Daily Market Reports | Mar 15 2021
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The company is included in ALL-ORDS
| World Overnight | |||
| SPI Overnight (Mar) | 6767.00 | – 3.00 | – 0.04% |
| S&P ASX 200 | 6766.80 | + 52.90 | 0.79% |
| S&P500 | 3943.34 | + 4.00 | 0.10% |
| Nasdaq Comp | 13319.86 | – 78.81 | – 0.59% |
| DJIA | 32778.64 | + 293.05 | 0.90% |
| S&P500 VIX | 20.69 | – 1.22 | – 5.57% |
| US 10-year yield | 1.64 | + 0.11 | 7.07% |
| USD Index | 91.68 | + 0.30 | 0.33% |
| FTSE100 | 6761.47 | + 24.51 | 0.36% |
| DAX30 | 14502.39 | – 67.00 | – 0.46% |
By Greg Peel
Material Gains
An interesting thing happened on Friday on the ASX. The ASX200 opened up 70 points following strength on Wall Street and the market then prepared for the potential of a another slap-down, as had been the case in the prior three days.
And it came, bang on 11am. In half an hour the index fell -35 points. Half an later, it had recovered those gains. Does this mean the Masked Seller is now done? Or was too much support found this time around?
We can only see what happens today, but the difference today is the futures are not showing a solid open. They closed down -3 points on Saturday morning.
While the market itself may be volatile at present, commodity prices are enduring a period of volatility all of their own. On Thursday night copper jumped 2.3%, iron ore 3.7% and the oils 2.3%. On Friday the resource sectors were the main driver of index strength, with energy up 1.5% and materials up 1.6%.
Iron ore was down -3.1% on Friday night.
Three of the top five index winners on Friday were miners. However, three of the top five losers were also miners – of gold — despite the gold price doing nothing. Bit of a switch, one assumes.
Technology posted the biggest percentage gain with 2.3% because the Nasdaq went up. The Nasdaq went down on Friday night. Thanks for playing.
While all sectors closed in the green, the banks, staples, healthcare and telcos largely sat out Friday to let consumer discretionary (+1.3%), industrials (+1.3%) and utilities (+1.1%) hog the limelight.
Pointsbet Holdings ((PBH)) led discretionary with an 8.5% gain following an update from leading US online bookie DraftKings, suggesting how much bigger the US market was set to be by the time all bar two stubborn states legalise online gambling.
Offsetting gains in the sector were the travel agents, following all the excitement on Thursday from the government’s subsidised plane tickets. There has of course been a big hoo-ha about which destinations were included and which weren’t – Coalition governments just can’t seem to help themselves – and Flight Centre ((FLT)) pulled back -4.1%.
Sydney Airport ((SYD)) nevertheless kicked on with a 2.4% gain while Auckland International Airport ((AIA)) jumped 4.1%. Both are counted as industrials. AGL Energy ((AGL)) rose 1.7% to help utilities along.
After another bifurcated session on Wall Street on Friday night our futures show little in the way of lead this morning, but iron ore has slipped again as noted and the oils are down around -0.7% so it won’t be a resourceful session this time, although the Aussie’s a little lower.
Inflated Fears
Just when it looked like inflation fears had subsided in the US, following a benign CPI read and a reasonable ten-year Treasury auction last week, Friday night saw a swift return. The US ten-year yield had appeared to have stabilised in the low 1.50s but on Friday night jumped 11 basis points to 1.64%.
So the response was predictable – Dow up 0.9%, Nasdaq down -0.6% and S&P largely flat in the middle.
There was no specific trigger to the move in yields, which sees the ten-year now back to levels of last February, before, you know, that thing. But from this week most Americans will see a US$1400 gift from Joe Biden hit their accounts and that may have something to do with it.
The fortnightly Michigan Uni confidence survey showed a jump to 83.0 from 76.8 at end-February when forecasts were for 78.0.
Admittedly the Nasdaq’s -0.6% response to rising yields was more muted than we saw earlier in the month, when falls of -2.5% on the day were frequent, and the tech-laden index did see a net 6% gain in the prior three sessions.
What we can conclude is Wall Street really doesn’t know whether it’s Arthur or Martha at moment as stimulus flows and the pace of vaccinations exceeds all prior expectations, while at the same time case-counts have begun to plateau from earlier slides in such states as Texas but also now in New York and New Jersey, where the whole shebang first liked off a year ago.
Then there’s the stimulus, and more to come in the not too distant future.
One interesting point to note is that while it is impossible to specifically track whether prior handouts to individuals made it into the stock market, on each of the prior two occasions new broker accounts rose and so did Wall Street.
It’s also interesting to note the last time there was a US yield scare, back in 2013 when the Fed started talking tapering, FANG and Co continued to rally regardless. And back then we were talking 3% in the ten-year.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1727.90 | + 4.10 | 0.24% |
| Silver (oz) | 25.93 | – 0.14 | – 0.54% |
| Copper (lb) | 4.13 | + 0.01 | 0.30% |
| Aluminium (lb) | 0.97 | – 0.01 | – 0.55% |
| Lead (lb) | 0.88 | + 0.00 | 0.35% |
| Nickel (lb) | 7.28 | – 0.09 | – 1.28% |
| Zinc (lb) | 1.27 | + 0.00 | 0.35% |
| West Texas Crude | 65.61 | – 0.45 | – 0.68% |
| Brent Crude | 69.22 | – 0.48 | – 0.69% |
| Iron Ore (t) | 165.70 | – 5.35 | – 3.13% |
Nickel continues to be out of favour while it’s a case of whiplash in the iron ore market.
Not much elsewhere but we note the Aussie has matched a 0.3% gain in the US dollar index by falling -0.4% to US$0.7762.
The SPI Overnight closed down -3 points on Saturday morning.
The Week Ahead
The March SPI contract will expire on Thursday along with index options and other derivatives so we may see a bit of volatility this week on that basis alone.
Tomorrow brings the minutes of the March RBA meeting and Thursday the February jobs numbers, followed by retail sales on Friday.
China releases February retail sales, industrial production and fixed asset investment numbers today.
New Zealand releases its December quarter GDP result on Thursday.
The Fed, and the Bank of England, and the Bank of Japan all hold policy meetings this week.
The US will also see retail sales and industrial production numbers tomorrow, along with housing sentiment, and housing starts on Wednesday.
With the airport stocks on the move, both Auckland and Sydney will report monthly traffic numbers this week.
The ex-divs keep coming, although they are beginning now to quietly taper off.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| CSL | CSL | Upgrade to Buy from Neutral | Citi |
| Upgrade to Add from Hold | Morgans | ||
| IRE | Iress | Upgrade to Outperform from Neutral | Credit Suisse |
| LNK | Link Administration | Upgrade to Buy | Citi |
| QAN | Qantas Airways | Upgrade to Buy from Neutral | Citi |
| Upgrade to Buy from Hold | Ord Minnett | ||
| SLK | Sealink Travel | Upgrade to Outperform from Neutral | Macquarie |
| TWE | Treasury Wine Estates | Downgrade to Neutral from Outperform | Credit Suisse |
| Downgrade to Hold from Accumulate | Ord Minnett | ||
| WSA | Western Areas | Upgrade to Outperform from Neutral | Credit Suisse |
| Downgrade to Hold from Add | Morgans | ||
| Z1P | Zip Co | 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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