Daily Market Reports | Sep 15 2022
This story features COMPUTERSHARE LIMITED, and other companies.
For more info SHARE ANALYSIS: CPU
The company is included in ASX50, ASX100, ASX200, ASX300, ALL-ORDS and ALL-TECH
| World Overnight | |||
| SPI Overnight | 6843.00 | + 9.00 | 0.13% |
| S&P ASX 200 | 6828.60 | – 181.10 | – 2.58% |
| S&P500 | 3946.01 | + 13.32 | 0.34% |
| Nasdaq Comp | 11719.68 | + 86.10 | 0.74% |
| DJIA | 31135.09 | + 30.12 | 0.10% |
| S&P500 VIX | 26.16 | – 1.11 | – 4.07% |
| US 10-year yield | 3.41 | – 0.01 | – 0.29% |
| USD Index | 109.65 | – 0.29 | – 0.26% |
| FTSE100 | 7277.30 | – 108.56 | – 1.47% |
| DAX30 | 13028.00 | – 160.95 | – 1.22% |
By Greg Peel
No Prisoners
It was a predictable Sell Everything session yesterday on the local market following Wall Street’s inflation-driven plunge. No sector was spared.
Falling the least were the defensives of healthcare (-1.6%) and utilities (-1.4%), although staples fell in line with the market (-2.2%).
Consumer discretionary (-3.1%) and technology (-3.2%) were two of the worst performers, as was the case on Wall Street, but we used to call real estate defensive as it took the hardest hit, down -4.2%.
Aside from real estate’s connection to retail, the Aussie ten-year bond yield rose 7 points to 3.6% and the assumption now is the RBA will not be in any position to slow the pace of its rate hikes in the near term, with 50 points now baked in by the market for October.
While higher rates are the enemy of REITs, they are to the benefit of banks as long as they don’t drive loan losses and falling loan demand. The market’s made its mind up on that one – the banks fell -2.9% to do serious index damage.
We were hailing the resource sectors up to yesterday but despite no notable falls in commodity prices overnight, materials fell -2.3% and energy -2.2%. That’s what you get when Sell Everything is in play.
Computershare ((CPU)) is a beneficiary of higher rates and was one of four of two hundred index stocks to close to the upside yesterday, with a whopping 1.2%.
Despite the slump in materials the coal sector was a good place to hide yesterday, with Coronado Resources ((CRN)) Whitehaven Coal ((WHC)) and South32 ((S32)) the only other winners on the day. ResMed ((RMD)) made it on to the top five by closing flat.
Rather sums things up.
Gold miners were among the biggest losers.
The good news is the index is still up for the week measured from last Wednesday’s close. Up 100 points in fact. So just a bit of a reset. Although sentiment has clearly been damaged.
A big bounce-back today? The futures are up 9 points this morning. Note that the September contract expires today.
Wholesale Relief
The US PPI fell -0.1% in August (woohoo!), as expected, to be up 8.7% annually compared to 9.8% in July. But it was all about the fall in fuel costs.
The core PPI rose by a greater than expected 0.2%, albeit the annual rate dropped to 5.6% from 5.8%.
Oil prices have consolidated since the August falls so no further relief at the headline is expected this month so far. We can at least take some heart that a lower PPI should by rights flow to a lower CPI with a lag, except for those elements that do not go down in price as fast as they go up, such as rents and wages.
Food prices were unchanged for the month.
The US ten-year yield did not rise any further last night and the US dollar pulled back -0.3%, for some mild relief.
The US is now facing transport disruption as freight train drivers plan to stop work over a wages and benefits dispute (sound familiar?). This will only serve to exacerbate supply chain problems in the near term and to top it off, Amtrak passenger trains use lines owned by freight companies and so they will be idled as well.
The PPI numbers had the Dow up 175 from the open but momentum soon waned. The Dow was down -200 heading into the final hour before a last minute rally to the close.
A pretty typical response from shell-shocked investors.
After Jerome Powell’s remarks following the July statement release, Wall Street assumed the Fed would now slow the pace of rate hikes and backed a 50 point hike in September. After Powell’s hawkish tirade at Jackson Hole quashed any such notion, a 75 point hike was favourite once more.
Since Tuesday night’s CPI release, 75 points is still at the shortest odds but 100 is finding some backers.
The September statement is due next Wednesday night.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1697.00 | – 4.90 | – 0.29% |
| Silver (oz) | 19.60 | + 0.29 | 1.50% |
| Copper (lb) | 3.61 | – 0.06 | – 1.66% |
| Aluminium (lb) | 1.12 | – 0.02 | – 1.50% |
| Lead (lb) | 0.88 | + 0.00 | 0.47% |
| Nickel (lb) | 10.93 | – 0.04 | – 0.36% |
| Zinc (lb) | 1.48 | – 0.00 | – 0.32% |
| West Texas Crude | 88.48 | + 1.17 | 1.34% |
| Brent Crude | 94.59 | + 1.10 | 1.18% |
| Iron Ore (t) | 100.51 | – 1.62 | – 1.59% |
Commodity markets love a good delayed reaction and that appears to have been the case last night based on US dollar strength.
The oils, however, are back to marching ominously higher.
The Aussie has recovered 0.2% to US$0.6749.
Today
The SPI Overnight closed up 9 points.
New Zealand will release its June quarter GDP result this morning.
Locally we have August jobs numbers.
The Bank of England meets tonight. The UK CPI unexpectedly plunged to 9.9% in August from 10.1% (lower oil prices).
The US will see retail sales and industrial production data.
Aside from the futures expiring today locally, index options will also expire and that can lead to non-fundamental volatility.
There’s a long list of ex-dividends today – mostly smaller names, other than Fletcher Building ((FBU)), IGO ((IGO)) and South32.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ALQ | ALS | Downgrade to Neutral from Outperform | Credit Suisse |
| PDL | Pendal Group | Downgrade to Accumulate from Buy | Ord Minnett |
| S32 | South32 | Downgrade to Neutral from Buy | Citi |
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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CHARTS
For more info SHARE ANALYSIS: CPU - COMPUTERSHARE LIMITED
For more info SHARE ANALYSIS: CRN - CORONADO GLOBAL RESOURCES INC
For more info SHARE ANALYSIS: FBU - FLETCHER BUILDING LIMITED
For more info SHARE ANALYSIS: IGO - IGO LIMITED
For more info SHARE ANALYSIS: RMD - RESMED INC
For more info SHARE ANALYSIS: S32 - SOUTH32 LIMITED
For more info SHARE ANALYSIS: WHC - WHITEHAVEN COAL LIMITED