Daily Market Reports | Oct 14 2020
|SPI Overnight (Dec)||6161.00||– 42.00||– 0.68%|
|S&P ASX 200||6195.70||+ 63.70||1.04%|
|S&P500||3511.93||– 22.29||– 0.63%|
|Nasdaq Comp||11863.90||– 12.36||– 0.10%|
|DJIA||28679.81||– 157.71||– 0.55%|
|S&P500 VIX||26.07||+ 1.00||3.99%|
|US 10-year yield||0.73||– 0.05||– 6.44%|
|USD Index||93.53||+ 0.49||0.53%|
|FTSE100||5969.71||– 31.67||– 0.53%|
|DAX30||13018.99||– 119.42||– 0.91%|
By Greg Peel
AGMs make their mark
Commonwealth Bank ((CBA)) has changed its logo from the old vegemite-on-toast to cheese-on-toast. I wonder how many squillions that cost. I remember the hullaballoo when -$2m was spent on the last one – taxpayer money at the time. But the market liked it – the stock rose 1.1% yesterday. The bank sector rose 1.7%.
Admittedly there was more to CBA’s AGM than just artwork.
More emphatic was the reaction to Telstra’s ((TLS)) AGM, at which management committed to maintaining what’s left of the dividend. That was worth 4.0% for the stock and 2.2% for the telco sector.
These were two of the highlights of a session that began positively from the open yesterday on Wall Street strength. The ASX200 put on the bulk of gains in the first fifteen minutes, before wobbling its way to a slightly higher close.
Mid-session China reported shock trade numbers for September.
Exports grew 9.9% year on year as expected, up from 9.5% in August, but imports leapt 13.2% when a mere 0.4% was forecast, after having fallen -2.1% in August. The turnaround has been attributed to the reopening of markets across the world, but the suggestion is the resurgence of the virus in Europe and elsewhere may make this a temporary blip.
Plus given a lot of the increase in imports reflects medical and work-from-home equipment, it may well prove a one-off.
The materials sector didn’t benefit yesterday, falling -0.3% to be the only sector to close in the red. The iron ore price fall didn’t help, but nor did unconfirmed news Beijing has halted the purchase of Australian coal. Canberra is seeking clarification.
It was otherwise a strong session for most sectors, with a 0.6% gain for healthcare being the least among the gainers. IT’s 1.6% gain looked a bit half-hearted after a solid night for the Nasdaq.
Individually, whiplash stocks UR Westfield ((URW)) and Virgin Money UK ((VUK)) each jumped 7.5%, presumably as Boris did not put the UK into another full lockdown, and is allowing shops to remain open.
Telstra shared third on the index winners’ board while worst performer on the downside was Bravura Solutions ((BVS)), which fell back -3.3% after shooting up on Monday on acquisition news.
Now, I have not yet received a response to requested clarification from the ASX as to how to interpret its new futures data tables, so it’s still a grain of salt situation. They probably don’t know either. It appears the futures are down -42 points this morning (-0.7%) with the S&P500 falling -0.6%, but that’s just my attempt to decipher.
Making America Grate Again
Superhero Trump Man was back out on the campaign trail yesterday, telling the mask-less at a rally in Florida he’d like to kiss them all. Please form an orderly queue.
The latest bookmaker odds suggest the Democrats are going to sweep all three houses, and Biden retains a considerable lead in the critical swing states of Pennsylvania, Michigan and Wisconsin. Hence, Wall Street anticipates a sizeable stimulus package once the election is done and dusted, which will more than offset the impact of reversed tax cuts.
To that end, the Republican Senate has offered a US$500bn interim package to specifically cover US equivalent JobKeeper/Seeker and a couple of other things, but Pelosi won’t have a bar of it, noting she “has the leverage”.
Indeed she does, if the polls are anything to go by and the fact the White House has lifted its offer from (USD) 1.0 to 1.4 to 1.6 to 1.8 trillion to tempt her down from a steadfast 2.2.
In the meantime, US hospitalisations are climbing again.
