Daily market reports | November 09, 2022
This story features WESTPAC BANKING CORPORATION and other companies. For more info SHARE ANALYSIS: WBC
| Overnight world | |||
| RLS at night | 6998.00 | + 42.00 | 0.60% |
| S&P ASX 200 | 6958.90 | + 25.20 | 0.36% |
| S&P500 | 3828.11 | + 21.31 | 0.56% |
| Nasdaq Comp | 10616.20 | + 51.68 | 0.49% |
| DJIA | 33160.83 | + 333.83 | 1.02% |
| S&P500 VIX | 25.54 | + 1.19 | 4.89% |
| US 10-Year Yield | 4.13 | – 0.09 | – 2.09% |
| USD Index | 109.61 | – 0.51 | – 0.46% |
| FTSE100 | 7306.14 | + 6.15 | 0.08% |
| DAX30 | 13688.75 | + 155.23 | 1.15% |
By Greg Peel
one more calm
Yesterday morning the local market gave signs that it was not as enthusiastic about the US mid-term elections as Wall Street. Futures suggested 24 and the ASX200 closed 25 in a session of low volatility.
With less macro momentum, there were some micro factors to consider yesterday.
Following its ill-received earnings result on Monday, Westpac ((WBC)) recovered 2.0% after a small rethink. Financials rose 1.0%.
Having risen on Monday, materials were flat yesterday (-0.3%) due to a combination of a stronger iron ore price and weaker everything else, and a James Hardie ((JHX)) which sent the shares down -13.7%.
The one-time building supplier that could not be wrong was wrong in warning of a “significant change in the outlook for housing market activity for the second half of our fiscal year in most geographies in which we participate.” Housing starts slowed significantly in the US in the September quarter, and construction activity in Australia continued to be restricted by bad weather and labor shortages.
Materials also had a -9.7% drop for Sims ((SGM)), after the scrapping company lamented the decrease in volume, the increase in competition and the pressure on margins at its General Shareholders’ Meeting.
The worst performing sector was energy (-2.3%), with oil prices slightly lower, but coal prices even more so, causing the usual suspects to fall -5-7% ( are in the top five most days), and on a -5.3% drop from Santos ((S.T.O.)).
Santos cut its production target for 2023 and announced a structural split into a legacy LNG and domestic gas business, and Santos Energy Solutions, which will focus on low-carbon gas and liquids processing, decarbonization and production of clean fuel.
Car. In. Jump. You already know what to do.
On the other side of the ledger, regular lithium miners were joined by 2 Milk ((A2M)), 4.0% higher after announcing a buyback, and The Lottery Corp ((FTA)), 4.0% more due to an improvement in income at its General Shareholders’ Meeting.
Consumer Staples rose 1.3% and Discretions 0.8%, despite Westpac’s November Consumer Confidence Index falling -6.9% to 78.0, compared to the GFC low of 79.0 and 2020 lock low of 75.6.
“Christmas spending plans are very moderate this year,” Westpac noted.
By contrast, the NAB business survey showed that business confidence rose 4 points in October, to zero, while business conditions fell just -1 point to a still high level of 22. The report suggested that business conditions remain very strong, capacity utilization is just shy of peak. and cost and price growth remain high.
The bad news is that this just means the RBA has more work to do.
The good news is that with Wall Street rising once again overnight, our futures are up 42 points this morning, so we don’t really care.
crypto crunch
According to Chas and John, all the latest major polls show Republicans regaining an average of about 40 seats in the House and one in the Senate. One is enough, but that’s a coin toss. Biden will not pass any legislation for the next two years. Even aid to Ukraine is now being questioned by Republicans.
Wall Street loves a good standoff, as nothing adverse can upset the apple cart. He might as well go on vacation for two years, except the usual fuss over the debt ceiling and the government shutdown is pending. And once the midterm polls close, the 2024 presidential campaign begins.
God help us.
Wall Street was in full swing again last night as the Dow rose another 500 points from the open. But by early afternoon it was back to normal. Who thought that cryptocurrencies could be so influential?
