Daily Market Reports | May 01 2024
This story features WORLEY LIMITED, and other companies. For more info SHARE ANALYSIS: WOR
| World Overnight | |||
| SPI Overnight | 7593.00 | – 92.00 | – 1.20% |
| S&P ASX 200 | 7664.10 | + 26.70 | 0.35% |
| S&P500 | 5035.69 | – 80.48 | – 1.57% |
| Nasdaq Comp | 15657.82 | – 325.26 | – 2.04% |
| DJIA | 37815.92 | – 570.17 | – 1.49% |
| S&P500 VIX | 15.65 | + 0.98 | 6.68% |
| US 10-year yield | 4.69 | + 0.07 | 1.56% |
| USD Index | 106.29 | + 0.65 | 0.62% |
| FTSE100 | 8144.13 | – 2.90 | – 0.04% |
| DAX30 | 17932.17 | – 186.15 | – 1.03% |
By Greg Peel
All in Vain
Yesterday, the ASX200 eked out a further gain up to late morning and then largely stayed there for the rest of the session. Last night, Wall Street was again spooked by inflationary data and our futures are down -92 points this morning.
The major news yesterday came through March retail sales data, which showed a -0.4% fall in the month to a mere 0.2% gain for the quarter. Sales rose 0.8% year on year to mark the slowest pace of growth since the introduction of the GST 24 years ago (not counting covid).
That’s nominal growth, not adjusted for inflation, with the cost of living being the culprit.
The good news is the weak numbers all but remove any fear of another RBA rate hike, and maybe bring a 2024 cut back in the cards. The Aussie ten-year yield dropped -6 points.
Hence, consumer discretionary, where the pain of weak sales should be felt, rose 0.8% yesterday and staples 0.3%.
Economists suggest retail spending should pick up again post the July tax cuts.
Real estate was the other top performer, also with 0.8%. The banks pulled their weight with a 0.4% gain.
Materials rose 0.4%, driven largely by lithium miners. China’s manufacturing PMI for April came in at 50.4, down from 50.8 in March – still in expansion, but losing steam. The gold price has taken a dive overnight.
Energy managed a 0.1% gain despite a -7.5% plunge for Worley ((WOR)), after a major shareholder dumped its 19% stake.
Not much point in banging on, we’re in for a rough one today. I did warn about May yesterday.
Wages of Sin
Amazon reported in the US aftermarket this morning and its shares are currently up 2.5%. Chipmaker Advanced Micro Devices has reported and its shares are down -7%, while Starbucks shares are down -12%.
It’s now up to Apple tomorrow night to right the ship, as Amazon’s not going to do it, and gains posted by Google and Microsoft last week have now been eroded. Amazon was already down -3% during last night’s session.
Last night’s data showed the US Labor Department’s wage cost index rising 1.2% in the March quarter when 1.0% was forecast. Another sign of inflation, as the Fed begins its two-day meeting.
The US ten-year yield shot up 7 points to 4.69%. It was all too much for the stock market. Selling continued throughout the day and the major indices closed on their lows.
The S&P500 fell -4.2% in April and the Nasdaq -4.4%. The S&P500 is nevertheless still up 20% from the October low.
The pullback, it seems, is not over yet, but for the most part is still being described as healthy and overdue. While the Mega Techs are failing to spur the bull market further, earnings results on average are still handsomely beating.
The issue is the backdrop of the Fed, and fears there will be no rate cuts in 2024.
Tonight brings the Fed statement, and also further critical data in the form of private sector jobs and new jobless claims, ahead of non-farm payrolls on Friday night.
Commodities
The easing Chinese manufacturing PMI put a dampener on metal prices, just as pre-holiday restocking comes to a close. China will close from tomorrow until Tuesday.
China will step up support for the economy with prudent monetary and proactive fiscal policies, including interest rates and bank reserve requirement ratios, Beijing said yesterday. The comments were largely in line with expectations, including modest stimulus steps and some support for the property sector with a focus on dealing with housing inventories.
The gold price had pulled back to technical support. The jump in bond yields tipped it over the edge.
Higher yields drove the US dollar index up 0.6% which, combined with lower Aussie yields following the weak retail sales data, has the Aussie down -1.4% at US$0.6474.
Today
The SPI Overnight closed down -92 points or -1.2%.
Aside from aforementioned US data tonight, April manufacturing PMIs will be posted across the globe.
Amcor ((AMC)) has reported March quarter earnings today.
Mirvac Group ((MGR)) provides an update.
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2285.90 | – 49.50 | – 2.12% |
| Silver (oz) | 26.26 | – 0.83 | – 3.06% |
| Copper (lb) | 4.49 | – 0.08 | – 1.83% |
| Aluminium (lb) | 1.16 | – 0.00 | – 0.23% |
| Nickel (lb) | 8.66 | – 0.01 | – 0.16% |
| Zinc (lb) | 1.31 | – 0.02 | – 1.45% |
| West Texas Crude | 81.93 | – 0.70 | – 0.85% |
| Brent Crude | 87.86 | – 0.66 | – 0.75% |
| Iron Ore (t) | 117.47 | – 0.59 | – 0.50% |
The Australian share market over the past thirty days…
| Index | 30 Apr 2024 | Week To Date | Month To Date (Apr) | Quarter To Date (Apr-Jun) | Year To Date (2024) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 7664.10 | 1.16% | -2.95% | -2.95% | 0.97% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ALK | Alkane Resources | Downgrade to Hold from Accumulate | Ord Minnett |
| LYC | Lynas Rare Earths | Downgrade to Sell from Neutral | Citi |
| RRL | Regis Resources | Downgrade to Sell from Neutral | UBS |
For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.
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For more info SHARE ANALYSIS: AMC - AMCOR PLC
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For more info SHARE ANALYSIS: WOR - WORLEY LIMITED