Daily Market Reports | Apr 18 2024
This story features RENASCOR RESOURCES LIMITED, and other companies. For more info SHARE ANALYSIS: RNU
World Overnight | |||
SPI Overnight | 7665.00 | + 20.00 | 0.26% |
S&P ASX 200 | 7605.60 | – 6.90 | – 0.09% |
S&P500 | 5022.21 | – 29.20 | – 0.58% |
Nasdaq Comp | 15683.37 | – 181.88 | – 1.15% |
DJIA | 37753.31 | – 45.66 | – 0.12% |
S&P500 VIX | 18.21 | – 0.19 | – 1.03% |
US 10-year yield | 4.59 | – 0.07 | – 1.50% |
USD Index | 105.94 | – 0.41 | – 0.39% |
FTSE100 | 7847.99 | + 27.63 | 0.35% |
DAX30 | 17770.02 | + 3.79 | 0.02% |
By Greg Peel
Holding Fast
Following a modestly weak night on Wall Street, in which the Fed chair all but confirmed the unlikelihood of three rate cuts this year, the ASX200 made an attempt to bounce yesterday, up 24 points at lunchtime. But it wasn’t to be.
Let’s have anther go. Wall Street has fallen again last night but it's all about chips, with which we have little to do. The futures are up 20 points this morning.
The index largely stabilised yesterday, with all of communication services, financials, industrials and real estate closing flat, despite another 5 point rise in the ten-year yield, in line with the US.
The energy transition was in the spotlight yesterday, following the government’s controversial funding plan aimed at mimicking Biden’s massive spending.
ASX300 member Renascor Resources ((RNU)) jumped 26.5% after receiving a loan from the government to develop its graphite project.
AGL Energy ((AGL)) and Someva Renewables announced tens of millions in funding for the Hay Shire and Edward River Councils regions if the proposed Pottinger Energy Park proceeds through the NSW Government’s renewable energy development process, expected later this year.
AGL shares rose 6.4% and utilities topped the boards with a standout 2.8% gain.
The best performing sectors thereafter were consumer discretionary, up 0.4% helped by a 4.3% gain for Tabcorp ((TAH)), and technology, also up 0.4%.
Healthcare and energy were the worst performers, both down -0.5%, with materials not far behind on -0.4%. It could be a tough day today for energy, with oil prices down -3% overnight.
The fall in materials came despite ongoing strength in gold miners, with Evolution Mining’s ((EVN)) quarterly update on production and costs driving that stock up 7.5% to be index winner on the day. Another popular pick at present – De Grey Mining ((DEG)) – rose 5.4%.
Gina Rinehart’s Hancock Prospecting has become the biggest shareholder (5.82%) in Lynas Rare Earths ((LYC)) following a raid on the shares. Lynas shares rose 5.9% yesterday. Hancock is also a significant shareholder in MP Materials, which owns and operates Mountain Pass, the only integrated rare earth mining and processing site in North America.
MP Materials has previously been in merger talks with Lynas. I wonder what Albo will make of that one.
The gold price has slipped a bit overnight although base metals prices are again solid, so another mixed bag for materials today.
US bond yields also slipped for once, which may help fuel a reprieve for the local market today.
Semi Sell-Off
Europe-based ASML, also listed in New York, is one of the most important semiconductor firms in the world, producing tools known as extreme ultraviolet lithography machines, which are required to manufacture the most advanced chips globally.
After seeing a surge in orders in the December quarter, ASML’s March quarter orders were expected to shrink due to their lumpy nature, but the amount that they fell was worse than expectations and could potentially be an early warning sign for concern, analysts suggest.
“Our outlook for the full year 2024 is unchanged,” said the company’s CEO last night, “with the second half of the year expected to be stronger than the first half, in line with the industry’s continued recovery from the downturn.
“We see 2024 as a transition year with continued investments in both capacity ramp and technology, to be ready for the turn in the cycle.”
Still, ASML’s result provided a reality check for US-listed chipmakers last night, which have been driven by the AI freight train. Chipmakers make up some 9% of the S&P500 by market cap and 54% of that 9% is Nvidia; its shares last night fell -3.9%.
