Daily Market Reports | Dec 06 2024
This story features COLLINS FOODS LIMITED, and other companies. For more info SHARE ANALYSIS: CKF
SPI futures are suggesting Australian shares are poised to open lower on Friday, tracking Wall Street lower as investors await Friday’s US nonfarm payrolls report for clues on further interest rate cuts.
| World Overnight | |||
| SPI Overnight | 8468.00 | – 21.00 | – 0.25% |
| S&P ASX 200 | 8474.90 | + 12.30 | 0.15% |
| S&P500 | 6075.11 | – 11.38 | – 0.19% |
| Nasdaq Comp | 19700.26 | – 34.86 | – 0.18% |
| DJIA | 44765.71 | – 248.33 | – 0.55% |
| S&P500 VIX | 13.42 | – 0.03 | – 0.22% |
| US 10-year yield | 4.18 | 0.00 | 0.00% |
| USD Index | 105.73 | – 0.56 | – 0.53% |
| FTSE100 | 8349.38 | + 13.57 | 0.16% |
| DAX30 | 20358.80 | + 126.66 | 0.63% |
Good morning.
US equities struggled to push higher from current record highs, while global equities gained.
In Europe, the Euro Stoxx 50 and the FTSE closed up 0.7% and 0.2%, respectively.
French Prime Minister Barnier has resigned after losing a confidence vote. Under France’s constitution, the President cannot call a new legislative election until July 2025.
The yield on the US 10y Treasury note rose 0.1bp to 4.19%. Oil prices were little changed, with WTI down -0.3% at US$68.3/bbl after OPEC-plus announced a delay to the phasing out of voluntary production cuts until April.
Gold fell -0.9%, trading at US$2,626/oz.
Initial jobless claims rose to 224k in the week ended 30 November, up from 215k in the previous week.
The four-week moving average rose slightly to 218k, signalling ongoing rebalancing in the US labour market.
Economists at ANZ Bank highlight data are generally more volatile around the holiday season.
Continuing claims fell to 1.87m in the week to 23 November versus 1.9m in the prior week.
The market’s focus has now shifted to US nonfarm payrolls, which will be updated later today.
The November report will be crucial for assessing whether the FOMC decides to pause or cut at its December meeting before turning gradualist in 2025.
The market consensus is for payrolls to rise 218k in November, following 12k in the hurricane-affected October. The unemployment rate is expected to remain steady at 4.1%.
Crude oil traded in a tight range despite the delayed unwind of OPEC’s voluntary production cuts.
This is the third time the cartel delayed hiking output, and the laid-out plan suggests a slower increase in production than earlier planned.
The phase-out of voluntary production cut of -2.2mb/d has been extended by three-months, and this will last until the end of September 2026.
Yet, the market remained concerned about sluggish demand growth in China and rising non-OPEC supply.
China’s oil demand growth has been disappointing this year due to strong market penetration of electric vehicle. US crude production hit a fresh record above 13.5mb/d.
Industrial metal prices edged lower as concerns around weak demand continue to loom.
Copper prices traded in a tight range despite prospects of tightening refined copper supply in 2025. Copper treatment charges have been set at their lowest on record at USD21.25/t.
This is against a break-even level for Chinese smelters of USD35-40/t, which means many smelting plants will be loss making and shut down their processing, comments ANZ Bank.
The decline in iron ore prices continued as lingering issues in China’s property market raised questions around the sustainability of the recent rebound in prices to USD105/t.
Market sentiment has been positive since November, with steel production recovering to 82mt in October.
On the calendar today:
-Japan Oct earnings
-US Nov Non Farm Payrolls
-US Oct consumer credit
-US University of Michigan Dec consumer confidence
-Collins Foods ((CKF)) ex-div 11c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
Corporate news in Australia:
-Bendigo Bank ((BEN)) and Mastercard have sold their stakes in Cuscal ((CCL)) ahead of its ASX listing
-Mining company Iluka Resources ((ILU)) has received an additional $400m loan from the Australian Government for its Eneabba rare earths refinery
-Apollo Global Management is expected to sell its remaining stake in Challenger ((CGF)) after an escrow period ended on December 3rd
-HMC Capital ((HMC)) buys Neoen’s Victorian renewables for $950m
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2654.59 | – 19.70 | – 0.74% |
| Silver (oz) | 31.83 | – 0.00 | – 0.01% |
| Copper (lb) | 4.20 | + 0.00 | 0.00% |
| Aluminium (lb) | 1.19 | + 0.00 | 0.04% |
| Nickel (lb) | 7.18 | – 0.05 | – 0.74% |
| Zinc (lb) | 1.40 | + 0.01 | 0.71% |
| West Texas Crude | 68.47 | – 0.37 | – 0.54% |
| Brent Crude | 72.20 | – 0.33 | – 0.45% |
| Iron Ore (t) | 106.29 | + 0.21 | 0.20% |
The Australian share market over the past thirty days
| Index | 05 Dec 2024 | Week To Date | Month To Date (Dec) | Quarter To Date (Oct-Dec) | Year To Date (2024) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8474.90 | 0.46% | 0.46% | 2.48% | 11.65% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| 29M | 29Metals | Downgrade to Hold from Buy | Ord Minnett |
| CKF | Collins Foods | Upgrade to Buy from Neutral | Citi |
| COS | Cosol | Upgrade to Buy from Hold | Bell Potter |
| DEG | De Grey Mining | Downgrade to Speculative Hold from Speculative Buy | Bell Potter |
| GQG | GQG Partners | Upgrade to Add from Hold | Morgans |
| IGO | IGO Ltd | Upgrade to Neutral from Sell | UBS |
| IMD | Imdex | Downgrade to Neutral from Buy | UBS |
| JDO | Judo Capital | Downgrade to Hold from Add | Morgans |
| MTS | Metcash | Upgrade to Buy from Neutral | Citi |
| NST | Northern Star Resources | Downgrade to Neutral from Buy | Citi |
| SDF | Steadfast Group | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| SGF | SG Fleet | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| SHV | Select Harvests | Upgrade to Buy from Neutral | UBS |
| WBC | Westpac | Upgrade to Buy from Neutral | UBS |
| Downgrade to Reduce 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: BEN - BENDIGO & ADELAIDE BANK LIMITED
For more info SHARE ANALYSIS: CCL - CUSCAL LIMITED
For more info SHARE ANALYSIS: CGF - CHALLENGER LIMITED
For more info SHARE ANALYSIS: CKF - COLLINS FOODS LIMITED
For more info SHARE ANALYSIS: HMC - HMC CAPITAL LIMITED
For more info SHARE ANALYSIS: ILU - ILUKA RESOURCES LIMITED