Daily Market Reports | 9:17 AM
This story features FONTERRA SHAREHOLDERS FUND, and other companies. For more info SHARE ANALYSIS: FSF
SPI futures are suggesting a cautious open awaits the ASX on Wednesday morning.
| World Overnight | |||
| SPI Overnight | 8216.00 | + 8.00 | 0.10% |
| S&P ASX 200 | 8231.00 | + 39.10 | 0.48% |
| S&P500 | 5842.91 | + 6.69 | 0.11% |
| Nasdaq Comp | 19044.39 | – 43.71 | – 0.23% |
| DJIA | 42518.28 | + 221.16 | 0.52% |
| S&P500 VIX | 18.71 | – 0.48 | – 2.50% |
| US 10-year yield | 4.79 | – 0.02 | – 0.31% |
| USD Index | 109.07 | – 0.37 | – 0.34% |
| FTSE100 | 8201.54 | – 22.65 | – 0.28% |
| DAX30 | 20271.33 | + 138.48 | 0.69% |
Good morning.
Investors better stick with low expectations as market sentiment has been dented severely by the sideways-with-volatility trajectory of global equities since that initial euphoria post Trump re-election evaporated unceremoniously.
Overnight, US equities staged a mini-rally as the PPI didn’t disappoint, but ultimately caution took dominance yet again ahead of today’s CPI update.
At least the bond market enjoyed relative stability, which caused no more troubles elsewhere.
Headline producer prices in the US (PPI) rose 0.2% month-over-month in December; a weaker rise than consensus expectations.
Even more encouraging was the muted 0.1% rise in core prices, the second consecutive month of subdued gains.
In commodities, Iron ore rose 1.9% overnight to US$100.88 a tonne, extending Tuesday’s rally.
Brent crude fell -1.2% to trade at US$80.06 a barrel. The USD softened overnight, though the AUD/USD finished the session below 0.62.
On the calendar today:
-Eurozone Nov Industrial Production
-UK Dec CPI, PPI
-US Dec CPI
-TWR ex-div 5.00c
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
Corporate news in Australia:
-The Fonterra Shareholders’ Fund ((FSF)) shares will cease trading on the Australian sharemarket next month after its request to delist was approved
-Ingenia Communities Group ((INA)) has upgraded its guidance for FY25
-Macquarie Asset Management ((MQG)) invests up to $8.09bn in Applied Digital’s AI data centres
-Car Group ((CAR)) exits Australian tyre businesses, confirms FY25 guidance
-PWR Holdings’ ((PWH)) C&R Racing lands $8.9M US government order for cooling solutions
-Arafura Rare Earths ((ARU)) secures $200m from Australia to develop a mine and processing facility for critical minerals
-Mesoblast ((MSB)) raises $260m to launch Ryoncil in the US and support manufacturing and development
-Telstra ((TLS)) to spend $700m rolling out AI across its business
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2689.09 | + 5.02 | 0.19% |
| Silver (oz) | 30.53 | + 0.28 | 0.93% |
| Copper (lb) | 4.35 | + 0.00 | 0.08% |
| Aluminium (lb) | 1.16 | + 0.00 | 0.04% |
| Nickel (lb) | 7.00 | 0.00 | 0.00% |
| Zinc (lb) | 1.29 | + 0.01 | 0.49% |
| West Texas Crude | 76.56 | – 0.40 | – 0.52% |
| Brent Crude | 80.14 | – 0.41 | – 0.51% |
| Iron Ore (t) | 99.99 | + 1.27 | 1.29% |
By Samer Hasn, Senior Market Analyst at XS.com
Gold is supported by high uncertainty in both the US stock and bond markets, as well as in international markets with the potential escalation of trade wars.
In the US, the uncertainty comes from pessimism about the impossibility of cutting interest rates until the end of the first half of this year, in light of accelerating inflation and bullish fears of it, with the anticipation of protectionist policies that may be implemented with Donald Trump’s return to the White House in a week.
These inflationary factors would have put pressure on gold to decline with the rise in bond yields, but the relatively high uncertainty in the Treasury market is reducing the impact of higher yields, according to the World Gold Council.
The weak attractiveness of Treasuries in turn comes from concerns that may worsen under Trump regarding the deficit and rising government debt.
Prolonged high interest rates could also raise concerns about companies’ ability to adapt to tighter monetary conditions.
These concerns may be dispelled or activated this week with the unofficial start of the corporate earnings season, which will begin with the announcement of the results of the major banks for the fourth quarter of the last year.
Also, the Consumer Price Index figures that we will see tomorrow may help to strengthen expectations about the future path of monetary policy.
If the results do not match expectations, we may see a deepening of stock market correction, which may coincide with the decline in the attractiveness of high-yield bonds, which will make it easier for gold to reach its historic peak.
If the results don’t live up to expectations, we could see a deepening of the stock market correction, which could coincide with the decline in the attractiveness of high-yield bonds, making it easier for gold to reach its all-time high.
According to the Wall Street Journal, citing analysts, the quarterly results will need to be bright across all sectors of the market, not just those of tech, to enable stocks to regain their upward trend.
With Trump also returning, the focus is shifting to China and the trade policies that will be taken to limit its exports to the United States.
The blow that could be taken by exports could deepen concerns about the ability of the Chinese economy to restore growth amid a weak domestic demand environment.
While Chinese companies are in the worst position to face the huge tariffs from the United States, according to the Wall Street Journal.
This disruption in trade between the two economic poles is likely to create further conflicts between China and countries that will try to prevent the increase in the flow of exports from the former. I think this is what could cause more economic trouble for both sides of the trade.
These concerns combined have fueled gold buying by investors, especially in Asia, last December, according to the World Gold Council.
What investors will also be waiting for is the crystallisation of the impact of government support measures on the Chinese economy and the extent of the recovery in domestic demand.
While a recovery in consumer and domestic investor sentiment could reduce the appeal of gold.
In the Middle East, we are likely to see an explosion of conflict, whether on the Yemeni or Iranian fronts or both, with the return of Trump.
I think the impact of this escalation may be temporary and limited, given the weakness that Iran suffers from, both militarily and economically.
The Australian share market over the past thirty days
| Index | 14 Jan 2025 | Week To Date | Month To Date (Jan) | Quarter To Date (Jan-Mar) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8231.00 | -0.76% | 0.88% | 0.88% | 0.88% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ANZ | ANZ Bank | Upgrade to Equal-weight from Underweight | Morgan Stanley |
| NWL | Netwealth Group | Downgrade to Sell from Neutral | Citi |
| SCG | Scentre Group | Upgrade to Buy from Neutral | Citi |
| WBC | Westpac | Downgrade to Underweight from Equal-weight | 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)
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CHARTS
For more info SHARE ANALYSIS: ARU - ARAFURA RARE EARTHS LIMITED
For more info SHARE ANALYSIS: CAR - CAR GROUP LIMITED
For more info SHARE ANALYSIS: FSF - FONTERRA SHAREHOLDERS FUND
For more info SHARE ANALYSIS: INA - INGENIA COMMUNITIES GROUP
For more info SHARE ANALYSIS: MQG - MACQUARIE GROUP LIMITED
For more info SHARE ANALYSIS: MSB - MESOBLAST LIMITED
For more info SHARE ANALYSIS: PWH - PWR HOLDINGS LIMITED
For more info SHARE ANALYSIS: TLS - TELSTRA GROUP LIMITED