AU Morning Wrap: Goldman updates ASX lithium stock ratings; Downer plunges 28%

• Recession fears push S&P 500 lower, travel stocks tumble

• ASX down 0.2 per cent in the opening skirmishes

• Stocks to watch: Downer EDI, Allkem, Air New Zealand
- Moomoo News AU

Wall Street Summary
US stocks struggled for direction as the danger of a hard landing next year kept buying interest in check. Several business chiefs this week warned that the Federal Reserve's aggressive rate hikes risk tipping the economy into recession.

Gold miners are some of the best performers as investors ponder falling risk-free yields on sovereign paper and the outlook for 2023.

Downer EDI is 28 per cent lower after it stunned shareholders with a profit downgrade and warning over accounting irregularities. While Link is down 8.3 per cent after it rejected a takeover bid for one of its operating units.

Lithium miner Allkem is up 0.5 per cent on a positive rating from Goldman Sachs, with Core Lithium down 2.3 per cent after Goldman suggested it was a sell.

"The latest form of the conditional non-binding proposal from D&D involved a material portion of the consideration being deferred and payable after a two-year period. D&D also proposed a change in the
businesses being acquired," Link said in a statement to the market.

Link also reaffirmed its outlook for financial 2023 including low-single digit revenue growth, with operating EBITDA up 10 per cent to 12 per cent.

The airline expects earnings before other significant items and taxation for H1 FY 2023 between $NZ295 million and $NZ325 million. This compares to the prior guidance between $NZ200 million and $NZ275 million for the half year.

The group flagged falling fuel prices as adding $NZ20 million upside to the guidance range.

The group also lifted guidance for the average farmgate milk price it expects to receive over financial 2023.

Dividends Paid: None

Commodities
• Iron ore futures rose 0.66% to US$106.5 a tonne.

Prices fell 2.3% on Wednesday.

"A broad-based downturn by region in November brought overall business conditions at global steel users to their worst since May 2020." - S&P Global Platts

• Oil prices continue to tumble as recession fears outweigh the prospect of China reopening.

WTI is down 4.7% year-to-date and Brent crude 1.95%.

"The latest EIA crude oil inventory report showed inventories dropped less than expected and exports tumbled ... This report shows the economy is clearly weakening and does not give energy bulls any reasons to buy into this weakness." - Oanda senior market analyst, Ed Moya

• Gold rallied as the US dollar softened and bond yields tumbled.

"Non-interest-bearing gold will continue to thrive if Treasury yields continue to slide. This is a good environment for gold as safe-haven flows seem like they will be the theme of the new year." - Moya