Daily Market Reports | Dec 14 2018
|SPI Overnight (Dec)||5638.00||– 10.00||– 0.18%|
|S&P ASX 200||5661.60||+ 8.10||0.14%|
|S&P500||2650.54||– 0.53||– 0.02%|
|Nasdaq Comp||7070.33||– 27.98||– 0.39%|
|S&P500 VIX||20.65||– 0.81||– 3.77%|
|US 10-year yield||2.91||+ 0.01||0.17%|
|USD Index||97.07||+ 0.08||0.08%|
|FTSE100||6877.50||– 2.69||– 0.04%|
|DAX30||10924.70||– 4.73||– 0.04%|
By Greg Peel
Dismissing a very early down -20 points and up 20 points in the first computer-driven twenty minutes of trade yesterday, the ASX200 otherwise displayed a distinct lack of volatility in the current context. The index rose steadily to lunchtime before fading away in the afternoon.
We continue to hold above the 5650 level, despite everything and anything dominating the global news feed. We began yesterday with Theresa May’s “victory”, which was far from convincing and has achieved nothing in terms of Brexit progress, and we heard heated yet vague accusations being thrown by the president’s former lawyer.
Where those accusations get us is anyone’s guess. One gets the feeling the noose is closing, but Wall Street no longer pays that much attention given it is clear anything that will transpire will yet take a very long time.
So yesterday’s session saw more of a focus on the local micro.
The banks continued their climb back from Monday’s big drop yesterday, rising 0.5%.
Materials rose 1.1% on the back of a 1.9% gain for BHP Group ((BHP)). The company has received approval for a $550m gas field development in the Bass Strait.
Not achieving approval is the merger between TPG Telecom ((TPM)) and Vodafone ((HTA)), given the ACCC has expressed concerns about what was going to be four mobile providers now becoming three. Until TPG decided to enter the mobile game three were only three anyway, so I’m not sure how that works.
TPG fell -16.7%, bearing in mind that both stocks flew to the moon when a merger deal was first touted. Telstra ((TLS)) is dealing with its own ACCC issues, and the telcos sector was the biggest drag yesterday in falling -2.4%.
Is it just me or is the ACCC suddenly very active post the banking RC?
Nine Entertainment ((NEC)) has had an up and down week while trading for the first time as a merged entity. The market did not like the company’s plan to buy out the rest of Macquarie Radio, which basically means taking out Singo, but did like that other assets will be divested that do not focus on national advertising, mass audiences and digital subscriptions.
Another kick in the guts for The Bush.
Nine rose 8.3% yesterday. Other than a couple of stocks that fly around like blow flies over a Christmas turkey – Syrah Resources and more lately, Emeco – IOOF Holdings ((IFL)) featured in the top five winners yesterday. The stock is on a comeback trail and yesterday rose 7.3%. A very, very long comeback trail.
While the energy sector was flat yesterday, AGL Energy ((AGL)) again dragged down utilities (-1.7%). Whatever Australia’s energy policy is going to be, and that may depend on who is prime minister this week, it never seems to favour the distributors.
We begin today’s session with Wall Street largely flat and our futures down -10. Today is effectively the last Friday before Christmas, because this time next week the market will be rapidly turning into a ghost town if it hasn’t already. So today it’s Christmas lunches and tonight Christmas parties so unless anything comes out of the blue, we might actually be in for a quiet session.
The Dow was up a couple of hundred points up early in last night’s session before tracing out a sawtooth pattern towards a less emphatic close.
The two factors Wall Street is trying to hang onto at present are trade talks that will actually come to something, and a Fed who will actually be a little less hawkish in 2019. Otherwise the market remains sufficiently skittish that sell first, ask questions later, remains the tone.
In the former case, sentiment is clouded by the Huawei issue, and a second Canadian national being detained in China for reasons unknown only adds to the angst on that front. The latter is further complicated by Trump again tweeting his discontent with the Fed and urging it not to raise rates, which means next week’s hike has to be a given lest the Fed appear not to be independent.
Then there’s Cohen’s little rant about Trump, and an agreement, apparently, by the National Enquirer to hand all the dirt it has on Trump over to prosecutors.
And there’s Brexit.
Stock markets used to be a lot more simple once upon a time.
Again we can only suggest that recent Wall Street action is typical of a bottoming pattern, although Santa just can’t seem to stop the sleigh from stalling. There’s too much going on.
Today sees China releasing monthly industrial production, retail sales and fixed asset investment numbers, followed in the US tonight by industrial production and retail sales numbers. In the current context, the wrap up of all this data may provide Wall Street with something to respond to.
Otherwise it seems to be more of a waiting game right now. Waiting to see what the hell might happen next.
|Spot Metals,Minerals & Energy Futures|
|Gold (oz)||1242.30||– 3.00||– 0.24%|
|Copper (lb)||2.81||+ 0.02||0.81%|
|Aluminium (lb)||0.88||– 0.00||– 0.23%|
|Lead (lb)||0.89||– 0.00||– 0.44%|
|Nickel (lb)||4.88||+ 0.02||0.48%|
|Zinc (lb)||1.21||+ 0.00||0.08%|
|West Texas Crude (Jan)||52.53||+ 1.41||2.76%|
|Brent Crude (Feb)||61.50||+ 1.39||2.31%|
|Iron Ore (t) futures||68.20||+ 1.05||1.56%|
Oil prices popped last night because the Saudis have come up with a cunning plan.
There’s no escaping that WTI is the world’s global benchmark price, and that the US producers are pumping with gay abandon while OPEC-Russia implement production cuts to try to keep the price up. So, in line with production cuts, cut exports to the US to counter growing stockpiles which are the determinant of the WTI price.
Brilliant. The oils jumped 2.5%.
It was another sleepy session on the LME, but iron ore seems to be climbing back steadily.
There was little movement in either dollar last night. The Aussie is at US$0.7228.
The SPI Overnight closed down -10 points.
Today and tonight bring aforementioned Chinese and US data.
S&P/ASX will today announce quarterly promotions/relegations in their suite of local indices which will become effective in a week’s time.
The Australian share market over the past thirty days…
|BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS|
|ABC||ADELAIDE BRIGHTON||Upgrade to Neutral from Sell||Citi|
|Upgrade to Outperform from Neutral||Credit Suisse|
|BEN||BENDIGO AND ADELAIDE BANK||Downgrade to Sell from Hold||Deutsche Bank|
|BPT||BEACH ENERGY||Upgrade to Neutral from Sell||Citi|
|EVN||EVOLUTION MINING||Downgrade to Underperform from Neutral||Credit Suisse|
|ING||INGHAMS GROUP||Upgrade to Equal-weight from Underweight||Morgan Stanley|
|QBE||QBE INSURANCE||Upgrade to Add from Hold||Morgans|
|SBM||ST BARBARA||Downgrade to Underperform from Neutral||Credit Suisse|
|SHL||SONIC HEALTHCARE||Upgrade to Buy from Neutral||Citi|
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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