Daily Market Reports | Jan 20 2023
World Overnight | |||
SPI Overnight | 7386.00 | 0.00 | 0.00% |
S&P ASX 200 | 7435.30 | + 41.90 | 0.57% |
S&P500 | 3898.85 | – 30.01 | – 0.76% |
Nasdaq Comp | 10852.27 | – 104.74 | – 0.96% |
DJIA | 33044.56 | – 252.40 | – 0.76% |
S&P500 VIX | 20.52 | + 0.18 | 0.88% |
US 10-year yield | 3.40 | + 0.02 | 0.65% |
USD Index | 102.06 | – 0.36 | – 0.35% |
FTSE100 | 7747.29 | – 83.41 | – 1.07% |
DAX30 | 14920.36 | – 261.44 | – 1.72% |
By Rudi Filapek-Vandyck
The mantra used to be it's our dollar, but it's your problem. Since last year the world of finance is witnessing a new variant on the theme: it's your recession, not our problem.
Australia is facing a noticeable slow-down in economic activity this year, thanks to RBA and global tightening, but very few forecasters have negative GDP growth penciled in their outlook.
Things are decidedly different for numerous economies elsewhere with central bankers and economists debating the timing and severity of a most likely economic recession.
Witness the divergence in equity market performances between the former champion of the world, Wall Street, and Australia/Europe/Emerging Markets. In 2023, it seems, investors are all too happy to keep the distinction going.
Turning to price action overnight, it is amazing how quickly momentum can reverse: just ask Thanassi who'll be contemplating today, and the next few days, exactly what happened after that positive start. US equities enjoyed their best start to the new calendar year since ages but questions are being asked how much of those gains will prove sustainable, at least in the short term.
Identifying one culprit almost seems unfair. One day it's the bond market, cheered on by Fed representatives, the next day it's all about weak economic signals. Overnight the attention turned to corporate results. It simply wasn't good enough. Procter & Gamble reported shrinking sales volume. Alcoa Corp guided towards weaker-than-anticipated aluminum shipments. Discover Financial Services sank after the credit-card company warned write-off rates may double this year.
Not helping general sentiment, the US hit its federal debt limit and the Treasury Department began the use of special measures to avoid defaulting on any payments. We all know there's a small cabal inside the Republican party who'd like to make a big issue about this matter, and they probably will.
Returning to the Australian Open; small things matter. Sometimes a whole lot. The Grand Debate among US forecasters is now whether the Federal Reserve has two or three more rate hikes by 25bp each up its sleeves. Pick your pick. The sun will definitely rise again tomorrow.
Overnight data showed new US home construction declined for the fourth straight consecutive month in December.
Unlike the US, European inflation is not showing any signs of possibly having peaked. Ergo, the ECB is signalling a different outlook. Inflation cannot be left running amok.
Commodities remain supported, despite all talk about the upcoming US recession. China re-opening remains the theme du jour, also feeding into a small renaissance for crude oil momentum. European gas prices declined amid ample inventories and strong LNG imports. North Asian LNG prices were steady. Iron ore keeps feeding off the same positive sentiment.
US indices stuck with the reversal in momentum last night, but being down more than -1% during the session, saw bargain hunters step in and losses reduced, only to see those losses widen again by the close of trade. Losses ranged between -0.76% for both the Dow and the S&P500 and -0.96% for the Nasdaq.
Local SPI futures suggest indecision and ongoing willingness to dance to our own tune in Australia. Since it's Friday, that might yet prove a little optimistic come late afternoon.
Spot Metals,Minerals & Energy Futures | |||
Gold (oz) | 1932.20 | + 28.50 | 1.50% |
Silver (oz) | 23.86 | + 0.42 | 1.79% |
Copper (lb) | 4.27 | + 0.01 | 0.30% |
Aluminium (lb) | 1.18 | – 0.10 | – 8.14% |
Lead (lb) | 0.99 | – 0.02 | – 1.68% |
Nickel (lb) | 13.11 | + 0.52 | 4.16% |
Zinc (lb) | 1.54 | + 0.02 | 1.31% |
West Texas Crude | 80.48 | + 1.28 | 1.62% |
Brent Crude | 86.23 | + 1.50 | 1.77% |
Iron Ore (t) | 121.79 | + 0.60 | 0.50% |
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
ALD | Ampol | Downgrade to Neutral from Outperform | Credit Suisse |
AWC | Alumina Ltd | Downgrade to Sell from Hold | Ord Minnett |
BBN | Baby Bunting | Downgrade to Hold from Add | Morgans |
GPT | GPT Group | Upgrade to Equal-weight from Underweight | Morgan Stanley |
HLS | Healius | Upgrade to Hold from Lighten | Ord Minnett |
Downgrade to Underperform from Neutral | Credit Suisse | ||
HVN | Harvey Norman | Downgrade to Lighten from Buy | Ord Minnett |
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 |
PMV | Premier Investments | Downgrade to Sell from Hold | Ord Minnett |
RBL | Redbubble | Downgrade to Hold from Add | Morgans |
REA | REA Group | Downgrade to Lighten from Accumulate | Ord Minnett |
SCG | Scentre Group | Upgrade to Overweight from Equal-weight | Morgan Stanley |
SEK | Seek | Downgrade to Hold from Buy | Ord Minnett |
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 |
VCX | Vicinity Centres | Upgrade to Equal-weight from Underweight | Morgan Stanley |
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