Daily Market Reports | Jan 22 2020
News of the coronavirus speading inside China and elsewhere, including into Australia, unsettled financial markets overnight.
|SPI Overnight (Mar)||7020.00||+ 12.00||0.17%|
|S&P ASX 200||7066.30||– 13.20||– 0.19%|
|S&P500||3320.79||– 8.83||– 0.27%|
|Nasdaq Comp||9370.81||– 18.14||– 0.19%|
|DJIA||29196.04||– 152.06||– 0.52%|
|S&P500 VIX||12.92||+ 0.82||6.78%|
|US 10-year yield||1.77||– 0.07||– 3.65%|
|USD Index||97.56||+ 0.13||0.13%|
|FTSE100||7610.70||– 40.74||– 0.53%|
Greg Peel will resume writing the Overnight Report after Australia Day (next week). In the meantime, Jessica Amir from Bell Direct is providing a snapshot of insights and developments from overseas markets overnight.
By Jessica Amir, Bell Direct
The Australian share market is eyeing a cautious start to Wednesday’s session, after US stocks retreated from record levels ending their six day winning streaks, on news that the deadly coronavirus, which has killed 6 people in China, has spread to the US, Thailand, South Korea, Japan and Taiwan.
Shares in casino and hotel companies fell sharply with the likes of Las Vegas Sands falling -5% and Wynn Resorts down -6%, on fears that the outbreak would dent China international travel numbers. Airline stocks also fell on the news, with United Airlines and Delta Air down -5%, along Boeing (but Boeing had issues of its own with 737 Max regulator delays).
Meantime, it was the first day of trade for the US after a long weekend (to celebrate Martin Luther Jr Day) and investors reacted to the IMF downgrading global growth by -0.1% to 3.3% in 2020, largely as India’s economy slows (India’s expected growth dropped by -1.2% (to 5.8%)).
Even though global growth forecasts ticked higher than last year’s 2.9% recorded growth, the IMF's chief economist Gita Gopinath said the projected recovery in global growth remains uncertain. The IMF said as the US-China trade deal was inked, trade and manufacturing activity could soon bottom out.
On Wall Street, with investors locking in profits, the Dow Jones lost -0.5%/152 points, S&P500 slipped -0.3% and Nasdaq lost -0.2%. The market has already carried momentum from 2019 to this year, with the S&P500 up around 3%, following the 28% lift last year. This was its biggest annual gain since 2013.
European markets were also mostly lower on China virus concerns. The Stoxx 600 lost -0.14%, the CAC lost -0.5%, while the German DAX rose 0.1%
In Asia, stocks in Hong Kong led markets lowers after Moody’s cut its rating for the city to Aa2 from Aa3. While in Japan, the BOJ's short-term policy rate remained on hold at -0.1%, also keeping its 10-year bond yield target at 0%, largely in line with forecasts. Japan’s Nikkei ended -0.9% lower, Hong Kong’s Heng Seng lost -2.8%, and China’s Shanghai Comp lost -1.4%.
The Aussie share market futures are suggesting a 0.1%/9 point gain. Yesterday we saw the benchmark index, ASX200 lost -0.2% or 13 points, ending the five-day winning streak before closing at 7,066 points, and almost wiping out Monday’s gains. Year to date, the market is up 5.7%.
Gold shed -1% falling to US$1,557 an ounce, as investors booked profits as the commodity hit a two-week high ($1,568) earlier on news of the virus outbreak.
Oil fell -0.3% to US$58.25 a barrel, with Libyan exports remaining halted as the nation’s crude remains under military force. The IMF maintained its 2020 forecast for WTI Crude of US$57 and Brent at US$62.
Iron ore last traded at US$94.81 a tonne, holding onto that weekly 1.3% gain.
Australian dollar trading at a weekly low of 68.73 US cents.
|Spot Metals,Minerals & Energy Futures|
|Gold (oz)||1557.50||– 2.90||– 0.19%|
|Silver (oz)||17.77||– 0.26||– 1.44%|
|Copper (lb)||2.79||– 0.05||– 1.90%|
|Aluminium (lb)||0.82||+ 0.00||0.15%|
|Lead (lb)||0.89||– 0.01||– 0.96%|
|Nickel (lb)||6.16||– 0.15||– 2.44%|
|Zinc (lb)||1.12||+ 0.00||0.06%|
|West Texas Crude||58.34||– 0.32||– 0.55%|
|Brent Crude||64.47||– 0.72||– 1.10%|
|Iron Ore (t) futures||95.85||0.00||0.00%|
The Australian share market over the past thirty days…
|BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS|
|DXS||DEXUS PROPERTY||Upgrade to Buy from Neutral||UBS|
|IFN||INFIGEN ENERGY||Upgrade to Add from Hold||Morgans|
|MFG||MAGELLAN FINANCIAL GROUP||Downgrade to Underperform from Neutral||Macquarie|
|MGR||MIRVAC||Upgrade to Neutral from Sell||UBS|
|MP1||MEGAPORT||Downgrade to Hold from Accumulate||Ord Minnett|
|Downgrade to Neutral from Buy||UBS|
|MTS||METCASH||Upgrade to Neutral from Underperform||Macquarie|
|NHF||NIB HOLDINGS||Upgrade to Neutral from Sell||Citi|
|Upgrade to Neutral from Sell||UBS|
|NUF||NUFARM||Downgrade to Neutral from Outperform||Macquarie|
|ORG||ORIGIN ENERGY||Downgrade to Hold from Add||Morgans|
|PRU||PERSEUS MINING||Upgrade to Outperform from Neutral||Macquarie|
|Downgrade to Underperform from Outperform||Credit Suisse|
|PTM||PLATINUM||Downgrade to Underperform from Neutral||Macquarie|
|QAN||QANTAS AIRWAYS||Downgrade to Neutral from Buy||Citi|
|RIO||RIO TINTO||Downgrade to Accumulate from Buy||Ord Minnett|
|SCG||SCENTRE GROUP||Downgrade to Sell from Neutral||UBS|
|SYD||SYDNEY AIRPORT||Downgrade to Neutral from Outperform||Macquarie|
|WHC||WHITEHAVEN COAL||Upgrade to Hold from Lighten||Ord Minnett|
|WOW||WOOLWORTHS||Upgrade to Outperform from Neutral||Macquarie|
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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