Daily Market Reports | May 31 2024
This story features BHP GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: BHP
| World Overnight | |||
| SPI Overnight | 7705.00 | + 50.00 | 0.65% |
| S&P ASX 200 | 7628.20 | – 37.40 | – 0.49% |
| S&P500 | 5235.48 | – 31.47 | – 0.60% |
| Nasdaq Comp | 16737.08 | – 183.50 | – 1.08% |
| DJIA | 38111.48 | – 330.06 | – 0.86% |
| S&P500 VIX | 14.47 | + 0.19 | 1.33% |
| US 10-year yield | 4.55 | – 0.07 | – 1.51% |
| USD Index | 104.75 | – 0.36 | – 0.34% |
| FTSE100 | 8231.05 | + 47.98 | 0.59% |
| DAX30 | 18496.79 | + 23.50 | 0.13% |
No Chris Weston commentary today (he's back on Monday).
Scenes of people jubilating in the streets are swirling around on X (formerly Twitter) this morning.
Has any of the wars in the Ukraine or Gaza been concluded?
Negative. For the first time in history a former President of the USA has been found guilty of criminal charges.
If ever we were looking for a sign of our times on this planet…
In financial news, weak economic data suggesting higher-for-longer interest rates are having an impact on US economic momentum, failed to inspire US equities overnight.
It didn’t help that one of the tech stalwarts, Salesforce, disappointed with its market update and saw its share price being shellacked (-19.7%).
Nvidia shares weakened too (-3.8%), as did Microsoft (-3.4%).
A second read on US Q1 GDP was revised down to 1.3% from 1.6%, with private consumption revised down to 2.0% from 2.5%.
The core PCE deflator was revised down a tenth to 3.6%. The advanced trade good deficit for April showed an unexpected s increase to -US$99.4bn, with NAB economists pointing out this likely means another contraction in net exports for Q2.
Pending home sales fell sharply by -7.7% m/m in April to a four-year low. Initial jobless claims rose by 3,000 to 219,000.
The US 10yr fell -6.4bps to 4.55%, ditto the 2yr -4.8bps to 4.92%, but it failed to put any forward momentum into crude oil markets and/or US equities.
US indices retreated between -1.08% (Nasdaq) and -0.60% (S&P500).
Base metals traded lower. Gold held up, inspired by weakening Treasury yields and a weakening USD. The AUD rose slightly to US66.33c.
Crude oil futures weakened despite US inventory data showing a larger-than-expected decline.
Over in Europe, the Euro area unemployment rate fell to 6.4%, its lowest level since the formation of the currency bloc.
The ECB is seen as ready to start cutting interest rates, but opinions vary wildly about what it means, exactly, and whether there will be quick follow-through.
Orla Garvey, Senior Portfolio Manager for Fixed Income at Federated Hermes Limited:
“The ECB is likely to begin its easing cycle next week, with a widely anticipated 25 basis point cut. This is all but fully priced by rates markets, but what comes after the next rate cut will be more difficult for the ECB to communicate and for markets to price.
“While significant progress has been made on bringing inflation back to target, from the highs of 10% in 2023 to 2.4% as per the April print, the path of inflation going forward is likely to be more turbulent.
“Combine this with an improving growth outlook across the Eurozone, markets may be less confident of the future path of ECB base rates, and lean towards pushing out some cuts in 2025 – as has been the case in recent weeks.”
European markets had a positive session, with gains led by real estate (+1.9%) and telecom stocks (+1.6%).
Inflation in Spain surprised to the upside.
SPI futures are suggesting a positive day for the local bourse ahead.
In local corporate news:
BHP Group’s ((BHP)) attempt to acquire Anglo American is dead in the water. For now.
Rio Tinto ((RIO)) will keep its New Zealand aluminum smelter operating until at least 2044 after agreeing new electricity supply agreements.
Japan will loan Woodside Energy ((WDS)) $1 billion to develop a natural gas project in Australia.
Looking Ahead in Australia:
-Private sector credit data to be released
-Select Harvests ((SHV)) to update earnings report
-Nickel Industries ((NIC)) to host its AGM
Upcoming in China:
-Chinese purchasing managers' indexes (PMIs)
Upcoming in the US:
-Personal income and spending data
-PCE core deflator (inflation)
-MNI Chicago PMI
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2342.60 | + 6.20 | 0.27% |
| Silver (oz) | 31.11 | – 0.77 | – 2.42% |
| Copper (lb) | 4.56 | – 0.15 | – 3.24% |
| Aluminium (lb) | 1.22 | – 0.04 | – 3.08% |
| Nickel (lb) | 9.05 | – 0.18 | – 1.97% |
| Zinc (lb) | 1.38 | – 0.02 | – 1.54% |
| West Texas Crude | 77.87 | – 1.41 | – 1.78% |
| Brent Crude | 81.94 | – 1.44 | – 1.73% |
| Iron Ore (t) | 117.62 | – 0.12 | – 0.10% |
The Australian share market over the past thirty days…
| Index | 30 May 2024 | Week To Date | Month To Date (May) | Quarter To Date (Apr-Jun) | Year To Date (2024) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 7628.20 | -1.29% | -0.47% | -3.40% | 0.49% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| DTL | Data#3 | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| HMC | HMC Capital | Upgrade to Outperform from Neutral | Macquarie |
| KED | Keypath Education International | Downgrade to Neutral from Outperform | Macquarie |
| PDN | Paladin Energy | Downgrade to Hold from Buy | Bell Potter |
| PWR | Peter Warren Automotive | Downgrade to Sell from Neutral | Citi |
| Downgrade to Hold from Buy | Ord Minnett | ||
| SMP | SmartPay | Downgrade to Hold from Buy | Bell Potter |
| TLC | Lottery Corp | Add | 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: BHP - BHP GROUP LIMITED
For more info SHARE ANALYSIS: NIC - NICKEL INDUSTRIES LIMITED
For more info SHARE ANALYSIS: RIO - RIO TINTO LIMITED
For more info SHARE ANALYSIS: SHV - SELECT HARVESTS LIMITED
For more info SHARE ANALYSIS: WDS - WOODSIDE ENERGY GROUP LIMITED