US stocks fall on PPI data, lithium deal affects ASX’s Sayona Mining

 

Stocks fell Thursday after another hot inflation report, and a decline in jobless claims, showed the economy is holding up amid the Federal Reserve’s rate hikes.

The producer price index, an inflation indicator that tracks wholesale prices, rose 0.7 per cent in January, topping a Dow Jones consensus forecast for a 0.4 per cent increase.

The new data comes after January’s consumer price index and retail sales report were both higher than expected. Both inflation readings this week point to the stickiness of inflation and that the fight against inflation will continue.

The Dow Jones Industrial Average shed 431 points, or 1.26 per cent. The S&P 500 dipped 1.38 per cent and the Nasdaq-Composite fell 1.78 per cent. Microsoft and Disney contributed the most to the Dow’s decline, down more than 2 per cent each.

Investors will also continue watching company earnings for signs about the strength of the consumer. DropBox, DoorDash and DraftKings are all scheduled to report Thursday after the bell.

TravelCenters of America Inc. (TA), which runs travel centres under several brands, has llagreed to be acquired by BP, for $86.00 per share in cash, which is an 84 per cent premium to the average trading price over the past 30 days, and a total equity value of around $1.3 billion.

Piedmont Lithium and LG Chem have signed an equity investment and binding offtake agreements with implications for ASX listed Sayona (ASX:SYA). Piedmont has signed agreements with LG Chem for a $75M equity investment and a commitment to offtake 200,000 metric tons of spodumene concentrate over 4 years. LG Chem will purchase 1.1M newly-issued shares of Piedmont common stock, resulting in approximately 5.7 per cent ownership. Piedmont will provide LG Chem with SC6 and priority negotiation rights for lithium hydroxide, and use the funding to advance various projects.

Piedmont has a 19.99 per cent stake in ASX-listed lithium miner, Sayona Mining, so it Looks like Sayona and PLL will sell lithium concentrate to South Korea’s LG Chem with the suggestion that LG will produce the LiOH themselves for 4 years then SYA will have their refinery finished then they will most likely buy LiOH from SYA. Piedmont shares are up 70 per cent year todate

Sectors

All S&P 500 sectors closed lower overnight. Consumer Staples and Utilities were the best performers, whilst Consumer Discretionary was the biggest laggard,
 
Futures

The SPI futures are pointing to a 0.3 per cent fall.

Currency

One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 68.77 US cents (Thu: 69.07 US cents).

Commodities

Iron ore futures are pointing to a 1.31 per cent gain. Iron ore is 0.9 per cent higher at US$124.75 tonne.

Gold added 0.1 per cent. Silver rose 0.04 per cent. Copper gained 2.3 per cent and oil lost 0.7 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 0.2 per cent, Frankfurt also added 0.2 per cent while Paris closed 0.9 per cent higher.

In Asian markets, Tokyo’s Nikkei gained 0.7 per cent, Hong Kong’s Hang Seng rose 0.8 per cent while China’s Shanghai Composite closed almost 1 per cent lower.

Yesterday, the Australian sharemarket closed 0.8 per cent higher at 7,410.

Ex-dividends

Argo Investments (ASX:ARG) is paying 16.5 cents fully franked
Kelly Partners Group (ASX:KPG) is paying 0.3993 cents fully franked
Lendlease Group (ASX:LLC) is paying 4.9 cents unfranked

Dividends payable

Euroz Hartleys Group (ASX:EZL)
Cromwell Property Group (ASX:CMW)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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