The Overnight Report: The Usual Quiet

This story features NEW HOPE CORPORATION LIMITED, and other companies. For more info SHARE ANALYSIS: NHC

By Greg Peel

Six-Month High

The ASX200 hit a six-month high yesterday, in gaining all of 10 points. The index enthusiastically rallied up over 30 points in the morning before fading all afternoon, as traders squared up ahead of the US holiday. Despite an abbreviated Wall Street session tonight, Thanksgiving is seen as a four-day weekend in the US.

Having been running in tandem most often of late, the resource sectors parted company yesterday. Energy fell -1.8% and materials rose 0.9%.

For energy it was a double-whammy of lower oil and coal prices. Topping the losers’ board were the three big pure-play coal miners, New Hope Corp ((NHC)), Whitehaven Coal ((WHC)) and Coronado Resources ((CRN)).

New Hope had other problems. Given the company elected to hold its AGM in the Hunter Valley, without live streaming, something was afoot.

Only 50 souls turned up to hear how its huge jump in profit was in fact hampered by wet weather and labour shortages, and that production will fall -1% in FY23. Attendees were invited to tour the company’s nearby Bengalla project, but that was canned when protesters appeared. New Hope shares fell -8.8%.

Materials was otherwise driven by gold miners, taking four of the top five winners’ spots. St Barbara ((SBM)), which has had a few problems lately, rose 9.0%. Evolution Mining ((EVN)) held its AGM yesterday and rose 6.6%.

Technology was the winning sector yesterday (+1.3%), thanks in part to the rise and rise of AI company Brainchip Holdings ((BRN)), which seems to be doing a bit better than the other lot. There has been no new news of late, with analysts citing the boost from lower rates as central banks start to slow the pace.

The Aussie ten-year yield fell -4 points yesterday to 3.56%, and is down -60 points in a month. Brainchip rose 8.6%.

Outside the index, AGM winners yesterday were Nick Scali ((NCK)), up 9.5% after revealing a 66% increase in first half profit, and Kogan ((KGN)), up 7.9% after informing it had gone a long way to reducing its inventory overhang.

Sector heavyweight Harvey Norman ((HVN)) offered a solid update for the most part, otherwise offset by currency movements and weak sales in Ireland. It fell -1.4% and the discretionary sector fell -0.2%.

Real estate had one of its rare good days (+1.2%), the banks gave a bit back (-0.3%), and all this talk of a frugal Christmas seems to be weighing on staples (-0.6%).

Perhaps just the turkey slices this year.

If ever there is a good day to have your office Christmas lunch, today is usually a good choice.

Life in the Slow Lane

The Swedish central bank last night raised its cash rate by 75 points to 2.5%. This follows a 100 point hike in September. Riksbanken shocked the world by warning that high prices are undermining people's purchasing power and making it tough for households and companies to plan their finances.

Back in my days in the markets we would call them “wood ducks”.

By contrast, the Korean central bank yesterday hiked its rate by only 25 points, to 3.25%, following a run of 50 point hikes.

Korea joins Australia, and (it is presumed) the US next month, in starting to slow the pace, given that high prices are undermining people's purchasing power and making it tough for households and companies to plan their finances, but policy over-aggression may lead to recession.

Commodities

As far as I understand the EU/G7 price cap on Russian oil is settled, although a final price has not been mentioned, but it’s a different story for the gas price cap discussion.

This one’s just for the EU, reliant on Russian gas, noting that after next week Europe will no longer import Russian oil.

A meeting of EU energy ministers last night turned into a shambles, and was deemed “a joke” by one. At the heart of the issue is a suggested cap price of US$275/mmbtu – a price seen very briefly in the August spike, way above the current spot, and possibly never to be reached again.

The point?

Meanwhile, Chinese covid cases hit new records every day. Metals markets were largely quiet last night without the US.

Oil bounced back a tad.

The Aussie is up 0.5% at US$0.6765.

Today

The SPI Overnight closed up 13 points.

There are a few more AGMs today.

The NYSE closes tonight at 1pm New York time.

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.

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)

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms