Daily Market Reports | Apr 08 2021
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|SPI Overnight (Jun)||6935.00||+ 36.00||0.52%|
|S&P ASX 200||6928.00||+ 42.10||0.61%|
|Nasdaq Comp||13688.84||– 9.54||– 0.07%|
|S&P500 VIX||17.16||– 0.96||– 5.30%|
|US 10-year yield||1.65||– 0.00||– 0.18%|
|USD Index||92.43||+ 0.12||0.13%|
|DAX30||15176.36||– 36.32||– 0.24%|
By Greg Peel
From Little Things
The IMF has increased Australia’s 2021 GDP growth forecast to 4.5% from a prior 3.5%. The IMF is typically around six months behind the curve, so we’ll see how things go.
We recall that the economy grew by 3.1% in the December quarter and 3.4% in September, but having fallen -7.0% in June, following a slight fall in March, that netted out to a -1.1% fall in 2020 and the first recession in 28 years.
And we’re yet to see the true fallout from the expiry of government support measures such as JobKeeper and rent relief. And the IMF’s forecast comes with the caveat of a successful vaccine rollout. Damn those Europeans.
The stock market seemed to like the news yesterday, although it looked like we saw another big sell order hit the market late morning. The ASX200 was up 47 points around 11am but at 11.30 plunged nearly all the way back in an hour. Normal programming was restored by the close.
It is interesting that the apparent large order appeared when the index looked like holding above 6900. Exactly the same thing happened at 6800 a month or so ago. That time there seemed to be three attempts to crush the market before eventually the level was conquered.
We should note that such orders may not be anything at all suspicious. We don’t know if there is a trade-off somewhere on the other side (in derivatives for example).
Unlike Tuesday’s trade, which was driven firstly by Wall Street strength but also by local stock news that was specifically concentrated in a couple of sectors, yesterday was more of a “buy everything” session, with all sectors closing in the green. Having sat it out on Tuesday, yesterday energy topped the boards with a 1.4% gain.
Close second was property (+1.2%), which is a clear beneficiary of strong economic growth, but then so is everything else, really. All other sectors moved up around 0.3-0.6% other than tech (+1.0%), as traders again jumped into Afterpay ((APT)). When will S&P move Afterpay into financials where it belongs?
There were no standout individual stock stories yesterday and the winners’ board was dominated by gold (and lithium) miners, after gold posted a couple of good sessions while we were scoffing chocolate.
Incitec Pivot’s ((IPL)) big fall on Tuesday reversed by 5.6% yesterday after brokers suggested strong fertiliser prices are offsetting the company’s production problems.
On the flipside, Cleanaway Waste Management ((CWY)) fell back -4.7% after surging on Tuesday, likely because its proposed acquisition is not cut and dry.
Adbri ((ABC)) topped the losers’ board with -5.0%, having gone ex.
All of the above occurred despite Wall Street taking a breather on Tuesday night. It took a breather again last night but our futures are up 36 points this morning. This would be aided by the fact the Aussie is down -0.7% in 24 hours, which is not what the IMF would have expected.
What can one say?
Not a lot. Wall Street was a up a bit, down a bit last night before closing flat. The small gain for the S&P was nevertheless another new all-time high.
The minutes of the last Fed meeting were released and blow me down if the FOMC didn’t suggest it will be “some time” before QE is tapered or rates lifted. They might as well take a couple of years off.
Current optimism in markets is underpinned by America’s rapid vaccine rollout, with 32.6% of the population now having received at least one dose. That’s still behind Israel and the UK. What are we up to? 2%? My 83 year-old mother in a retirement village is still waiting, because her GP is still waiting.
We might have to be wary if Wall Street continues to do nothing for a few more sessions. I noted recently markets that fail to go up any further do tend to pull back and regroup, and that’s exactly what happened the last time Wall Street went sideways for a period.
That’s all folks.
|Spot Metals,Minerals & Energy Futures|
|Gold (oz)||1737.60||– 6.00||– 0.34%|
|Silver (oz)||25.10||– 0.05||– 0.20%|
|Copper (lb)||4.05||– 0.05||– 1.13%|
|Aluminium (lb)||1.02||– 0.00||– 0.20%|
|Lead (lb)||0.89||+ 0.00||0.44%|
|Nickel (lb)||7.43||– 0.03||– 0.38%|
|Zinc (lb)||1.27||– 0.00||– 0.34%|
|West Texas Crude||59.77||+ 0.44||0.74%|
|Brent Crude||63.04||+ 0.43||0.69%|
|Iron Ore (t)||172.90||+ 2.05||1.20%|
Copper pulled back a bit last night after rising on Tuesday night in the wake of Chile’s border closure, but otherwise not much action across the board.
Which is one reason the big fall in the Aussie, down -0.7% to US$0.7612, seems out of place.
The Australian and US ten-year bond rates had converged as they both spiked recently and the Aussie pushed back up to 78, but US yields have since dropped back faster, which should be reflected in an Aussie dollar gain.
Traders suggest that having hit its 50-day moving average, the Aussie has copped some selling but remains well supported (technically) around here.
The SPI Overnight closed up 36 points or 0.5%.
Fed chair Jerome Powell will make a speech tonight, somewhere.
Scentre Group ((SCG)) holds its AGM.
ARB Corp ((ARB)) goes ex.
The Australian share market over the past thirty days…
|BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS|
|BSL||Bluescope Steel||Downgrade to Neutral from Buy||Citi|
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