Daily Market Reports | Dec 23 2022
This story features 29METALS LIMITED, and other companies.
For more info SHARE ANALYSIS: 29M
The company is included in ALL-ORDS
| World Overnight | |||
| SPI Overnight | 7034.00 | – 66.00 | – 0.93% |
| S&P ASX 200 | 7152.50 | + 37.40 | 0.53% |
| S&P500 | 3822.39 | – 56.05 | – 1.45% |
| Nasdaq Comp | 10476.12 | – 233.25 | – 2.18% |
| DJIA | 33027.49 | – 348.99 | – 1.05% |
| S&P500 VIX | 21.97 | + 1.90 | 9.47% |
| US 10-year yield | 3.67 | – 0.02 | – 0.41% |
| USD Index | 104.45 | + 0.28 | 0.27% |
| FTSE100 | 7469.28 | – 28.04 | – 0.37% |
| DAX30 | 13914.07 | – 183.75 | – 1.30% |
By Greg Peel
No One Playing
The local market kicked on yesterday following Wednesday’s gains and similar strength on Wall Street, opening up about where it ultimately closed. Not much happened in between. Less will happen today, ahead of an early close, but we’ll see some give-back.
A spooked Wall Street overnight has our futures down -66 this morning.
But for the record…
Local investors ignored a 7 point rally in the Aussie ten-year to 3.79% yesterday. Real estate rose 0.9%, utilities 1.6%, healthcare 1.3% and communication services 1.1%, and even technology rose 1.4%, as bargain hunters continued with some last minute shopping.
The banks still kind of like higher rates, and they rose 0.6%.
For once the resources sectors sat it out, with energy flat and materials falling -0.2%, to be the only losing sector in the session.
The sector was somewhat rattled by a -22.1% fall for gold/silver producer, with a sideline in copper/zinc, 29Metals ((29M)), following a significant production downgrade. Macquarie downgraded to Sell on the numbers to make three Sells out of five among covering FNArena database brokers. 29Metals is not in the index, but the reverberations were clear.
Lithium and coal stocks were also weak.
Meanwhile, OZ Minerals ((OZL)) has agreed to be taken over by BHP Group ((BHP)), but now it’s over to the regulators.
Which is about all that’s worth talking about. Three men and a dog will be in operation today, and they’ll probably head off at lunchtime.
Unwanted Stocking Fillers
It’s not often a final revision of US GDP much moves Wall Street, but that was the case last night for a trigger-happy market.
Economists had forecast the revision to come in the same as the last revision, at 2.9%, but it came in at 3.2%.
To recap, the US first estimates a quarterly GDP by taking the data from month one and extrapolating that across three months. The first revision incorporates month two, and the result is re-extrapolated, before month three is finally added in for a true result. This particular revision suggests the month of September was a lot stronger than assumed.
The core PCE inflation measure within the numbers was revised up to 4.7% from 4.6%. Just when Wall Street thought the Fed might be able to back off, this took the wind out of the sails.
This was not all that upset Wall Street last night.
Early in the session, renowned hedge fund manager David Tepper appeared on CNBC with some downbeat commentary:
“I would probably say I’m leaning short on the equity markets right now because the upside-downside doesn’t make sense to me when I have so many people, so many central banks, telling me what they are going to do, what they want to do, what they expect to do.”
When Tepper talks, Wall Street listens.
Leading chipmaker Micron last night reported earnings, showing a halving in revenues and a loss for the quarter given lower prices for its products. Micron will also lay off -10% of its employees and executives will take salary cuts.
Sounds like a recession. Micron led all the chipmakers down.
Tesla is offering discounts on its Model 3 and Model Y EVs due to weaker demand. See above. Tesla led all auto stocks down. While the high cost of living is reason enough to lead to discounting, commentators wonder whether Musk’s Twitter tomfoolery is leading to brand damage.
The Micron/Tesla stories were backed up by a leading economic indicator that showed a -1% fall in growth in November. September up, November down, what do we make of it?
The US ten-year yield fell -2 points and the two-year rose 6 points.
I’ve never been a fan of these leading indicators as a large part of their index is the stock market itself. So if the stock market responds poorly to the index, it is reacting poorly to the stock market. But the Dow was down -800 points at the low of the session.
The recovery to be down only -350 by the close does bring some relief. Maybe Wall Street has been nice this year after all.
The S&P500 did fall below support at 3800, which exacerbated early selling, but has mercifully closed above.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1793.20 | – 20.70 | – 1.14% |
| Silver (oz) | 23.48 | – 0.44 | – 1.84% |
| Copper (lb) | 3.75 | – 0.03 | – 0.85% |
| Aluminium (lb) | 1.17 | – 0.00 | – 0.25% |
| Lead (lb) | 1.02 | + 0.02 | 2.09% |
| Nickel (lb) | 12.80 | + 0.01 | 0.10% |
| Zinc (lb) | 1.36 | – 0.03 | – 1.87% |
| West Texas Crude | 78.07 | – 0.44 | – 0.56% |
| Brent Crude | 81.48 | – 0.97 | – 1.18% |
| Iron Ore (t) | 110.43 | – 0.31 | – 0.28% |
A winter freeze has descended upon the US, with temperatures hitting -50 in Iowa and no sign of much change over the weekend. While this means heaters will be working overtime, it also means Christmas travel will be stymied. Already 2000 flights have been cancelled.
The net result is small falls in oil prices.
The US dollar index is up 0.3% on the GDP numbers, weighing on commodities prices. The Aussie is down -0.5% at US$0.6671.
Today
The SPI Overnight closed down -66 points or -0.9%.
The ASX will close at 2.10pm today.
Tonight’s US November PCE result has become rather make-or-break, in what will also be a thin market.
The US will also see numbers for new home sales, durable goods orders and consumer sentiment, any of which could spook investors.
This is the last Overnight Report for 2022. I’ll be off on my annual break now, and the Report will return later in January.
FNArena’s daily service will take a two-week break but the website will be fully accessible over the period.
Merry Christmas and Happy New Year to all.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| 29M | 29Metals | Downgrade to Underperform from Outperform | 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)
All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com
FNArena is proud about its track record and past achievements: Ten Years On
Click to view our Glossary of Financial Terms
CHARTS
For more info SHARE ANALYSIS: 29M - 29METALS LIMITED
For more info SHARE ANALYSIS: BHP - BHP GROUP LIMITED