The Overnight Report: Can’t Stand The Wait

This story features WORLEY LIMITED, and other companies. For more info SHARE ANALYSIS: WOR

The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

By Greg Peel

Follow the Money

I suggested yesterday that given a flattish session on Wall Street overnight, the day’s trade on the ASX would be reflective of the day’s earnings results with less macro bias. And so it was the net 36 point gain for the ASX200 featured mixed moves in sectors.

Macro was indeed the focus for energy (+2.8%), on another jump in oil prices, although Worley ((WOR)) rose 6.3% on result. Utilities followed with 0.3%.

Healthcare sat it out (+0.1%), although Sonic Healthcare ((SHL)) rose 6.2%, as did industrials (-0.1%), but the financials found some buyers (0.4%) after some sharp falls this week. Netwealth ((NWL)) rose 7.0% on result.

Communication services fell -1.0% because Telstra ((TLS)) went ex.

Consumer discretionary rose 0.9%, with Domino’s Pizza ((DMP)) rising 7.6% on result.

Staples fell -1.3%, with Coles ((COL)) disappointing (-4.6%).

Technology jumped 2.2%, with WiseTech Global ((WTC)) topping the index on a 12.8% jump.

Real estate fell -0.7% despite Home Consortium ((HMC)) jumping 10.9%.

Materials rose 1.1%, with Iluka Resources ((ILU)) rising 9.8%.

Among other reporters on the day, in the 5%-plus response range were Reece ((REH)), AUB Group ((AUB)), Allkem ((AKE)) and Zip Co ((ZIP)).

The list of stocks rising more than 5% yesterday in the ASX300 numbered 19. Only four fell -5% or more, so it was a net good day for earnings, hence the index gain.

But Hansen Technologies ((HSN)) fell -13.3%. And stocks following on from Tuesday reports included EML Payments ((EML)), down another -11.0%, Nanosonics ((NAN)), down -5.6%, Adbri ((ABC)), down -4.8%, and ARB Corp ((ARB)), down -4.5%.

Moving into today, Wall Street was modestly positive overnight – losing steam towards the close with Jackson Hole looming – and today is Super Thursday in terms of numbers of companies reporting.

While there are a lot of smaller names, there are some biggies in there as well.

The futures are showing up 31 points, or 0.5% to the S&P500’s 0.3%.

Too Much Anxiety

Wall Street is currently carrying on like a kid on Christmas Eve, desperately counting the hours before Santa’s arrival, or in this case Jerome Powell. There’s still another night to wait, as while Jackson Hole kicks off tonight (our time), Powell will speak at 10am New York time on the Friday.

Wall Street is putting a lot of faith in the assumption Powell will put investors out of their misery and settle the debate as to whether the Fed will hike by 75 points in just under a month’s time, or 50. But this is to fail to acknowledge that past Jackson Holes have brought speeches from Fed chairs that are totally unrelated to monetary policy.

It was only Ben Bernanke who used the symposium to announce the various QE packages post-GFC. Janet Yellen didn’t even always attend.

Jerome Powell is the only Fed official the market hasn’t heard from since the July Fed meeting. Thus it is assumed this is his opportunity. The market is going to be awfully disappointed if he says nothing at all relevant.

The obvious impediment to making any market-moving policy announcement is the oft-noted August data that will flow between now and the September meeting, specifically CPI, PPI and jobs. And note that tomorrow morning in New York also brings the July PCE inflation data.

Why jump in ahead of the most up-to-date information?

Wall Street was up and down all session last night, but mostly up. But any rally attempt following three losing sessions was largely shut down each time.

In the day’s economic news, durable goods orders were unchanged in July when economists had forecast a 1% gain.

Pending home sales fell -19.9% year on year in July.

There were three aftermarket earnings results that drew attention.

Customer relationship management technology company Salesforce (Dow) is down -6.3%.

Cloud-based data platform Snowflake is up 17.6%.

Chip-making leader Nvidia is down -4.6%.

Commodities

The gold price has been on the move this week, despite the US ten-year yield rising substantially and the US dollar pressing on to new multi-decade highs. The ten-year rose another 5 points to 3.11% last night.

Oil prices continue to track higher after the Saudis threatened to cut production.

The Aussie is down -0.3% at US$0.6908.

Today

The SPI Overnight closed up 31 points or 0.5%.

The US will see June quarter PCE inflation data tonight – a bit old – ahead of tomorrow night’s July PCE numbers.

The June quarter GDP result will be revised – also a bit old.

The long, long list of today’s local earnings reporters includes Charter Hall ((CHC)), Flight Centre ((FLT)), which is the most shorted stock on the market, Insignia Financial ((IFL)), Perpetual ((PPT)), Qantas Airways ((QAN)), South32 ((S32)), Whitehaven Coal ((WHC)) and Woolworths ((WOW)).

JB Hi-Fi ((JBH)) and REA Group ((REA)) are among today’s stocks going ex-div.

FNArena’s Corporate Results Monitor provides both a calendar of upcoming result releases and a summary of all reports to date: https://www.fnarena.com/index.php/reporting_season/

The Australian share market over the past thirty days…

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

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