One of the world’s largest crypto exchanges, Binance, is merging with the non-US operations of the other world’s largest exchange, FTX, to combat the recent “liquidity crunch” in crypto land , prompted in large part by millennials getting bored with bitcoin this year. year.
In the news, bitcoin fell -12%, publicly traded cryptocurrency exchange Coinbase fell -11%, and publicly traded stock/crypto broker Robinhood fell -19%.
While there is little connection to the real world, the suggestion is that cryptocurrencies are a good benchmark for investor risk sentiment in general.
Once the initial scare wore off, Wall Street rallied and the Dow closed above 300.
In typical American fashion, the polls close at different times in different states, and then there are three time zones. I believe the last poll will close at 10am this morning Sydney time. It shouldn’t take long to declare victory in the House, but the Senate could take days, and another Georgia runoff may still be needed.
It’s hard to tell what Wall Street will do now ahead of Friday night’s CPI.
raw Materials
| Spot metals, minerals and energy futures | |||
| Gold (oz) | 1713.80 | + 38.80 | 2.32% |
| Silver (oz) | 21.39 | + 0.57 | 2.74% |
| Copper (lbs) | 3.66 | + 0.11 | 2.96% |
| Aluminum (lbs) | 1.15 | + 0.02 | 1.42% |
| Lead (lbs) | 0.92 | + 0.02 | 1.80% |
| Nickel (lbs) | 10.73 | + 0.17 | 1.58% |
| Zinc (lbs) | 1.31 | + 0.06 | 4.58% |
| West Texas Crude | 89.14 | – 2.85 | – 3.10% |
| Brent Crude | 95.59 | – 2.55 | – 2.60% |
Iron ore
| 85.33 |
– 1.81 |
– 2.08% |
|
Meanwhile, the US dollar has fallen another -0.5%. US bond yields also fell -8-9 points last night.
That again was good for gold and apparently for base metal prices, but not for oil.
Oil traders point to a further rise in covid cases in China, but by rights that should hit metals too, so take your pick.
The Australian dollar is up 0.4% outright at $0.6509. Only the other day I had a 62 in front of me.
This day
The SPI Overnight closed 42 points or 0.6% higher.
China today reports inflation figures for October.
National Bank ((TAKE)), Orica ((OR ME)), News Corp ((N.W.S.)) and REA Group ((rea)) report earnings.
Cole ((COLUMN)) and Newcrest Mining ((MNC)) are among those that hold General Shareholders’ Meetings.
CSR ((CSR)), KMD marks ((kmd)) and ResMed ((RMD)) go ex.
The Australian stock market in the last thirty days…
| CHANGES IN THE BROKER’S RECOMMENDATION IN THE LAST THREE TRADING DAYS | |||
| APX | appen | Upgrade to Neutral from Underperform | Macquarie |
| BBN | baby bunting | Demote to Neutral from Exceed | Macquarie |
| VHL | Brave Solutions | Demote to Neutral from Exceed | Macquarie |
| DOW | depressing EDI | Upgrade to Buy from Accumulate | ord minnett |
| OR ME | Orica | Upgrade to buy from neutral | UBS |
| please | Pilbara minerals | Upgrade to Hold from Lighten | ord minnett |
| TPW | Temple and Webster | Downgrade to Poor Performance from Neutral | Macquarie |
| WOW | Woolworths Group | Upgrade to Neutral from Underperform | swiss credit |
For more details go to FNArena’s Australian Broker Call Reportwhich is updated every morning, Monday through Friday.
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 comments, observations, names, and calculations are provided for informational and educational purposes only. Investors should always consult their authorized investment advisor first, before making any decisions. All opinions expressed are of the author and not of the FNArena association.) see disclaimer on the website)
All paying members on FNArena are reminded that they can set up an email alert specifically for The Overnight Report. Go to Portfolio & Alerts on the website and check the box in front of The Overnight Report. You will receive an email alert each time a new Nightly Report is posted on the website.
Find out why FNArena subscribers like the service so much: “Your comments (thanks)” – Warning: this story contains blatantly positive comments about the service provided. www.fnarena.com
FNArena is proud of its history and past achievements: Ten years later