Wall Street was initially spooked last night by news both Johnson & Johnson and Eli Lilly had paused their phase 3 vaccine/antibody trials due to potential safety concerns, which basically means at least one patient out of thousands has a side-effect. However, medical experts were quick to point out pauses are very common in drug trials, which the market would know if it had paid any attention to trials other than for covid.
Apple launched its 5G iPhone range last night, and the stock fell -2.7%. Nothing wrong with the phones per se, just that the share price rallied 6% on Monday night in anticipation. Analysts believe 5G marks the beginning of a new “supercycle” of device replacement, but one small issue is that of 5G coverage still being pretty scant across the country.
Amazon had also rallied on Monday night ahead of last night’s Prime Day. It closed flat last night.
JPMorgan (Dow) and Citigroup reported September quarter earnings last night and both beat. JPMorgan fell -1.6% and Citi fell -4.8%. The banks had also enjoyed positive sessions in the lead-up to their reports and in Citi’s case, a regulatory cloud still hovers.
The Dow was down over -200 points early in the session before climbing back into only double digits, and then dropping again. Apple was a hit on all three indices. The Nasdaq was positive for most of the afternoon led by Apple’s partners in Big Tech crime, but failed to hang on at the death.
|Spot Metals,Minerals & Energy Futures|
|Gold (oz)||1892.20||– 30.20||– 1.57%|
|Silver (oz)||24.10||– 0.97||– 3.87%|
|Copper (lb)||3.04||– 0.02||– 0.62%|
|Aluminium (lb)||0.83||+ 0.00||0.39%|
|Lead (lb)||0.81||– 0.01||– 0.91%|
|Nickel (lb)||6.81||– 0.07||– 0.96%|
|Zinc (lb)||1.09||– 0.01||– 1.02%|
|West Texas Crude||40.19||+ 0.69||1.75%|
|Brent Crude||42.45||+ 0.69||1.65%|
|Iron Ore (t)||121.35||– 2.50||– 2.02%|
The US dollar suddenly jumped up 0.5% last night, as it does when risk escalates. Commentators put those risks down to stimulus and the election, as if they were something new. Short covering I’d guess.
It was thus not a good night for metal prices.
The oils bucked the trend on the usual weekly US inventory lottery.
It was a good night for the RBA, with the Aussie down -0.7% at US$0.7160.
SPI Overnight maybe down -42.
Bank of Queensland ((BOQ)) reports earnings.
Challenger ((CGF)) provides a quarterly update.
The Australian share market over the past thirty days…
|BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS|
|AIA||Auckland International||Downgrade to Equal-weight from Overweight||Morgan Stanley|
|ANZ||ANZ Banking Group||Upgrade to Accumulate from Hold||Ord Minnett|
|BHP||BHP||Upgrade to Buy from Accumulate||Ord Minnett|
|BPT||Beach Energy||Upgrade to Buy from Accumulate||Ord Minnett|
|COE||Cooper Energy||Upgrade to Buy from Accumulate||Ord Minnett|
|JHG||Janus Henderson Group||Upgrade to Neutral from Underperform||Credit Suisse|
|LNK||Link Administration||Upgrade to Equal-weight from Underweight||Morgan Stanley|
|Downgrade to Hold from Accumulate||Ord Minnett|
|NCM||Newcrest Mining||Upgrade to Buy from Neutral||Citi|
|NWL||Netwealth Group||Upgrade to Neutral from Underperform||Macquarie|
|ORG||Origin Energy||Upgrade to Buy from Accumulate||Ord Minnett|
|RIO||Rio Tinto||Upgrade to Buy from Accumulate||Ord Minnett|
|S32||South32||Upgrade to Buy from Accumulate||Ord Minnett|
|STO||Santos||Upgrade to Buy from Accumulate||Ord Minnett|
|SXY||Senex Energy||Upgrade to Buy from Accumulate||Ord Minnett|
|SYD||Sydney Airport||Upgrade to Overweight from Equal-weight||Morgan Stanley|
|TCL||Transurban Group||Downgrade to Neutral from Outperform||Macquarie|
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