The Overnight Report: Loser

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This story features RESMED INC, and other companies.
For more info SHARE ANALYSIS: RMD
The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

By Greg Peel

Relief, Not for Long

The local market managed to ignore selling in chipmakers on Wall Street on Wednesday night and finally bounced after a torrid few sessions. The ASX200 was up 50 points at its high before drifting back in the afternoon.

The bad news is the futures are down -55 points, or -0.7%, this morning, which is disproportionate to a -0.2% fall for the S&P500 overnight, and may suggest a large sell order will hit the market this morning.

Materials led the way yesterday (+1.0%) on gains in commodity prices but a -10 point fall in the Aussie ten-year yield provided relief for rate-sensitive sectors. While US yields were down overnight, the March jobs numbers likely had an influence.

After 117,600 jobs were added in February, March saw -6,600 lost, and the unemployment rate ticked up to 3.8% from 3.7%. Hours worked rose by 2.9% in February but only by 0.9% in March.

The RBA has been forecasting the unemployment rate to reach 4.2% by the end of the June quarter this year, note ANZ Bank economists. For that to be realised, employment needs to fall slightly in the June quarter and the unemployment rate to increase faster than it has over recent months.

ANZ still has the first rate cut coming in November.

Bank shares rose 0.7% yesterday while real estate and utilities rose 0.5% and industrials 0.4%. The consumer sectors were a little quieter and communication services fell -0.3%.

Healthcare was the worst performer in falling -0.5% and ResMed ((RMD)) the worst index performer with a -4.3% loss. Ely Lilly is conducting trials of a new drug as an alternative to treating sleep disorders.

Energy managed to fall only -0.1% despite the -3% overnight fall in oil prices.

On the positive side, Challenger's ((CGF)) quarterly update included increased guidance, and its shares rose 5.2%.

Wall Street is down again overnight to mark the longest losing streak in months, but as noted, a -0.7% fall in the futures appears overwrought against a -0.2% for the S&P500.

Netflicked

At five days, it's actually the longest losing streak for the S&P500 since the October low. Each day this week the index has been higher during the session, only to be sold off to the close.

Netflix reported earnings after the bell this morning, beat on the top and bottom lines and the shares are down -4.6%. The stock was up 25% year to date so there may be an element of sell-the-fact, but if this is how Wall Street is going to respond to 'beats', it may be a grim season.

More than 12% of S&P500 companies have now reported, according to FactSet. Of those that have already posted results, 73% have surpassed Wall Street expectations for their individual performances.

The S&P500 is down -2% week to date and the Nasdaq is down -3%.

The S&P traded as low as 5001 last night but traders have their eyes on the 4983 level, from which the index saw the "Nvidia gap" the index gapped up in February after Nvidia reported December quarter earnings.

Not helping the mood last night was a 6 point rise in the US ten-year to 4.65%, following some relief in yields on Wednesday night.

The New York Fed president said last night there's "no rush" to lower interest rates and economic data will determine the timing.

Tesla, Google, Meta, Amazon and Microsoft report next week.

Commodities

Beijing's monetary and fiscal policy support, including two pledges to issue bonds, will keep China's broad economy humming this year, said Thomas Helbling, a division chief in the IMF's Asia and Pacific Department. He also pointed to infrastructure spending.

"We see a moderate slowing of growth in 2024 as the pandemic effect will wane and China will see some impact on the economy, but the government has stepped up macro support."

Although China's first quarter data showed signs of economic strength, the IMF said on Tuesday night that a four-year property slump will continue to weigh on the economy.

Good enough news, it appears.

The Aussie is down -0.2% at US$0.6426.

Today

The SPI Overnight closed down -55 points or -0.7%.

Japan's March CPI is out today.

Woodside Energy ((WDS)), Whitehaven Coal ((WHC)) and Pilbara Minerals ((PLS)) provide production reports.

The Australian share market over the past thirty days

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