Daily Market Reports | Jan 16 2024
This story features HUB24 LIMITED, and other companies.
For more info SHARE ANALYSIS: HUB
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight | 7444.00 | – 22.00 | – 0.29% |
| S&P ASX 200 | 7496.30 | – 2.00 | – 0.03% |
| S&P500 | 4783.83 | + 3.59 | 0.08% |
| Nasdaq Comp | 14972.76 | + 2.58 | 0.02% |
| DJIA | 37592.98 | – 118.04 | – 0.31% |
| S&P500 VIX | 13.25 | + 0.81 | 6.51% |
| US 10-year yield | 3.95 | – 0.03 | – 0.68% |
| USD Index | 102.60 | + 0.16 | 0.16% |
| FTSE100 | 7594.91 | – 30.02 | – 0.39% |
| DAX30 | 16622.22 | – 82.34 | – 0.49% |
By Rudi Filapek-Vandyck
Greg Peel will return later this month.
The USA commemorated Martin Luther King Jr, so the rest of us looked to Europe for price action and signals overnight.
The key narrative hasn't changed. How soon will we see central bankers change policy to support economic growth? Last night, Germany posted negative GDP growth for the December quarter with growth for the preceding quarter revised upwards to zero growth.
But central bankers were quick to pour cold water over any forecasts this will see rate cuts happening soon. Euro area industrial production fell -0.3% m/m in November.
In response, bond yields moved up a notch. Equities and energy futures retreated while the USD strengthened somewhat. Base metals were mixed. Iron ore continues to flounder.
Nothing spectacular, and volumes are thin, as they have been in Australia.
SPI futures are signalling a weakish start for the ASX at 10am.
On the calendar today are consumer sentiment, locally, and several economic data releases from China. Hub24 ((HUB)) is scheduled to release a quarterly update while Rio Tinto ((RIO)) will provide details on its production performance in the December quarter.
Picking yesterday's winners required jumping on the uranium euphoria bandwagon, while retailer Super Retail provided an operational update that was well received. Lithium miners revisited yet again the bottom of the day's performance table.
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2059.00 | + 5.40 | 0.26% |
| Silver (oz) | 23.39 | + 0.03 | 0.13% |
| Copper (lb) | 3.78 | + 0.04 | 1.07% |
| Aluminium (lb) | 0.99 | – 0.01 | – 0.83% |
| Nickel (lb) | 7.24 | – 0.04 | – 0.59% |
| Zinc (lb) | 1.15 | + 0.02 | 1.93% |
| West Texas Crude | 72.46 | – 0.22 | – 0.30% |
| Brent Crude | 78.12 | – 0.17 | – 0.22% |
| Iron Ore (t) | 127.50 | – 2.10 | – 1.62% |
Rania Gule market analyst at Xs.com reports:
Oil prices retreated during Monday's trading, reaching US$71.80 per barrel, despite several geopolitical factors supporting an upward trend.
I believe the markets have overlooked these factors as they currently have minimal impact on oil supplies. However, the primary concern remains the potential retaliation or action by China against the election results in Taiwan, where the ruling Democratic Party claimed further sovereignty and independence.
Simultaneously, world leaders are gathering at Davos for the World Economic Forum, holding side meetings to discuss hot topics such as Ukraine, Taiwan, the Red Sea, and tensions in Gaza. The Dollar Index (DXY) is trading sideways as markets await any new developments in these global hotspots.
The slight decline in the strength of the U.S. dollar is likely due to economic data no longer consistently surpassing expectations, especially as some indicators begin to contract. In contrast, U.S. labor market data remains strong.
Oil traders seem unfazed by the repeated attacks on ships in the Red Sea. The real concern lies in the event of a clash with Iran and the potential closure of the Strait of Hormuz, which could result in a roughly 20% increase in oil prices.
Reports of increased oil production by OPEC in December are deepening oil losses, with a decline of over -3.1%, despite ongoing concerns about the impact of supply disruptions in the Red Sea. The U.S. Energy Information Administration announced that non-OPEC-Plus production growth would slow to 1.1 million barrels per day by 2024. Additionally, OPEC-Plus crude oil production is expected to decrease by 600,000 barrels per day in 2024, leading to an average daily global oil inventory shortfall of -800,000 barrels in the first quarter of 2024. This makes a return to higher prices likely in the short to medium term.
The World Bank expects global economic growth of around 2.4% in 2024, unchanged from June 2023 estimates. However, it lowers its growth forecast for the next year from 3% to 2.7%, citing "regrettably low" global GDP growth rates by the end of 2024, the lowest and slowest in 30 years. This puts negative pressure on oil prices and supports safe-haven assets.
Liquefied natural gas (LNG) prices in North Asia have dropped to their lowest level in almost 7 months, around US$9.80 per million British thermal units, due to expectations of moderate weather and rising inventories.
In my opinion, the attacks in Yemen are likely to escalate tensions across the Middle East and expand the conflict area if the situation in Gaza is not contained. Amid these tensions, caution should be exercised, especially regarding a strong rise in oil or gold prices, which could occur at any moment based on any new developments.
The Australian share market over the past thirty days…
| Index | 15 Jan 2024 | Week To Date | Month To Date (Jan) | Quarter To Date (Jan-Mar) | Year To Date (2024) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 7496.30 | -0.03% | -1.24% | -1.24% | -1.24% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AWC | Alumina Ltd | Downgrade to Neutral from Buy | Citi |
| BEN | Bendigo & Adelaide Bank | Downgrade to Sell from Neutral | Citi |
| BOQ | Bank of Queensland | Downgrade to Sell from Neutral | Citi |
| GL1 | Global Lithium Resources | Upgrade to Outperform from Neutral | Macquarie |
| HLS | Healius | Downgrade to Underweight from Equal-weight | Morgan Stanley |
| IFL | Insignia Financial | Downgrade to Underweight from Equal-weight | Morgan Stanley |
| VCX | Vicinity Centres | Downgrade to Underweight from Equal-weight | Morgan Stanley |
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For more info SHARE ANALYSIS: HUB - HUB24 LIMITED
For more info SHARE ANALYSIS: RIO - RIO TINTO LIMITED