The Monday Report – 27 November 2023

This story features ORIGIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: ORG

By Greg Peel

Holiday-Thin

Despite Wall Street being closed overnight, the ASX200 shot up 35 points early in Friday’s session. Because Wall Street was closed overnight, trading was thin and volumes low, and conviction waned into the afternoon.

All of materials, healthcare and industrials closed flat.

Energy rose 1.3% but utilities was the best performer on 1.6%, after Origin Energy ((ORG)) postponed its shareholder vote, suggesting the takeover may not yet be dead in the water. Origin rose 2.8%.

Technology was the worst performer (-1.7%) on a chart-topping -4.9% fall for TechnologyOne ((TNE)) after it reported earnings last week. WiseTech Global ((WTC)) and Megaport ((MP1)) were second and third worst performers.

This was likely due to the Aussie ten-year rising 6 points to 4.54% but that did not deter real estate (+0.5%), nor the banks (+0.3%).

Communication services nonetheless fell -0.5% and discretionary -0.5%, while staples gained 0.6%.

Train wreck of the day among ASX300 stocks was almond producer Select Harvests ((SHV)), which fell -10.5% on an earnings result highlighting a tough year of wet weather, output undermined by the verroa mite and subsequent beehive removal, and low prices.

Also in the 300, Seven west Media ((SWM)) jumped 8.7% as it prepares to launch a digital-only national news publication and has signed The Australian’s former editor-in-chief Chris Dore as a senior columnist.

Wall Street closed flat after Friday night’s abbreviated session, so we may not be looking at any great return to volumes today. The futures were nonetheless up 15 points on Saturday morning.

Hungover

It would be hard to get excited about a shortened session wedged in between Thanksgiving and the weekend, let alone bother to turn up. And sure enough, Wall Street closed flat.

When the NYSE closed at 1pm the S&P500 had just managed to fall over the line. The US ten-year yield rose 6 points in what was also a short session; the Nasdaq lost -0.1%.

US yields rose in the wake of European bonds rising on Thursday night after Germany posted a better than expected flash estimate of November PMI.

In the US, the estimates released on Friday night suggested a three-month low for the manufacturing PMI but a four-month high for the services PMI.

The Dow outperformed but only due to higher-priced stocks seeing modest gains. UnitedHealth was the best performer with 3.3% but is among the lower-priced stocks.

Friday night capped off a fourth week of gains for the S&P – its first since June and its biggest since November last year.

The S&P rose 1.3% for the week, the Nasdaq 0.9% and the Dow 1.3%.

It was of course Black Friday. There was trepidation heading into the annual shopping spree as to how much US consumers might tighten their belts this year, but early data from Mastercard reported a 2.5% increase on last year (ex-autos). That is not adjusted for inflation.

Online sales rose 7.5% to a record US$9.8bn. Tonight is Cyber Monday, which is the traditional online discount day, although the lines are blurred nowadays.

It's back to work for Wall Street tonight as investors look ahead to Thursday’s PCE inflation report, and attempt to weigh up the consumer appetite.

Commodities

Not a lot of action last night.

The Aussie is up 0.4% at US$0.6584, matching a fall in the US dollar.

The SPI Overnight closed up 15 points or 0.2% on Saturday morning.

The Week Ahead

It’s a big week for economic data in Australia.

Tomorrow we’ll see October retail sales, Wednesday brings the monthly CPI, Thursday building approvals and private sector credit and Friday house prices.

We’ll also see lead-in numbers for the GDP result due next week, with September quarter construction work done out on Wednesday and private sector capex on Thursday.

China reports November PMIs on Thursday.

The RBNZ holds a policy meeting on Wednesday.

The US will watch consumer confidence on Tuesday night and those PCE numbers on Thursday.

We’re now into the last trickle of local AGMs, and QBE Insurance ((QBE)) will provide a quarterly update today.

Collins Foods ((CKF)) and Fisher & Paykel Healthcare ((FPH)) report earnings this week.

The Australian share market over the past thirty days…

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