The Overnight Report: Who’s The Dictator?

This story features TRANSURBAN GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: TCL

SPI futures are suggesting general weakness remains the dominant term for Aussie shares this week.

As the February reporting season rolls on, Transurban ((TCL)) seems to have beaten consensus on better cost control, Rio Tinto ((RIO)) copied BHP earlier with a dividend reduction, while Auckland International Airport ((AIA)) released a bleak performance, but Telstra ((TLS)) reported a 7.1% increase in half year net profit to $1.1bn, with a dividend increase of 5.6% to 9.5c per share, plus a $750m share buyback.

On the local calendar today, we also have Bega Cheese ((BGA)), Brambles ((BXB)), Charter Hall ((CHC)), Fortescue ((FMG)) and Wesfarmers ((WES)) scheduled in for results releases in a genuinely long, long list.

https://fnarena.com/index.php/reporting_season/

Good morning.

Overnight, US equities set a new all-time record high with defensives in the spotlight as President Trump distanced himself from the Ukraine and with the Federal Reserve now unofficially on an extended holiday (so to speak).

FOMC Minutes out in the last hour revealed officials saw the risks to achieving their dual inflation and full employment mandate as roughly balanced, emphasing the point made by numerous FOMC members since the meeting that tangible evidence of further declines in inflation were a prerequisite for a resumption of easing (an unanimously held view).

Officials pointed to strong consumer demand and changes to trade and immigration policy as potential sources that could hinder recent progress on inflation.

A majority of members regarded the prevailing policy setting as restrictive, though a small minority thought that policy could be close to neutral – in which respect a small, presumably the same, minorly also view the skew of risks around the dual mandate as tilted to the upside vis–vis inflation.

In Europe, the ECB is also thought to be nearing the point of pausing or halting cuts, a suggestion made by executive board member Isabel Schnabel in an interview with the FT.

Plus investors must be getting worried about the rapidly changing global landscape.

Earlier European markets got excited about the potential for a quick resolution to the Ukraine-Russian war.

ANZ Bank economists are still expecting European rates to be cut by an additional -125bp this year.

January CPI inflation in the UK surprised on the upside and it’s not that that economy doesn’t have enough problems to deal with already.

Brexit seemed such a great idea at the time.

The Euro Stoxx 50 and the FTSE 100 indices closed -1.3% and -0.6% lower respectively.

The yield on 10-year Treasuries declined two basis points to 4.53%. AUD/USD remains steady in the mid-0.63 range as the USD consolidated.

In commodity markets, the active WTI oil future was up 0.7%, at US$72.35/bbl, while gold was down -0.8% at US$2,920.6/oz.

Iron ore extended gains following further signs of a recovery in the Chinese property sector.

In Australia, labour market data come out at 11:30am. ANZ Bank economists expect the unemployment rate to stay at 4.0%, with modest monthly growth to employment.

On the calendar today:

-Australia Jan Unemployment

-US Phil Fed bus outlook

-Auckland International Airport ((AIA)) earnings report

-Air New Zealand ((AIZ)) earnings report

-ANZ Bank ((ANZ)) Qtrly update

-Eagers Automotive ((APE)) earnings report

-Bega Cheese ((BGA)) earnings report

-Beacon Lighting Group ((BLX)) earnings report

-Brambles ((BXB)) earnings report

-Charter Hall ((CHC)) earnings report

-Coronado Global Resources ((CRN)) earnings report

(and more)

FNArtena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Corporate news in Australia:

-Light & Wonder ((LNW)) acquires Grover Gaming assets for -$1.34bn

-Mitsui buys 40% of Rio Tinto’s ((RIO)) Rhodes Ridge

-Mosaic Brands’ ((MOZ)) collapse leaves creditors with a -$242m shortfall

-Clarity Pharmaceuticals ((CU6)) gained a third FDA fast track for its prostate cancer diagnostic

-NRW Holdings ((NWH)) has halted ASX trading pending an update on its SIMEC contract in South Australia

The Australian share market over the past thirty days

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)

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