The Overnight Report: Still Nothing

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This story features CSL LIMITED, and other companies.
For more info SHARE ANALYSIS: CSL
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

By Greg Peel

Shot in the Arm

With Maggie Keenan still with us so far, excitement is building over the vaccine rollout in the UK, and that has dragged CSL ((CSL)) into the mix. Pfizer/BioNTech, Moderna and AstraZeneca/Oxford Uni have stolen the spotlight for now, but let’s not forget Australia has its own vaccine candidate.

The University of Queensland admits it’s been a bit slower than the others – that’s the way we do things down here — but insists what will emerge is a more robust vaccine, with the help of partner CSL.

CSL shares rose 2.2% yesterday, while sector colleague Healius ((HLS)) rose 7.4% to top the index after updating on a couple of strong months for the company, driven by virus testing. The healthcare sector stood out yesterday with a 2.1% gain.

All sectors nevertheless closed in the green except for property (-1.1%) and energy (-0.1%).

Property’s fall seemed a bit out of place, given consumer discretionary rose 1.0% on the back of this month’s Westpac consumer confidence survey. The confidence index surged 4.1% to 112.0, up from 107.7 in November. Confidence is now up 48% from the April low and at its highest level since October 2010.

Back in 2010 we’d managed to avoid a GFC-led recession, everyone had a new flat-screen TV thanks to Pennies from Kevin, and the RBA cash rate was, OMG, as low as 4.5%.

In 2020, we appear to have all but nipped covid in the bud, we can afford to wait to see how the vaccines perform, the borders are open, we’re all home for Christmas, and we are set to unleash months of pent up frustration in the holidays.

No joy for the retail REITs yesterday though. Abacus Property ((ABP)), which these days is into self-storage, fell -3.8% yesterday to be the worst index performer after announcing a capital raise.

Materials finished higher yesterday (+0.6%) but iron ore strength was balanced out by selling in gold miners – four of which made up the top five index losers. Gold is down -US$36 overnight so another bad day ahead in the precious space.

This has fed into a -25 point fall in the futures to this morning, along with weakness on Wall Street that arguably has nothing to do with us. Such a move would end the ASX200’s winning streak at seven days.

Faceplant

The Nasdaq was tediously hitting a new all-time high last when later in the afternoon, the New York attorney general announced that she and the attorneys general of 47 other states were launching an antitrust suit against Facebook. The US Federal Trade Commission is also launching its own suit.

This news put the frighteners through Big Tech, and specifically the mega-caps that dwarf all in the major indices. Apple, Microsoft, Amazon and Google all closed lower. Facebook fell -1.9%.

That doesn’t seem like much, but it’s an awful lot of index points given the company’s size. It could have been worse if (a) Wall Street had not long been expecting such a suit and (b), history suggests such a case could take years to resolve.

But it was enough to spin the Dow from 150 points up to -100 points down at the close, with Dow culprits being Microsoft and Google.

In other news, lame duck Treasury Secretary Mnuchin shocked everyone by proposing a US$916bn stimulus package, trumping (pardon the pun) the bipartisan proposal of US$908bn. Fabulous stuff, except that it’s not just about the money, it’s also about who gets it, and the Democrats aren’t interested.

Nor would Senate majority leader Mitch McConnell be. Last night McConnell accused the Democrats of being “uncooperative” and noted no progress has been made towards any agreement. A quick look in the mirror perhaps?

Tonight the FDA presumably will approve the Pfizer vaccine for emergency use and the US rollout will swiftly begin. The Moderna vaccine is up for assessment in a week’s time.

Two vaccinated UK hospital workers have suffered allergic reactions.

Commodities

Only a small gain for iron ore last night, but it’s back over US$150/t at its eight-year high.

The US dollar index ticked up again, but the drop in the gold price has been attributed to vaccines and an ongoing lack of stimulus. A vaccine reduces economic risk but otherwise gold bugs would love to see a stimulus package in the trillions.

The Aussie rose steadily up to US$0.7480 yesterday, presumably on the consumer confidence data, before sliding back to US$0.7440 overnight, to be up 0.4% over 24 hours.

Today

The SPI Overnight closed down -25 points or -0.4% ahead of Australia’s Facebook, Google etc equivalents being carted today.

What?

We were probably due a pullback anyway.

The RBA will publish a Bulletin today.

The ECB holds a policy meeting.

The US will see November CPI data.

No scheduled events of note on the corporate calendar today.

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.

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