Daily Market Reports | Mar 15 2019
|SPI Overnight (Mar)||6203.00||+ 16.00||0.26%|
|S&P ASX 200||6179.60||+ 18.40||0.30%|
|S&P500||2808.48||– 2.44||– 0.09%|
|Nasdaq Comp||7630.91||– 12.50||– 0.16%|
|S&P500 VIX||13.50||+ 0.09||0.67%|
|US 10-year yield||2.63||+ 0.02||0.73%|
|USD Index||96.79||+ 0.32||0.33%|
By Greg Peel
The ASX200 is currently doing a lot of bouncing around without actually getting anywhere. As of yesterday’s close the index is right where it was in the thick of last month’s result season, so no joy there.
Yesterday was another session featuring intraday volatility. The index was up 20 points ahead of the Chinese data dump and down -8 points an hour later, only to finish with a flurry to be up 18.
Chinese industrial production was the stumbling block, rising only 5.3% year on year in the period January-February (aggregated due to Lunar New Year disruption), down from 5.7% in December and missing 5.5% forecasts. It was the worst start to a year since 2009.
Retail sales rose 8.2% in the period, as they had done in December and in line with expectation, but that’s the slowest pace of growth since 2012. Fixed asset investment was stable at 6.1%.
Unemployment is on the rise in China, up to 5.3% from 4.9% in December.
But if the data were seen as disappointing downunder, that disappointment didn’t last long. The materials sector rose 0.7% on the day and energy bounced back 1.4% on the oil price.
The banks closed down only slightly, giving up gains after Commonwealth Bank ((CBA)) announced it will put its wealth management and mortgage broking demerger plans on hold while it concentrates on cleaning up its act, as required in the wake of the RC. CBA has only spent $650m on progressing the demerger to date.
Kogan ((KGN)) yesterday launched its new online retail platform Marketplace, somewhat Amazonian in nature. Kogan shares jumped 8.1% on the news but consumer discretionary as a sector fell -0.4%. Another nail in the brick & mortar coffin?
In terms of ASX200 leaders, short-covering was the theme of the day. From graphite to rare earths to milk and rubbish, the top four gainers of Syrah Resources ((SYR)), Bellamy’s ((BAL)), Lynas Corp ((LYC)) and Bingo Industries ((BIN)) were, as of last week, 17%, 10%, 7% and 6% shorted respectively.
Gains ranged from 5.2% for Bingo to 8.5% for Syrah, while the losers board was topped by G8 Education ((GEM)), simply because it went ex.
Wall Street was flat as a tack last night yet this morning our futures are up 16 points. Another instrument bouncing up and down lately is iron ore, which is up 3.5%.
The UK parliament has voted to seek an extension from the EU to the March 29 deadline to June 30 and the suggestion is EU members may be amenable. The catch is (a) all EU members must unanimously agree and (b) the UK has to have another Brexit deal ready, and agreed upon, by March 20.
That’s less than a week. What does anyone believe May can do such that Attempt Number Three will satisfy both a parliament that is polarised and an EU that has said, over and over again, no more concessions?
Presidents Trump and Xi will no longer meet at the end of this month as was hoped. The news has come as no great shock to Wall Street.
The delay is bad news and good news – bad because Wall Street is basically just hanging around waiting for some positive announcement and is getting rather frustrated with it all, but good because a delay suggests there is indeed light at the end of the tunnel when a walk-away is still a lingering threat.
New home sales in the US fell -7% in January. Starting to look like Australia. But while January in Australia is a slow month for sales because everyone’s at the beach, last January in the US had half the country snowed in and the other half temporarily out of work.
The fall followed decent gains in the prior two months.
And that’s about it. Sometimes there’s just really not much to report.
|Spot Metals,Minerals & Energy Futures|
|Gold (oz)||1295.60||– 14.30||– 1.09%|
|Silver (oz)||15.15||– 0.28||– 1.81%|
|Copper (lb)||2.93||– 0.03||– 0.94%|
|Lead (lb)||0.95||+ 0.00||0.05%|
|Nickel (lb)||5.86||– 0.05||– 0.79%|
|Zinc (lb)||1.30||– 0.00||– 0.37%|
|West Texas Crude||58.51||+ 0.16||0.27%|
|Brent Crude||67.17||– 0.48||– 0.71%|
|Iron Ore (t) futures||87.10||+ 3.00||3.57%|
Base metals were predictably weaker on the Chinese industrial production number but no one told iron ore.
Brent crude fell for the same reason, while WTI continued higher on domestic inventory data.
The pound rose on Wednesday night when the UK voted against “no deal” but fell back again last night when seeking an extension was agreed to. The US dollar index is thus up 0.3% and gold has retreated from 1300.
The Aussie is down -0.5% at US$0.7065.
The SPI Overnight closed up 16 points or 0.3%.
The Bank of Japan holds a policy meeting today. Another retreat to renewed dovishness?
US industrial production will be in the frame tonight.
Locally, the quarterly index changes announced by S&P/ASX last week come into effect today.
The Australian share market over the past thirty days…
|BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS|
|ANZ||ANZ BANKING GROUP||Downgrade to Neutral from Outperform||Credit Suisse|
|APX||APPEN||Upgrade to Buy from Neutral||Citi|
|AST||AUSNET SERVICES||Downgrade to Hold from Add||Morgans|
|SGR||STAR ENTERTAINMENT||Upgrade to Outperform from Neutral||Credit Suisse|
|STO||SANTOS||Downgrade to Neutral from Buy||UBS|
|WPL||WOODSIDE PETROLEUM||Downgrade to Neutral from Buy||UBS|
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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