The Overnight Report: Result!

Daily Market Reports | Apr 30 2021

This story features WOOLWORTHS LIMITED, and other companies. For more info SHARE ANALYSIS: WOW

World Overnight
SPI Overnight (Jun) 7045.00 – 16.00 – 0.23%
S&P ASX 200 7082.30 + 17.60 0.25%
S&P500 4211.47 + 28.29 0.68%
Nasdaq Comp 14082.55 + 31.52 0.22%
DJIA 34060.36 + 239.98 0.71%
S&P500 VIX 17.61 + 0.33 1.91%
US 10-year yield 1.64 + 0.02 1.23%
USD Index 90.64 + 0.03 0.03%
FTSE100 6961.48 – 2.19 – 0.03%
DAX30 15154.20 – 137.98 – 0.90%

By Greg Peel

Trolley Wars

The ASX200 opened strongly yesterday but fell to be only up 7 late morning. At lunchtime it hit a high of up 32, approaching 7100, but slipped again to close up 17.

The index continues to hold above 7000 but is struggling for any conviction to push higher. That lack of conviction is underscored by recent volumes being to the low side. Perhaps we’re all waiting for the May budget to spark some life into the market, or not.

Meanwhile, the focus has been on the flood of corporate quarterly updates. This week the big supermarkets have been in focus.

It is a truth universally acknowledged that one of the two majors will be performing better for a period than the other, before those roles reverse for a time, and later back again. For a long time Woolworths ((WOW)) was leaving Coles ((COL)) in its dust until Coles spun out of Wesfarmers and hit the front thanks to aged rock stars and Little Shop landfill.

More recently, analysts have favoured Woolies over Coles but were surprised by the latter’s sales numbers on Wednesday, leading to broker upgrades to Buy. Yesterday was Woolies’ turn and again brokers were surprised, this time negatively.

The result was an investor rush from one side of the ferry to the other. Woolworths fell -3.9% to be the third worst index performer on the day, and the money flowed into Coles, up 3.3%. Despite the offset, the consumer staples sector closed down -1.3% to be the standout loser on the day.

Technology won the day with a 2.3% jump as recent selling in BNPL stocks suddenly reversed.

Healthcare (+0.9%), energy (+0.8%) and materials (+0.8%) provided the index clout, with the banks (-0.1%) sitting it out. The top four index winners on the day were all miners, and specifically all miners that had been earlier shot down on their quarterly updates. Nickel Mines ((NIC)) rose 7.9% on insider buying, while gold miners Ramelius Resources ((RMS)) and Resolute Mining ((RSG)) rebounded 6.8% and 5.4% and Lynas Rare Earths ((LYC)) chipped in with 4.8%.

I suggested yesterday Megaport ((MP1)) was becoming a bit of a star. It was up another 4.7% to add to tech sector gains. Shareholder Bevan Slattery has revealed shorters are looking to cover, but he's not providing any of his shares. Instead, he intimated on social media, he's having the popcorn ready, watching the spectacle unfold.

Going the other way was Nuix ((NXL)), again, down -5.6% to be the top index loser, followed by UR Westfield ((URW)) with -4.5% on its quarterly. After a good run lately, Nufarm ((NUF)) pulled back -3.2%.

Just to underscore the lack of market conviction at present, the S&P500 closed up 0.7% overnight and our futures are down -16 points this morning, despite further gains in commodities (other than gold).

That would wipe out yesterday.

Bring on Josh.

After the Deluge

Last night on Wall Street saw the biggest session of earnings results in the calendar with 11% of S&P500 companies reporting, and quite a handful of Dow names among them.

Of the Dow names, it is clear from the average’s outperformance last night that on a net basis they were good. But we still saw more negative responses to stellar beats.

Apple reported blow-away numbers in Wednesday night’s aftermarket to be up 2.4% in late trading, but closed down -0.1% last night. Caterpillar has been one of the standout covid-comeback kids and it also knocked forecasts out of the park, and fell -2%.

Outside the Dow, Facebook had also reported along with Apple and saw a 6% pop at the time. It closed up 7.3% last night. Facebook had been a bit of a Big Tech laggard recently, what with all the regulatory scrutiny and so forth. Also lagging had been Amazon, which having soared up to September last year had traded sideways ever since.

Amazon reported in this morning’s aftermarket and quite simply posted an astonishing beat on earnings. It’s up 3.1% as I write.

The beat rate on earnings to date has been 86%. Earnings have come in at an average 22.7% over forecast for companies reporting so far.

The first estimate of US March quarter GDP came out last night. No surprises in 6.4% annual growth. Economists suggest that number would have been higher but for covid-related supply-side bottlenecks. All hale the US consumer, with consumption jumping a whopping 10.7%.