All chip-related stocks saw selling, and were largely responsible for the -0.6% fall in the S&P500. This is evident in the Dow’s outperformance compared to the Nasdaq.
For the third session in a row, Wall Street opened higher and closed lower.
Less than 10% of the S&P500 has reported earnings to date, and so far three-quarters have beaten estimates. Last night United Airlines posted a beat on revenue and less of a loss than expected and its shares soared 17%.
Insurance giant and Dow component Travelers revealed a robust performance featuring record growth in premiums and its shares fell -2.9%.
Having been sold down heavily since last week’s inflation data, the US ten-year finally found some buyers last night and the yield fell -7 points to 4.59%.
Netflix reports tonight.
Commodities
Spot Metals,Minerals & Energy Futures | |||
Gold (oz) | 2360.20 | – 22.00 | – 0.92% |
Silver (oz) | 28.15 | + 0.10 | 0.36% |
Copper (lb) | 4.30 | + 0.03 | 0.81% |
Aluminium (lb) | 1.16 | + 0.01 | 0.63% |
Nickel (lb) | 8.17 | + 0.15 | 1.90% |
Zinc (lb) | 1.27 | + 0.03 | 2.20% |
West Texas Crude | 82.69 | – 2.67 | – 3.13% |
Brent Crude | 87.45 | – 2.71 | – 3.01% |
Iron Ore (t) | 107.30 | + 1.23 | 1.16% |
As each day passes without Israel retaliating against Iran, oil traders are becoming less concerned. It is also assumed that even if Israel did bomb something, it would not be an Iranian oil facility.
Hence, the fall in oil prices.
For base metals it’s a case of following through on stronger than expected Chinese data.
The fall in US yields has the US dollar down finally, hence the Aussie is up 0.5% at US$0.6437.
Today
The SPI Overnight closed up 20 points or 0.3%.
We’ll see March jobs numbers today.
BHP Group ((BHP)) and Santos ((STO)) report production numbers today.
Quarterlies are due from AMP Ltd ((AMP)), Challenger ((CGF)), Endeavour Group ((EDV)) and Transurban ((TCL)).
The Australian share market over the past thirty days…
Index | 17 Apr 2024 | Week To Date | Month To Date (Apr) | Quarter To Date (Apr-Jun) | Year To Date (2024) |
---|---|---|---|---|---|
S&P ASX 200 (ex-div) | 7605.60 | -2.34% | -3.69% | -3.69% | 0.19% |
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
AVH | Avita Medical | Downgrade to Speculative Hold from Speculative Buy | Bell Potter |
CTT | Cettire | Upgrade to Buy from Hold | Bell Potter |
DRO | DroneShield | Downgrade to Hold from Buy | Bell Potter |
EDV | Endeavour Group | Upgrade to Overweight from Equal-weight | Morgan Stanley |
LGI | LGI | Upgrade to Add from Hold | Morgans |
SHV | Select Harvests | Downgrade to Hold from Buy | Bell Potter |
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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CHARTS
For more info SHARE ANALYSIS: AGL - AGL ENERGY LIMITED
For more info SHARE ANALYSIS: AMP - AMP LIMITED
For more info SHARE ANALYSIS: BHP - BHP GROUP LIMITED
For more info SHARE ANALYSIS: CGF - CHALLENGER LIMITED
For more info SHARE ANALYSIS: DEG - DE GREY MINING LIMITED
For more info SHARE ANALYSIS: EDV - ENDEAVOUR GROUP LIMITED
For more info SHARE ANALYSIS: EVN - EVOLUTION MINING LIMITED
For more info SHARE ANALYSIS: LYC - LYNAS RARE EARTHS LIMITED
For more info SHARE ANALYSIS: RNU - RENASCOR RESOURCES LIMITED
For more info SHARE ANALYSIS: STO - SANTOS LIMITED
For more info SHARE ANALYSIS: TAH - TABCORP HOLDINGS LIMITED
For more info SHARE ANALYSIS: TCL - TRANSURBAN GROUP LIMITED