Weekly| CPI Rose To a New High and Implied More Rate Hikes

As of the close on Friday,$S&P/ASX 200(XJO.AU)$ closed at 7,493.80 points, up 0.79% in the past 5 days.

During the last 5 trading days, $Liontown Resources Ltd(LTR.AU)$ $KAROON ENERGY LTD(KAR.AU)$ $Monadelphous(MND.AU)$ $Block Inc(SQ2.AU)$ $ARB Corp(ARB.AU)$ were up 17.82% 12.04% 9.94% 9.87%, and 9.83% respectively.

Key Event Last Week - CPI

CPI rose to a new high and signaled another rate hike.

The Australian Bureau of Statistics released data on Wednesday showing

Australia's annual inflation growth rate climbed to 7.8% from 7.3%, higher than market expectation of 7.5%.

It recorded the highest level since 1990 and soared to a 33-year high.

This also means that the RBA will go ahead and raise interest rates for the ninth time next week. This will bring the cash rate to a possible 3.35%.

The RBA may continue to raise rates for longer in the future, and the March rate hike could be even more aggressive. Australia's cash rate may even reach an all-time peak of 3.85% in the last decade or so in May.

1. $Liontown Resources Ltd(LTR.AU)$ - Chairman's buying and project update

Liontown Resources Limited engages in the exploration, evaluation, and development of mineral properties in Australia. The company explores for lithium, gold, vanadium, copper, and nickel deposits, as well as platinum group elements.

 

Liontown chair Tim Goyder has picked up an extra $1.5 million worth of Liontown shares in on-market trades.

Another price-sensitive update was about Liontown’s Kathleen Valley Lithium Project in Western Australia.

The update revealed that construction is going to cost more than previous estimates. This is partly because the company has optimised the plant capacity design to increase the initial throughput rate by 20% to 3Mtpa.

In its announcement, the company said this would enable it “to take advantage of strong short and medium-term forecast lithium pricing”.

The project remains on track for its first production in mid-2024.

2. $KAROON ENERGY LTD(KAR.AU)$ - revealed more reserves at BM-S-40

Karoon Energy Ltd operates as an oil and gas exploration and production company in Australia and Brazil.

Karoon increased its proved reserves estimate at BM-S-40 by 17 per cent to 42.8 million barrels, while its proved, probable and possible reserves estimate was also increased by 7 per cent to 65.5 million barrels.

The material increase in Baúna reserves followed the extensive reprocessing of seismic, reservoir modelling and dynamic simulation work.

The expectation of extended field life brings greater longevity to Karoon’s existing production base that should bring further opportunities to maximize asset value.

3. $Block Inc(SQ2.AU)$ - higher possible cash rate

Block, Inc., together with its subsidiaries, creates tools that enables sellers to accept card payments and provides reporting and analytics, and next-day settlement.

Block's trend may correlate with CPI and a prospect of more rate hikes last week. In addition, several insititutions gave positive ratings on the company in Dec. and Nov.

Block has earned an average recommendation of "Moderate Buy" from the forty-two analysts that are presently covering the firm

Piper Sandler restated an "overweight" rating and set a $93.00 price target on shares of Block in a research report on December 13th.

Royal Bank of Canada decreased their price target on shares of Block from $95.00 to $93.00 and set an "outperform" rating for the company in a report on November 4th.

4.$Monadelphous(MND.AU)$$ARB Corp(ARB.AU)$ - no price-sensitive news available

Monadelphous Group Limited, an engineering group, provides construction, maintenance, and industrial services to resources, energy, and infrastructure industries. It operates through Engineering Construction, and Maintenance and Industrial Services divisions.

 

ARB Corporation Limited engages in the design, manufacture, distribution, and sale of motor vehicle accessories and light metal engineering works.

# ASX Stocks Opportunities

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