are trading 35.5 per cent higher at 21 cents.

Bulletin Resources (ASX:BNR) announced that they confirmed the Mt Farmer tenement application, which hosts the Aldoro Resources (ASX:ARN) Niobe project. Bulletin’s application has along strike potential from Aldoro’s project. The Company will update shareholders once the tenement application is granted. They remain well funded, and will commence on ground exploration works as soon as possible. Shares are trading 8.3 per cent higher at 13 cents.

Today, Ragusa Minerals Ltd (ASX:RAS) announced that it received a notification from the Northern Territory’s Mineral Titles office that the Company’s 100 per cent owned lithium project tenement had been granted. The tenement comprises 28 blocks and was granted on the 11th of october this year for a period of 6 years. In response, the chair, Jerko Zuvela stated, “This is another positive milestone that puts Ragusa in a strong position to rapidly accelerate the development of our project within a proven high-quality lithium district.” Shares are trading over 7 per cent higher at 30 cents.

Gold is trading at US$1663.26 an ounce. Iron ore is 2.4 per cent lower at US$94.20 a tonne. Iron ore futures are pointing to a fall of 1.4 per cent. One Australian dollar is buying 63.04 US cents.

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This report looks at the results of a collaborative study Antisense undertook which looked at the largest protein expression database in Long COVID-19 patients who experienced neurologic symptoms well after the primary or acute SARS-CoV-2 infection was considered over (Groups 1 & 2, with 48 subjects Group 2 comprising a single patient from a different clinical site). The symptoms and others experienced by such patients result in a highly significant amount of illness, possibly more than all primary SARS-CoV-2 infections i.e COVID-19.

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Kazia Therapeutics (KZA) announced yesterday morning that paxalisib did not meet the threshold to move into stage 2 of the GBM AGILE clinical trial (NCT03970447). The study was an adaptive trial designed to assess the potential of new therapeutics to treat the highly aggressive brain cancer glioblastoma (GBM) in a cost-effective manner. Demonstrating efficacy in GBM is an extremely high hurdle as shown by the fact that there is only one approved drug for the disease, temozolomide, and it is only effective in 1/3 of patients.

Given the high nature of the hurdle, in our original initiating coverage report on KZA, we only gave paxalisib a small chance of returning a positive result from the overall study. That is the nature of drug development with one group estimating only 6% to 7% of new chemical entities that commence clinical trials reach launch (Dowden & Munro (2019) Nat Rev Drug Discov). The small percentage that do make it to launch, however, more than make up for the cash spent on those that don’t.

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Terracom will report their FY2022 results in September 2022. In the last two months there have been a number of company announcements that have given us improved visibility on our earnings forecasts and valuation metrics so we have taken this opportunity to update our numbers.

With the combination of geopolitical factors in the northern hemisphere as well as disruption from other supply regions, we believe the visibility on export coal prices over the next 12 months has also improved since our March note.

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Lake Resources (LKE. ASX) – LKE has signed two non-binding MOU’s in the space of 10 days. Ford Company (Ford) has signed an MOU for ~25,000t/year and last week Hanwa, a Japanese commodity trader signed a MOU for up to 25,000t/year. Subject to execution, this is an amazing feat as Ford and Hanwa are prepared to enter into longer-term strategic partnerships with LKE. Commercial negotiations are still ongoing but are expected, especially if Ford & Hanwa inject new equity into LKE, to further de-risk the project financing & thus ensure LKE and Kachi are fully funded.

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TNG Ltd is an ASX-listed technology owner and developer of the world-class Mount Peake near-surface vanadiferous titanomagnetite deposit. To unlock value, TNG will concentrate ore from its central Northern Territory mine for processing through its patented TIVAN® process produce three premium quality revenue streams: hi-purity vanadium pentoxide (V2O5) for steel alloys and Vanadium Redox Flow batteries, a quality titanium pigment for paints and a premium steel input with >64%Fe iron ore fines.

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Two recent gravity surveys have considerably exceeded expectations and revealed potential for extensions to the existing MRE at Lake Throssell, plus a material growth opportunity at Lake Yeo. This reinforces the potential for a multi-decade, Tier-1 SOP production hub based around Lake Throssell.

TMG is currently completing work towards the PFS due early 2023, including drilling to start in Q3 2022, evaporation trials and permitting activities. Results from these programs will support the PFS and any future resource upgrade.

Benchmark SOP prices have risen to ~US$940/t due to recent geopolitical developments. The Oct 2021 Scoping Study assumed a SOP price of US$550/t and contained a sensitivity analysis showing every 10% increase in price drives a +$144m increase in the project NPV of $364m. The c.70% increase above the Scoping Study thus implies a project NPV of ~$1.4bn.

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Despite the lower realised oil and gas price, which fell by 5.4% and 19.7% respectively in August, Calima managed to show improvement in its key business metrics.

We expect higher production in November due to the contribution by the new Thorsby wells which will be drilled in August/September which will see Calima meet its 2021 production guidance of 4,500 boe/d.

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WT Financial Group Limited (WTL) is a growing diversified financial services company, founded in 2010 and listed on the Australian Stock Exchange (ASX) in 2015. Its advice and product offerings are delivered primarily through a group of independent financial advisers operating as authorised representatives of WTL under its Wealth Today Pty Ltd (Wealth Today) and Sentry Group Pty Ltd (Sentry Group) dealer group operations. It has around 275 advisers across more than 200 financial advice practices Australia-wide. It also operates a direct-to-consumer operation under its Spring Financial Group brand.

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In May 2021, Corporate Connect analyst Marc Sinatra published a comprehensive research report on ASX-listed biotech Immutep Ltd (ASX: IMM). So impressed was he with IMM that Corporate Connect felt it imperative that a follow-up report be released placing a valuation on the company, because the market was not seeing the vast potential of eftilagimod alpha (efti).

This follow-up report has been released today. Using comparables, after adding cash back to their EV estimate and dividing by the total number of issued shares, Corporate Connect now places the fair value of an Immutep share at $A2.20.

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Phillips 66 (PSX) has entered into an agreement with NVX to acquire 77.9m new shares for US$150m (A$203m). PSX is the worlds largest producer of speciality petroleum coke a precursor for battery grade synthetic graphite anode materials found with an Enterprise Value of US$47.5Bn and assets of US$57Bn.

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PayGroup (PYG) delivers multi-country BPO services and cloud SaaS HCM solutions, assisting companies to manage employees in multiple, complex jurisdictions. The company has many growth opportunities, including new clients, new jurisdictions, new products, partner expansion, and new revenue sources. PYG’s scalable business model allows operating leverage and with savings from in-housing third party technology, support margin expansion.

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OpenLearning (OLL) is a higher education technology company that operates a scalable online learning platform through a software-as-a-service (SaaS) business model and provides a global marketplace of high quality courses for learners of all levels. Its primary customers are education providers based in Australia and South-East Asia (primarily Malaysia). OLL started operations in Australia in 2012 and expanded to Malaysia in 2015, Singapore in 2018, and recently also Indonesia.

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