Daily Market Reports | Nov 07 2024
This story features NATIONAL AUSTRALIA BANK LIMITED, and other companies. For more info SHARE ANALYSIS: NAB
National Australia Bank ((NAB)) has released an FY24 result largely in line with analyst expectations while the return of Trump to the White House has triggered a rally for share markets, with bonds selling off (higher yields).
SPI futures are indicating positive follow-through on Thursday, although the largest gains seem to have already occurred in yesterday’s session.
| World Overnight | |||
| SPI Overnight | 8226.00 | + 18.00 | 0.22% |
| S&P ASX 200 | 8199.50 | + 67.70 | 0.83% |
| S&P500 | 5929.04 | + 146.28 | 2.53% |
| Nasdaq Comp | 18983.47 | + 544.29 | 2.95% |
| DJIA | 43729.93 | + 1508.05 | 3.57% |
| S&P500 VIX | 16.27 | – 4.22 | – 20.60% |
| US 10-year yield | 4.43 | + 0.14 | 3.19% |
| USD Index | 105.01 | + 1.64 | 1.59% |
| FTSE100 | 8166.68 | – 5.71 | – 0.07% |
| DAX30 | 19039.31 | – 216.96 | – 1.13% |
Good morning.
Stephen Auth, CFA, Executive Vice President, Chief Investment Officer, Equities at Federated Hermes
Trump wins “Bigly”; Senate flips; House still undecided.
Confounding the experts, President Trump handily won the Presidential election late on election night. Along with this, he solidly flipped the Senate; the only branch of government undecided as of this moment is the House, which will be important to how aggressively Trump can implement his agenda.
While we are waiting for final confirmation on the House, which might not come until Friday, remember this: The world as we know it has not just ended, wherever you are on the political spectrum.
And as we’ve noted repeatedly, the U.S. economy is a large, private sector-driven organism whose organic forward direction is hard to stop, regardless of who is in charge in Washington.
History tells us that the best course for investors is to remain in the market rather than time it based on party affiliation.
This said, the outcome from last night likely will impact which sectors do best. As we’ve noted repeatedly, Trump’s growth agendalower taxes, deregulation, increased inbound U.S. investment via tariff negotiationsis a wind at the back of the Old Economy and supports the other forces already favouring these sectors of the market.
The market’s initial reaction certainly appears to agree with us, and fortunately our balanced model’s overweight to equities in general and Old Economy sectors in particular (Value and Small Cap) is working “bigly.”
We are watching the bond market sell off closely; our balanced models are under-weight there along with the related large-cap growth stocks, as the conventional wisdom has been that Trump is bad for deficits.
We disagree on a longer-term view, and are considering backfilling our bond/growth underweight on what we view as an overreaction by bonds.
One last point: if the House flips to the Democrats, mixed government is not necessarily market positive because a frozen legislative agenda could lead to a huge tax hike and/or a deficit busting compromise next year.
That could ultimately diminish the outlook for next year. Stay tuned.
ANZ Bank:
The proverbial Trump trade’ dominated financial markets, with strong moves across the board in the US.
UST yields are higher following the US election result but are off their overnight highs following a strong 30y auction.
The yield on the US 10y note at 4.44% is around 25bp higher compared to levels earlier in the week.
Oil was little changed with WTI down -0.2% at USD71.8/bbl. Gold fell -2.8% to USD2,668.1/oz.
The USD rallied sharply on the US election outcome, but the AUD/USD managed to rebound from session lows to finish just under 0.66.
Commodities. The release of preliminary trade data for China should provide a guide as to whether recent positive economic data levels are sustainable.
Bloomberg:
Central bankers the world over are gauging whether their worst fears over Trump will come to pass.
He’s promised levies on US imports that would upend global trade, tax cuts that would further stretch the federal budget and deportations that could shrink the pool of cheap labor.
That poses two main risks: Slower economic expansion around the world and faster inflation at home that would make the Federal Reserve less willing to lower interest rates.
The win also renews questions about how fiercely he might pressure the Fed.
On the calendar today:
-Australia Sept Trade Bal
-China Oct Trade Balance
-Eurozone Sept Retail sales
-UK Bank Of England rate decision
-US FOMC rate
-Amcor ((AMC)) AGM
-Bendigo & Adelaide Bank ((BEN)) AGM
-Cooper Energy ((COE)) AGM
-National Australia Bank ((NAB)) earnings report
-Nine Entertainment ((NEC)) AGM
-nib Holdings ((NHF)) AGM
-Seven West Media ((SWM)) AGM
-Xero ((XRO)) earnings report
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
Corporate news in Australia:
-Neuren Pharmaceuticals ((NEU)) will get a third of the proceeds from selling an FDA priority review voucher awarded after its rare pediatric drug, Daybue, was approved
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2669.20 | – 82.80 | – 3.01% |
| Silver (oz) | 31.30 | – 1.45 | – 4.44% |
| Copper (lb) | 4.24 | – 0.22 | – 5.01% |
| Aluminium (lb) | 1.18 | – 0.02 | – 1.65% |
| Nickel (lb) | 7.29 | + 0.02 | 0.24% |
| Zinc (lb) | 1.34 | – 0.06 | – 4.54% |
| West Texas Crude | 71.88 | – 0.25 | – 0.35% |
| Brent Crude | 75.20 | – 0.38 | – 0.50% |
| Iron Ore (t) | 105.09 | + 1.18 | 1.14% |
The Australian share market over the past thirty days
| Index | 06 Nov 2024 | Week To Date | Month To Date (Nov) | Quarter To Date (Oct-Dec) | Year To Date (2024) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8199.50 | 0.99% | 0.48% | -0.85% | 8.02% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AD8 | Audinate Group | Downgrade to Neutral from Outperform | Macquarie |
| AMC | Amcor | Downgrade to Neutral from Outperform | Macquarie |
| LYC | Lynas Rare Earths | Downgrade to Neutral from Outperform | Macquarie |
| MIN | Mineral Resources | Downgrade to Sell from Neutral | Citi |
| NEM | Newmont Corp | Downgrade to Neutral from Buy | UBS |
| SBM | St. Barbara | Upgrade to Outperform from Neutral | Macquarie |
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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CHARTS
For more info SHARE ANALYSIS: AMC - AMCOR PLC
For more info SHARE ANALYSIS: BEN - BENDIGO & ADELAIDE BANK LIMITED
For more info SHARE ANALYSIS: COE - COOPER ENERGY LIMITED
For more info SHARE ANALYSIS: NAB - NATIONAL AUSTRALIA BANK LIMITED
For more info SHARE ANALYSIS: NEC - NINE ENTERTAINMENT CO. HOLDINGS LIMITED
For more info SHARE ANALYSIS: NEU - NEUREN PHARMACEUTICALS LIMITED
For more info SHARE ANALYSIS: NHF - NIB HOLDINGS LIMITED
For more info SHARE ANALYSIS: SWM - SEVEN WEST MEDIA LIMITED
For more info SHARE ANALYSIS: XRO - XERO LIMITED