Daily Market Reports | Apr 23 2024
This story features SOUTH32 LIMITED, and other companies. For more info SHARE ANALYSIS: S32
| World Overnight | |||
| SPI Overnight | 7693.00 | + 19.00 | 0.25% |
| S&P ASX 200 | 7649.20 | + 81.90 | 1.08% |
| S&P500 | 5010.60 | + 43.37 | 0.87% |
| Nasdaq Comp | 15451.31 | + 169.30 | 1.11% |
| DJIA | 38239.98 | + 253.58 | 0.67% |
| S&P500 VIX | 16.94 | – 1.77 | – 9.46% |
| US 10-year yield | 4.62 | + 0.01 | 0.17% |
| USD Index | 106.13 | – 0.02 | – 0.02% |
| FTSE100 | 8023.87 | + 128.02 | 1.62% |
| DAX30 | 17860.80 | + 123.44 | 0.70% |
By Greg Peel
And We’re Back
On Friday the ASX200 crashed -150 points in the morning following news Israel had attacked Iran, but half of those losses were recovered in the afternoon as it appeared the attack was relatively minor compared to Iran’s earlier barrage – more symbolic than destructive.
Over the weekend, it became clear Iran did not intend to retaliate again, and effectively the two sides called it a draw. Not only did recent events not escalate into something more onerous, it appears neither side is interested in any sort of war.
The ASX200 opened up 111 points yesterday before settling back to close up 81. That took us back to Thursday. It was all just a dream. The index is still some -260 points shy of its March high nonetheless.
Friday saw all sectors slammed, except for energy, which held fast on potential implications for oil prices. Yesterday saw all sectors rebounding, except for energy, which fell -1.5% as it appears any premium built into prices with regard Israel-Iran war risk may be moot.
Gold has also taken a dive for similar reasons. While Friday saw gold miners among the main gainers against the tide, yesterday saw the opposite. Three of the top five index losers were gold miners.
Materials still managed to rally 1.1%, amidst relatively uniform gains for the sectors following Friday’s relatively uniform losses. South32 ((S32)) topped the boards with a 5.6% jump following its production report.
The Aussie ten-year yield rallied back 6 points, but that was ignored.
Healthcare led the way with a 2.0% gain, followed by communication services (+1.7%), industrials (+1.5%) and technology (+1.5%).
On only a 1.0% gain, the banks and utilities were the “worst” performers (ex-energy).
With dust now settled, we can get back to worrying about tomorrow’s CPI data, and to keeping an eye on US Mega Tech earnings results.
Wall Street has staged a similar rebound overnight, but we got there first, so our futures are only up 19 points this morning.
Ditto
For all the above reasons, Wall Street rebounded last night as well. However, there was a distinct difference between the Australian and US markets.
On Friday night, the S&P500 fell sharply but it was all driven by tech – specifically chipmakers, and to a lesser extent the Big Tech names. The Dow industrials actually rallied, as did other sectors within the S&P500.
In Australia, it was just “sell everything”, and then yesterday was “buy everything back”. Last night on Wall Street it was a case of “buy everything anyway”. All S&P500 sectors closed in the green (including energy).
The rebound did slightly fizzle towards the close. The S&P was up 1.4% heading into the last hour.
Technology did nevertheless post the biggest gain (1.3%), and Nvidia, which fell -10% on Friday night to be down -13.5% from its high, jumped back 4.4%, despite concern regarding overvalued chip stocks having little to do with Middle East conflict.
Mag7 member Tesla did not join in, falling -3.4% after yet again slashing prices globally for some of its vehicles. Analysts suggest price cuts in China could wipe out all of Tesla’s earnings in that region. In response, Chinese EV-maker Li Auto slashed its prices as well.
If you’d like a cheap EV, just bide your time for now.
The Mag7 is no longer mag. Telsa is down -43% year to date and has fallen well out of the top ten most highly capitalised companies, let alone the top seven. Apple is also a loser this year, so reference now is to the Fabulous Five. Tesla reports earnings tonight.
Four of the Fab5 report earnings this week. We have to wait another month for Nvidia.
With the S&P500 now back over 5000, Wall Street can turn its attention more squarely to those earnings reports, and more importantly overall, Friday night’s PCE inflation data.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2326.90 | – 64.30 | – 2.69% |
| Silver (oz) | 27.14 | – 1.51 | – 5.27% |
| Copper (lb) | 4.44 | – 0.01 | – 0.21% |
| Aluminium (lb) | 1.20 | + 0.00 | 0.04% |
| Nickel (lb) | 8.85 | + 0.09 | 1.06% |
| Zinc (lb) | 1.27 | – 0.01 | – 0.98% |
| West Texas Crude | 82.85 | – 0.29 | – 0.35% |
| Brent Crude | 87.14 | – 0.15 | – 0.17% |
| Iron Ore (t) | 108.62 | + 0.37 | 0.34% |
Removing, to some extent, an Israel-Iran risk premium has sent gold down sharply.
The oils haven’t exactly crashed, but nor have they soared on fears of crippled Iranian supply.
The US dollar is steady but the Aussie is up 0.4% at US$0.6450. Maybe we saw some foreign buying in the stock market yesterday.
Today
The SPI Overnight closed up 19 points or 0.3%.
Flash estimates of April PMIs are due across the globe today/night.
Northern Star Resources ((NST)), Stanmore Resources ((SMR)) and Strike Energy ((STX)) provide production reports today.
Brambles ((BXB)) updates for the March quarter.
The Australian share market over the past thirty days…
| Index | 22 Apr 2024 | Week To Date | Month To Date (Apr) | Quarter To Date (Apr-Jun) | Year To Date (2024) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 7649.20 | 1.08% | -3.14% | -3.14% | 0.77% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ANZ | ANZ Bank | Downgrade to Sell from Neutral | Citi |
| AOF | Australian Unity Office Fund | Upgrade to Buy from Hold | Ord Minnett |
| BGL | Bellevue Gold | Downgrade to Neutral from Outperform | Macquarie |
| BWP | BWP Trust | Upgrade to Buy from Sell | UBS |
| EVN | Evolution Mining | Downgrade to Neutral from Outperform | Macquarie |
| NWL | Netwealth Group | Downgrade to Sell from Neutral | Citi |
| PLS | Pilbara Minerals | Downgrade to Hold from Add | Morgans |
| VSL | Vulcan Steel | Downgrade to Neutral from Buy | UBS |
| WBC | Westpac | Downgrade to Sell from Neutral | Citi |
| WHC | Whitehaven Coal | Upgrade to Add from Hold | Morgans |
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: BXB - BRAMBLES LIMITED
For more info SHARE ANALYSIS: NST - NORTHERN STAR RESOURCES LIMITED
For more info SHARE ANALYSIS: S32 - SOUTH32 LIMITED
For more info SHARE ANALYSIS: SMR - STANMORE RESOURCES LIMITED
For more info SHARE ANALYSIS: STX - STRIKE ENERGY LIMITED