The Overnight Report: Having A Rest

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            [0] => ((CXO))
            [1] => ((WBT))
            [2] => ((ABY))
            [3] => ((CAT))
            [4] => ((SQ2))
            [5] => ((RHC))
            [6] => ((CKF))
            [7] => ((ARX))
        )

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        (
            [0] => CXO
            [1] => WBT
            [2] => ABY
            [3] => CAT
            [4] => SQ2
            [5] => RHC
            [6] => CKF
            [7] => ARX
        )

)

This story features CORE LITHIUM LIMITED, and other companies.
For more info SHARE ANALYSIS: CXO
The company is included in ALL-ORDS

By Greg Peel

No Love

It was a surprisingly weak session on the ASX yesterday. The ASX200 opened up 14 and then tracked a near-perfect straight line downward to the close. Selling begat selling on low volumes, and buyers were a no-show.

There was no obvious catalyst. Wall Street closed flat on Friday night, Aussie bonds yields rose but only by 2-3 points, there were no data releases on the day and no other news of any great import.

It’s as if the market decided to go on holiday early this year.

No one sector stood out. All closed in the red bar technology (+0.5%), and falls were relatively consistent. The worst performers were real estate (-1.3%) and discretionary (-1.3%), with staples down -1.0%. There appears to be little confidence in Christmas shopping.

Materials fell -1.1% on a lower iron ore price and lithium is still in the doghouse. Gains for gold miners failed to offset.

Falls elsewhere ranged from communication services (-0.3%) to utilities (-0.6%), with the banks down -0.5%.

There were no train wrecks amongst individual stocks. Worst index performer was Core Lithium ((CXO)), down -4.3%, and best was Weebit Nano ((WBT)), up 5.4%, but that stock bounces around every day.

Outside of the index, indeed all the way to the All Ords, Adore Beauty ((ABY)) jumped 19.3% after knocking back an offer from a UK beauty products company.

Wearable tracking and analytics solutions provider Catapult Group International ((CAT)) rose 11.9%, after failing to draw much attention to its solid earnings result a couple of weeks ago.

Looking ahead to today, we’ll see October retail sales numbers, which will give us a better insight as to just how the consumer is feeling at this time of the year.

The big month for sales will be November, due to the insidious growth of Black Friday, which in the past couple of years has sucked Christmas buying out of the traditional month of December.

As noted yesterday, US data for Black Friday sales have surprised to the upside.

On Hold

Traders didn’t exactly come rushing back into the US market last night after the Thanksgiving break, with Wall Street posting another session very similar to Friday night’s non-committal half-session. The S&P500 again closed flat.

There was no response to an -8 point fall in the US ten-year yield, following what was described as a “soft” Treasury auction of two-years but a “solid” auction of five-years.

Nor was there any great joy in record Black Friday sales numbers, although the consumer discretionary sector was one of the better performers on the day. There is concern that coinciding with increased sales was a clear rise in the use of BNPL, suggesting lower income consumers are funding Christmas with credit.

Leading BNPL player Affirm rose 12% last night. Yet Block ((SQ2)) rose only 1%.

Credit card spending has also been growing over recent months, also leading to consternation, albeit so far bad debts have “normalised” rather than run amok.

There is a fear that once Christmas is over, the first months of the new year will see the consumer go into hiding.

New home sales fell a weaker than expected -5.6% in October, which is one reason the auction of five-year bonds was supported, according to traders. Longer-end buying implies lower rate expectations, which could be due to either lower inflation or a recession.

Volumes were similarly low on Wall Street, and the market appears to have gone into a holding pattern following a very sold November, with the S&P now up 8.6% from its October low.

With earnings season all but over, Thursday night’s PCE numbers remain as the next potential catalyst.

Commodities

The National Development and Reform Commission in China announced late on Friday it had met with major port operators to discuss iron ore inventory and storage matters, as well as to seek measures against hoarding.

Beijing’s interference in the iron ore market, because it doesn’t like higher prices, provided for the iron ore price fall yesterday. Prices have, of course, been higher due to Beijing’s stimulus measures.

Having hit US$2000/oz once more on Friday night, lower bond yields have helped gold go on with it this time, at least for now.

The Aussie continues to creep ever higher, now up 0.3% at US$0.6606.

Today

The SPI Overnight closed up 6 points.

Retail sales today, as noted.

The US will see consumer confidence and house prices.

There’s a longish list of AGMs today, mostly smaller stocks, other than Ramsay Health Care ((RHC)).

Collins Foods ((CKF)) and Aroa Biosurgery ((ARX)) report earnings.

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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