Daily Market Reports | Jan 22 2020
News of the coronavirus speading inside China and elsewhere, including into Australia, unsettled financial markets overnight.
World 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% |
DAX30 | 13555.87 | + 6.93 | 0.05% |
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.
Markets
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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