The Overnight Report: Caution Rules

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With the US election looming and local market updates skewed towards negative share price impacts, the Australian market is expected to start off rather cautiously this morning.

By Chris Weston, Head of Research, Pepperstone

Good morning.

On the data front, we’ve seen a weaker-than-expected 7.44m US job openings (JOLTS), with the quits rate’ coming in at a 10-year low, highlighting a lack of confidence in leaving a job and finding a new one.

A strong US consumer confidence report (108.7 vs 99.2 in September) was also a factor that influenced bond and USD pricing, although this was later offset by a strong US 7-year Treasury auction.

We’ve also seen the weight of capital moving to push Trump’s odds in the betting markets to a new high implied, although many remain conditioned to see this more as noise and less of a signal.  

In markets, while we’ve seen a modest move lower in US Treasury yields (the US 10yr is -2bp at 4.26%), with US interest rate swaps adding 5bp or so in implied Fed cuts over the coming 12 months, and while the S&P500 closed modestly higher (+0.2%), there have been no real standout moves to trade US election proxies.

Gold, and to a lesser extent silver, remain central on client’s radars, with client activity on the yellow metal well above average. 

A flat open awaits the ASX200 this morning.

The bulls will be enthused at the price action in the NAS100 and to a lesser extent S&P500. Both markets found solid buyers from their early lows, with price closing near session highs.

Alphabet, Visa, Snap, Reddit, and AMD have reported after hours, with a positive reaction seen in Google, and Reddit, while Snap and AMD have lost ground.

S&P500 and NAS100 futures are largely unchanged by way of the net effect.  

On the risk calendar today, traders need to navigate Aus Q3 CPI, the UK budget, EU, and US GDP.

On the calendar today:

-Australia 3Q CPI

-Eurozone 3Q GDP

-US 3Q GDP

-US Oct ADP employment

-Acrow ((ACF)) ex-div 3c (100%)

-Bega Cheese ((BGA)) AGM

-BHP ((BHP)) AGM

-Charter Hall Retail REIT ((CQR)) AGM

-Coronado Global Resources ((CRN)) Qtrly update

-Data#3 ((DTL)) AGM

-Dexus ((DXS)) AGM

-Karoon Energy ((KAR)) investor briefing

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Corporate news in Australia:

-Xero ((XRO)) has been hit with Fair Work lawsuit over alleged pay discrimination and bullying claims by a female engineer

-Senate crossbench considers inquiry as pressure mounts on prime minister Anthony Albanese over Qantas Airways ((QAN))  flight upgrades scandal amidst aviation oversight role

-Bloomberg reports the commercial real estate crash is even hammering AAA-rated office bonds, forcing investors to absorb losses on properties previously deemed rock-solid

-Aspen Group ((APZ)) is offloading shares in Eureka Group ((EGH)) after an unsuccessful acquisition attempt

-Dexus ((DXS)) is selling its 9.7% stake in Melbourne and Launceston airports

-Good Drinks Australia ((GDA)) has requested to delist from the ASX, pending shareholder approval at the AGM on November 28

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)

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