Daily Market Reports | Jan 19 2023
| World Overnight | |||
| SPI Overnight | 7308.00 | – 31.00 | – 0.42% |
| S&P ASX 200 | 7393.40 | + 7.10 | 0.10% |
| S&P500 | 3928.86 | – 62.11 | – 1.56% |
| Nasdaq Comp | 10957.01 | – 138.10 | – 1.24% |
| DJIA | 33296.96 | – 613.89 | – 1.81% |
| S&P500 VIX | 20.34 | + 0.98 | 5.06% |
| US 10-year yield | 3.38 | – 0.16 | – 4.53% |
| USD Index | 102.42 | + 0.02 | 0.02% |
| FTSE100 | 7830.70 | – 20.33 | – 0.26% |
| DAX30 | 15181.80 | – 5.27 | – 0.03% |
By Rudi Filapek-Vandyck
Apologies: technical problems have prevented us from publishing this Overnight Report sooner this morning.
Early January market optimism quickly turned into the realisation the US economy is still facing an economic recession this year. All equity indices in the US have turned tail by more than -1% this morning Sydney time.
The offset is that US bonds are now pricing out the probability of a 50bp hike by the Fed at the upcoming meeting.
Economic data in the form of retail sales and industrial production came out weak and from the background the likes of Morgan Stanley strategist Mike Wilson would have whispered: this is what happens ahead of economic recession.
From a technical perspective, the S&P500 has once again been stopped in its rally at the 200 days moving average, still leaving a net gain of 2.8% for the year to date.
Adding further fuel to the risk off sentiment was more hawkish talk from Fed heads. Fighting inflation remains the key goal. Economic recession is not enough to waver. At least such remains the official mantra for the time being.
A wise observer once remarked there is one certainty about the Federal Reserve and that is its policy will change if the facts change first. It's timing the pivot that is more of a challenge.
Yesterday, the Bank of Japan ignored market speculation and made no change to its yield curve control policy. Response from economists: it's but a matter of time. Again: timing the pivot can be extremely tricky.
More job layoffs from Microsoft (-10,000 or close to -5% of its global workforce) further added to the general realisation that this is how economic recessions announce themselves; weakening data, job losses and a central bank that remains intent to continue fighting inflation.
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1903.70 | – 4.80 | – 0.25% |
| Silver (oz) | 23.44 | – 0.46 | – 1.92% |
| Copper (lb) | 4.26 | + 0.15 | 3.64% |
| Aluminium (lb) | 1.29 | + 0.01 | 0.59% |
| Lead (lb) | 1.01 | – 0.01 | – 1.17% |
| Nickel (lb) | 12.59 | + 0.32 | 2.62% |
| Zinc (lb) | 1.52 | + 0.05 | 3.50% |
| West Texas Crude | 79.20 | – 1.83 | – 2.26% |
| Brent Crude | 84.73 | – 2.01 | – 2.32% |
| Iron Ore (t) | 121.19 | + 0.24 | 0.20% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AWC | Alumina Ltd | Downgrade to Sell from Hold | Ord Minnett |
| BBN | Baby Bunting | Downgrade to Hold from Add | Morgans |
| CGF | Challenger | Downgrade to Hold from Add | Morgans |
| DXS | Dexus | Downgrade to Underweight from Overweight | Morgan Stanley |
| EVN | Evolution Mining | Downgrade to Underperform from Neutral | Credit Suisse |
| HLS | Healius | Upgrade to Hold from Lighten | Ord Minnett |
| Downgrade to Underperform from Neutral | Credit Suisse | ||
| JBH | JB Hi-Fi | Downgrade to Lighten from Hold | Ord Minnett |
| JHX | James Hardie Industries | Downgrade to Accumulate from Buy | Ord Minnett |
| LOV | Lovisa Holdings | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| NCM | Newcrest Mining | Downgrade to Neutral from Outperform | Macquarie |
| NST | Northern Star Resources | Downgrade to Neutral from Outperform | Credit Suisse |
| ORG | Origin Energy | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| PMV | Premier Investments | Downgrade to Sell from Hold | Ord Minnett |
| REA | REA Group | Downgrade to Lighten from Accumulate | Ord Minnett |
| SEK | Seek | Downgrade to Hold from Buy | Ord Minnett |
| SFR | Sandfire Resources | Downgrade to Underperform from Neutral | Credit Suisse |
| SUL | Super Retail | Downgrade to Lighten from Hold | Ord Minnett |
| TCL | Transurban Group | Downgrade to Lighten from Buy | Ord Minnett |
| URW | Unibail-Rodamco-Westfield | Upgrade to Accumulate from Lighten | Ord Minnett |
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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