That number was boosted by Biden’s stimulus cheques and Biden was at it again yesterday (our time), pledging even more stimulus, this time with a focus on families. Biden wants paid maternity (and other compassionate) leave. Currently, maternity leave has been solely left to individual employer policy.

Weekly new jobs claims also slipped further last night.

Put it together, and it seems the only way is up. But market-watchers are still waiting for what they believe is a pullback that has to happen.

As we can see from the Nasdaq’s underperformance last night, despite mega-cap Facebook’s influence, not all sectors are enjoying the spoils. But we’ll see what Amazon does tonight.

Commodities

Spot Metals,Minerals & Energy Futures
Gold (oz) 1772.00 – 9.50 – 0.53%
Silver (oz) 26.10 – 0.08 – 0.31%
Copper (lb) 4.53 + 0.05 1.10%
Aluminium (lb) 1.10 + 0.01 1.37%
Lead (lb) 0.95 + 0.01 1.18%
Nickel (lb) 7.82 + 0.16 2.04%
Zinc (lb) 1.31 + 0.01 0.80%
West Texas Crude 65.01 + 1.15 1.80%
Brent Crude 68.55 + 1.53 2.28%
Iron Ore (t) 190.45 0.00 0.00%

It looks like all’s right in Commodity Land at present.

Iron ore did indeed close unchanged for once, while the ups and downs in gold continue without any specific direction evident.

The Aussie is down -0.2% at US$0.7775.

Today

The SPI Overnight closed down -16 points or -0.2%. It’s the last day of the month, so anything could happen.

Locally we’ll see March quarter PPI numbers today along with month of March private sector credit.

China will report April PMIs.

It’s the eurozone’s turn to provide an estimate of GDP.

The US will see the Fed’s preferred PCE inflation numbers for March, noting that 10.7% jump in March quarter consumption.

Got your tomatoes ready? AMP ((AMP)) holds its AGM today.

Oil Search ((OSH)) and Janus Henderson ((JHG)) also hold AGMs while Cimic Group ((CIM)) posts quarterly earnings results. ResMed already posted during the US trading session.

Northern Star Resources ((NST)) and Origin Energy ((ORG)) post production numbers.

The Australian share market over the past thirty days…

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
ANZ ANZ Banking Group Downgrade to Neutral from Buy Citi
APX Appen Upgrade to Neutral from Underperform Macquarie
BSL Bluescope Steel Downgrade to Neutral from Outperform Credit Suisse
Downgrade to Neutral from Outperform Macquarie
CNU CHORUS Upgrade to Neutral from Sell UBS
COL Coles Group Upgrade to Buy from Neutral Citi
Upgrade to Outperform from Neutral Credit Suisse
JBH JB Hi-Fi Upgrade to Outperform from Neutral Credit Suisse
OSH Oil Search Upgrade to Buy from Neutral UBS
RWC Reliance Worldwide Upgrade to Add from Hold Morgans
SBM St Barbara Upgrade to Buy from Neutral Citi
SLK Sealink Travel Downgrade to Neutral from Outperform Macquarie

For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's – see disclaimer on the website)

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CHARTS

AMP CIM COL JHG LYC MP1 NIC NST NUF NXL ORG OSH RMS RSG URW WOW

For more info SHARE ANALYSIS: AMP - AMP LIMITED

For more info SHARE ANALYSIS: CIM - CIMIC GROUP LIMITED

For more info SHARE ANALYSIS: COL - COLES GROUP LIMITED

For more info SHARE ANALYSIS: JHG - JANUS HENDERSON GROUP PLC.

For more info SHARE ANALYSIS: LYC - LYNAS RARE EARTHS LIMITED

For more info SHARE ANALYSIS: MP1 - MEGAPORT LIMITED

For more info SHARE ANALYSIS: NIC - NICKEL MINES LIMITED

For more info SHARE ANALYSIS: NST - NORTHERN STAR RESOURCES LTD

For more info SHARE ANALYSIS: NUF - NUFARM LIMITED

For more info SHARE ANALYSIS: NXL - NUIX LTD

For more info SHARE ANALYSIS: ORG - ORIGIN ENERGY LIMITED

For more info SHARE ANALYSIS: OSH - OIL SEARCH LIMITED

For more info SHARE ANALYSIS: RMS - RAMELIUS RESOURCES LIMITED

For more info SHARE ANALYSIS: RSG - RESOLUTE MINING LIMITED

For more info SHARE ANALYSIS: URW - UNIBAIL-RODAMCO-WESTFIELD

For more info SHARE ANALYSIS: WOW - WOOLWORTHS LIMITED