The Overnight Report: Edging Lower

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            [1] => ((MEA))
            [2] => ((ALX))
            [3] => ((FLT))
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            [1] => MEA
            [2] => ALX
            [3] => FLT
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This story features ATLAS ARTERIA, and other companies.
For more info SHARE ANALYSIS: ALX
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

By Greg Peel

Out of the Blue

Wall Street was flat overnight, our futures said up 7 points before the open, and just after 11am the ASX200 was up 74 points, closing in on the all-time high. It looks like a big buy order hit the market.

As the index took off, all sectors were in the green in a reasonably uniform manner, but the index sharply turned and fell back to be up around 40 points an hour later, which it held to the close. The order appears to have been filled, and the sellers stepped in. By the close, sector moves were mixed.

Holding their gains were real estate (+1.8%), energy (+1.1%), healthcare (+1.0%) and materials (+0.7%), with the big names in those sectors seeing buying. Oil prices had been lower overnight, as was the gold price, while iron ore managed only a small gain yesterday.

Missing out were utilities and discretionary, which closed flat, staples (+0.2%), industrials (+0.2%), and financials (+0.1%). So all the big names, but not the banks.

Technology was also strong (+0.9%).

No individual index stocks stood out with superior gains, with 5% enough to top the winners and -5% enough to top the losers.

There were bigger moves among smaller stocks, as the takeover binge ramps up. MMA Offshore ((MRM)), which ferries workers to gas rigs, topped the ASX300 with a 10.6% gain, while McGrath Real Estate ((MEA)) jumped 25%, but is not even all All-Ord.

A lot of cash will be flowing into pockets this week, with some big dividends reaching payment, which for institutions means reallocating that cash back into the market.

It is also the last week of the month, and of the quarter, and Thursday is an unofficial half day as everyone bails for Easter.

So we might be seeing some window-dressing, which could be risky ahead of tomorrow’s CPI print.

Wall Street slipped lower last night and our futures are down -29 points this morning, with the oils up and gold up this time, so we may resolve back to something less excitable.

Breather

Wall Street quietly slipped away last night, closing on its lows, which looked more like a lack of buying interest than anything else.

The major indices are nonetheless on track to mark a fifth consecutive month of gains.

All the Mag7s were down, except one of course. Nvidia rose 0.8%. Here’s a fun fact: For all the hype around AI this year, the equal-weighted chip ETF is flat year to date.

Intel and Advanced Micro Devices were lower as China moves to ban those chipmakers from government servers, with the next step being state-owned enterprises. China wants to be homegrown, despite its equivalents being (to date) inferior.

Beijing tried a similar move in 2019, but it didn’t work.

The market in general may be squaring up ahead of Friday’s PCE inflation numbers, but it will not be able to respond until Monday. To complicate matters, Monday is the start of a new month and new quarter.

If the PCE comes in hot, the expectation is Wall Street won’t panic, as this would only confirm the hotter CPI and PPI numbers earlier this month, for which Wall Street adjusted. And then it went on to set further new records.

It will only be another couple of weeks and Wall Street will be in to the March quarter result season, which is where the rubber really hits the road. The market has become comfortable with only three, or maybe even two, Fed rate cuts this year, but can earnings justify all-time highs?

Commodities

Russia has ordered companies to cut oil output to meet Moscow’s commitments to OPEC-Plus. Several OPEC-Plus countries have agreed to voluntary production cuts totalling -2.2m barrels per day through the second quarter.

Ukraine also conducted drone strikes on another Russian refinery last night, knocking out a major unit.

The Aussie is up 0.4% at US$0.6542.

Today

The SPI Overnight closed down -29 points or -0.4%.

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

Atlas Arteria ((ALX)) and Flight Centre ((FLT)) go ex.

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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