Daily Market Reports | Dec 22 2023
This story features EAGERS AUTOMOTIVE LIMITED. For more info SHARE ANALYSIS: APE
| World Overnight | |||
| SPI Overnight | 7512.00 | + 23.00 | 0.31% |
| S&P ASX 200 | 7504.10 | – 33.80 | – 0.45% |
| S&P500 | 4746.75 | + 48.40 | 1.03% |
| Nasdaq Comp | 14963.87 | + 185.92 | 1.26% |
| DJIA | 37404.35 | + 322.35 | 0.87% |
| S&P500 VIX | 13.65 | – 0.02 | – 0.15% |
| US 10-year yield | 3.89 | + 0.02 | 0.44% |
| USD Index | 101.82 | – 0.60 | – 0.59% |
| FTSE100 | 7694.73 | – 20.95 | – 0.27% |
| DAX30 | 16687.42 | – 45.63 | – 0.27% |
By Greg Peel
Wild Ride
Options expiry was the trigger for the late sharp sell-off on Wall Street on Wednesday night and the local market similarly copped early volatility yesterday. The futures said down -74, the ASX200 fell -50 points in the first ten minutes, and then bounced to be square again an hour later.
It then fell back -26 points just as sharply before finally settling down to a more even keel through the afternoon. Suffice to say there was selling across most sectors by the close, likely locking in some profits.
Once again we saw bond yields fall but rate-sensitive sectors fall as well. Technology lost -1.4%, discretionary -1.2% and real estate -1.2%. These sectors have been recent beneficiaries of the rapid -100 basis point fall in the ten-year yield from its peak.
In discretionary, Eagers Automotive ((APE)) took a sudden -7.8% dive on no news other than audit relief for non-wholly owned subsidiaries. Not sure how that connects.
Industrials and utilities managed to post 0.4% gains against the tide.
Leading the index down were falls for the banks (-0.4%), materials (-0.5%) and energy (-0.6%). The fall in materials came despite a 2.5% jump in the iron ore price.
Healthcare also fell -0.4%, despite being the beneficiary of a surging Aussie dollar, which this morning has reached US68c.
All up, I doubt we can read much into yesterday’s action. The underlying trend remains positive for the time being.
Wall Street did it again overnight, moving very sharply late in the session, but this time it was up. The S&P500 was up 0.5% heading into the last half hour and closed up 1.0%.
Someone wants to get on board for a post-Christmas rally.
I didn’t appear we’ll be quite so excited today. The futures closed up only 0.3%, ahead of a steady exodus out of offices this afternoon.
As You Were
If the Wednesday night sharp sell-off on Wall Street featured profit-taking after a stellar run, it was all over on the night. Wall Street spent most of last night’s session righting the ship, before surging into the close.
All is forgiven.
In economic news last night, a revision of US September quarter GDP came in at 4.9%, below 5.2% estimates. Good, the economy was running slower than expected, and so far the December quarter estimate starts with a 2, keeping the Fed at bay.
But there were only 205,000 weekly new jobless claims last week when 215,000 was forecast. The Fed remains concerned about stubborn tightness in the labour market, and its potential impact on inflation.
Yet Wall Street firmly believes 2024 will be the year of rates cuts, and for the right reasons not the wrong. That’s the consensus view anyway, but many a bear still lurks in the cave.
Providing a boost last night was an earnings result from memory chipmaker Micron, which jumped 8.6%.
The late rally may have represented a last chance for many who will be hitting the airports and railway stations tonight. However there will be the release of the November PCE to contend with.
Expectations are that core PCE will provide some Christmas cheer.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2044.50 | + 12.00 | 0.59% |
| Silver (oz) | 24.38 | + 0.25 | 1.04% |
| Copper (lb) | 3.81 | 0.00 | 0.00% |
| Aluminium (lb) | 0.97 | 0.00 | 0.00% |
| Nickel (lb) | 7.44 | 0.00 | 0.00% |
| Zinc (lb) | 1.12 | 0.00 | 0.00% |
| West Texas Crude | 73.81 | – 0.22 | – 0.30% |
| Brent Crude | 79.26 | – 0.19 | – 0.24% |
| Iron Ore (t) | 138.23 | + 3.57 | 2.65% |
No joy on LME prices.
Nothing appears to be stopping iron ore heading into year-end.
Oil price have settled down following their Red Sea rally.
US bonds yields were steady last night but the US dollar index dropped another -0.6%. The disparity between a seemingly dovish Fed and a seemingly still hawkish RBA has seen the Aussie rally US2.5c since mid-December.
It’s currently up 1.0% at US$6801.
Good for importers, and offshore earners, not so good for exporters.
Today
The SPI Overnight closed up 23 or 0.3%.
Nothing on the calendar for Australia today.
The US will see PCE inflation, durable goods orders, new home sales and consumer sentiment.
How ever those numbers play out, it will be Wednesday before our market can respond.
And that’s it from me for 2023.
FNArena’s daily service will now close for the break, returning on January 8. The website will otherwise be fully accessible.
I’ll be returning later in January.
Merry Christmas to all and to all a good night. Have a good one.
The Australian share market over the past thirty days…
| Index | 21 Dec 2023 | Week To Date | Month To Date (Dec) | Quarter To Date (Oct-Dec) | Year To Date (2023) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 7504.10 | 0.82% | 5.88% | 6.46% | 6.61% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ARB | ARB Corp | Downgrade to Hold from Buy | Ord Minnett |
| CVN | Carnarvon Energy | Upgrade to Outperform from Underperform | Macquarie |
| CXO | Core Lithium | Downgrade to Neutral from Outperform | Macquarie |
| EVN | Evolution Mining | Upgrade to Outperform from Underperform | Macquarie |
| GL1 | Global Lithium Resources | Downgrade to Neutral from Outperform | Macquarie |
| ILU | Iluka Resources | Downgrade to Neutral from Buy | Citi |
| LLL | Leo Lithium | Downgrade to Neutral from Outperform | Macquarie |
| LTR | Liontown Resources | Downgrade to Neutral from Outperform | Macquarie |
| NEU | Neuren Pharmaceuticals | Upgrade to Buy from Hold | Bell Potter |
| PLS | Pilbara Minerals | Downgrade to Sell from Neutral | Citi |
| PXA | Pexa Group | Downgrade to Hold from Add | Morgans |
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.)
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