The Overnight Report: Failure To Launch

This story features WOODSIDE ENERGY GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: WDS

By Greg Peel

Ironed Out

It was a quiet session on the ASX yesterday as Easter looms, albeit a volatile one. Weakness on Wall Street had the ASX200 down -36 points from the open, then the buyers stepped in and took it right back to square by midday. And then iron ore prices tanked in Asia and we went right back down again.

The materials sector, which had been up in the morning. Closed down -0.7%.

Energy went the other way, rising 0.5% on higher oil prices and news Woodside Energy ((WDS)) had sold a stake in its Scarborough gas project to the Japanese.

Staples was the only other sector to close in the green (+0.2%). That sector did not much participate in the buying on Monday. Otherwise, most everything that went up on Monday came down again.

The banks had risen only 0.2% on Monday, and fell -0.2% yesterday. Over two sessions, the index is close to square.

There was a bit more activity outside the ASX200.

Mesoblast ((MSB)) jumped 45% after the US FDA said there appear to be sufficient results to support the submission of the company's proposed Biologics License Application for its remestemcel-L medicine to treat paediatric patients with steroid-refractory acute graft versus host disease.

29Metals ((29M)) fell -26% after announcing it was suspending operations at its Capricorn copper mine in Queensland after constant battering by cyclones.

In economic news, Westpac’s consumer confidence index fell to 84.4 from 86.0, suggesting growing gloom among consumers due to high rates and ever-rising house prices. For a 100-neutral index, that’s pretty pessimistic.

Consumer discretionary posted one of the bigger losses yesterday (-1.0%).

This was despite Premier Investments ((PMV)) jumping 4.4% after announcing plans to spin of its two best performing businesses – Smiggle and Peter Alexander – into separate entities.

As we approach the holiday, we have two very solid days of cash hitting bank accounts as dividends are paid. Whether this cash will be immediately deployed is another matter.

Divs payable today include those of Ampol ((ALD)), Aurizon Holdings ((AZJ)), Coles Group ((COL)), Domino’s Pizza ((DMP)), Fortescue ((FMG)), Insurance Australia Group ((IAG)), IGO Ltd ((IGO)), Santos ((STO)) and Wesfarmers ((WES)). And that’s not all of them.

Tomorrow’s list is much longer.

Trumped

The talk on Wall Street last night was the listing of Trump Media & Technology Group, ticker DJT, after a merger with a cash box company. Trump Media owns Truth Social, and Trump’s 58% stake in the merged entity will supposedly net him US$3bn.

But that will depend on where the share price is in six months’ time, when his escrow period ends. The stock opened up 50%, and closed up 16%. In the first nine months of 2023, Trump Media made US$3.5m.

Back in the real world, the S&P500 posted its third consecutive down-session last night and its fourth featuring a fade-out to the close. The moves have only been modest so far, but the fear is they won’t remain modest if weakness continues.

Rotation is still evident, and last night the worst performing stock among the Mag7, Tesla, rose 3% and the best performing, Nvidia, fell -2.5%. There was no news from either.

Apple announced it would hold its annual shindig in June, at which it typically launches something new, either software or hardware. The CEO tweeted last night the gathering will be “Absolutely Incredible!”. There might be a hint in those initials.

Apple, the second worst performing stock among the Mag7 this year, fell -0.7%.

Sugar lovers may be aware of a company called Krispy Kreme. The doughnut specialist last night announced an expansion of its partnership with McDonalds and rose 39%.

These are highlights in an otherwise quiet session, as Wall Street limps towards Easter and the end of the March quarter. Enthusiasm is absent.

Friday’s release of the February PCE may well spark things up when trading returns on Monday night.

Commodities

The fall in the iron ore prices yesterday has been attributed not to what Beijing has done, but what it hasn’t done. Iron ore had bounced back somewhat from earlier steep falls but traders have supposedly lost patience with the Chinese government and its lack of any meaningful economic stimulus.

This was also evident in base metals price moves.

The Aussie is down -0.1% at US$0.6533.

Today

The SPI Overnight closed down -19 points or -0.2%.

Today brings our February CPI.

Earnings reports are due from Argosy Minerals ((AGY)), and Omni Bridgeway ((OBL)).

Today is that day in every quarter when REITs and other funds go ex-dividend. There’s a long list, so don’t panic when the real estate sector opens lower today.

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.

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