The Overnight Report: Coasting

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

By Greg Peel

All Happening

The futures said up 4 points, the ASX200 jumped to up 40 points by 11am, and an hour later was back where it started. Not sure what happened yesterday morning, but it was a day packed with lots of corporate news, from earnings results to M&A.

Alcoa has, after 20 years, made a bid for Australian JV partner Alumina Ltd ((AWC)). Alumina shares rose 6.8%.

Fresh from adding 18.6% to its value on Friday post result, Aussie Broadband has made a bid for Superloop ((SLC)), which rose 14.3%.

And CSR ((CSR)) has gone into a trading halt, with the French sniffing around.

Kogan ((KGN)) topped the winners circle amongst ASX300 stocks, jumping 23.7% on its result and reinstated dividend. Adairs ((ADH)) gained 15.0% on its result. Where’s this consumer slowdown all were anticipating? Lovisa Holdings ((LOV)) added 7.1% on top of Friday’s move. Zip Co ((ZIP)) shares rose 7.5%

Serial underperformer Mayne Pharma ((MYX)) gained 14.9% on result.

In the Battle of the Duds, results did not go well for Nanosonics ((NAN)), down -16.0%, TPG Telecom ((TPG)), down -8.0%, and nib Holdings ((NHF)), down -5.6%.

Looking at the ASX200 sectors, consumer discretionary was the best performer (+1.1%).

The banks plugged away (+0.6%), as did healthcare (+0.7%), while real estate was remarkably flat given a -10 point fall in the Aussie ten-year, following US bonds.

Energy stood out as the worst performer (-2.1%). Oil prices fell overnight but Santos ((STO)) went ex-div. Utilities lost -0.8%.

Materials (-0.4%) balanced out a weaker iron ore price with another up-day for lithium and some strength for gold. 29Metals ((29M)), which is an All-Ord, rose 29.6% having reported on Friday.

As has been the theme of the result season to date, share prices are flying around everywhere on result releases but the net result is zero, pretty much. On January 31, the index was only a little higher than it is now.

There have been a few ups and downs in between, admittedly. But now we have Wall Street in a post-Nvidia funk as well.

It doesn’t look like today will be any more exciting – the futures are down -4 points this morning – but then we still have plenty of results on the calendar.

Today’s reporters include Coles Group ((COL)) and Woodside Energy ((WDS)).

Lack of Intelligence

The big story on Wall Street last night, as indices again opened positively but drifted back to a slightly weak close, was a -4% fall for Google.

After Microsoft had blindsided Google when ChatGPT burst on to the scene, Google rushed out its own version but was met with an underwhelming response. Now Gemini has been caught providing silly answers, and in some case morally offensive answers, to questions ChatGPT handles a lot better.

It should be recognised the “intelligence” part of AI is a misnomer. It’s still just a machine.

More ominously for Google is a prediction by one analyst that old-fashioned search engines – a field which Google far and away dominates – will see up to a -25% reduction in usage in just the next two years.

But hey, Google only recently hit a 52-week high.

Fans of the Dow Jones will be interested to know Amazon was added to the average last night, at the expense of Walgreens Boots. It wasn’t that long ago Walgreens replaced founding member General Electric.

While it seems Amazon should have been included in the Dow years ago, its share price was simply too expensive. A few stock splits have seen to that. And now Dow incumbent Walmart has implemented a 3-1 split, which will reduce its influence in the price average to a third of what it was.

I’m reporting this stuff out of interest, because there’s nothing more to say about last night’s session. Wall Street is now in pause-mode, having safely navigated Nvidia’s result, and ahead of Thursday night’s PCE inflation data.

Commodities

Iron ore futures fell yesterday to their lowest level in four months as higher inventories in China and slower construction activity due to unfavourable weather raised demand concerns.

Oil prices bounced back, attributed to new sanctions placed on Russian shipping by the US/EU.

After grafting its way higher, the Aussie is down -0.4% at US$0.6542.

Today

The SPI Overnight closed down -4 points.

The US will see numbers for consumer confidence, durable goods orders and house prices tonight.

Along with today’s still sizeable list of reporting companies, Amcor ((AMC)) goes ex-div.

FNArena's Corporate Results Monitor: https://fnarena.com/index.php/reporting_season/ (with calendar).

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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