Daily Market Reports | Apr 28 2021
This story features A2 MILK COMPANY LIMITED, and other companies. For more info SHARE ANALYSIS: A2M
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight (Jun) | 7026.00 | + 6.00 | 0.09% |
| S&P ASX 200 | 7033.80 | – 11.80 | – 0.17% |
| S&P500 | 4186.72 | – 0.90 | – 0.02% |
| Nasdaq Comp | 14090.22 | – 48.56 | – 0.34% |
| DJIA | 33984.93 | + 3.36 | 0.01% |
| S&P500 VIX | 17.56 | – 0.08 | – 0.45% |
| US 10-year yield | 1.62 | + 0.05 | 3.31% |
| USD Index | 90.89 | + 0.05 | 0.06% |
| FTSE100 | 6944.97 | – 18.15 | – 0.26% |
| DAX30 | 15249.27 | – 47.07 | – 0.31% |
By Greg Peel
Same Old, Same Old
A slight gain on Wall Street overnight had our futures pointing up 6 points yesterday morning but the ASX200 had other ideas. A slight gain from the open was immediately slapped down to a -40 points drop by late morning.
There the index drew close to 7000 support which prompted a steady recovery to regain most of those losses. Barring anything left of field, 7000 looks like a sturdy safety net for now, but upside drivers remain elusive.
Not so for the big miners, with record iron prices (and again last night) ensuring a 0.7% gain for the materials sector to largely be the saviour on the day. The banks and energy sat it out leaving a modest 0.2% gain in utilities to be the only other positive contributor.
Materials countered a -0.8% fall for healthcare, -1.0% for industrials, and -2.5% for technology despite a new record high for the Nasdaq overnight. For all three, we might look to the 0.7% jump up in the Aussie to be back over US78c as the culprit (down -0.4% last night).
The BNPLs drive the tech sector and Zip Co ((Z1P)) was the biggest index loser on the day with -6.3%. Afterpay ((APT)) lost -5.5%.
Selling continued in a2 Milk ((A2M)) as the idiots in Canberra talk war. It fell -3.2% thanks to people who should only talk amongst themselves. Corporate Travel Management ((CTD)) fell -3.1%, likely due to an unconstrained pandemic abroad. The two helped the consumer sectors to modest falls on the day.
The index winner on the day was Bingo Industries ((BIN)), which rose 6.3% with a full card after agreeing to be taken over. The M&A news continued, with Ladbrokes upping its bid for Tabcorp ((TAH)), which rose 4.2%.
The bumper harvest theme was again evident, this time in United Malt Group’s ((UMG)) 4.6% gain, despite Chinese barley/craft beer attacks.
Outside the index, analyst pure-play favourite Nickel Mines ((NIC)) dropped -12.1% on a miss of quarterly production forecasts.
Ardent Leisure ((ALG)) plunged -13.8% on no new news. Ord Minnett downgraded this stock to Sell a week ago, recalling that the company was forced to sell 51% of Main Event to survive the pandemic and now that earnings are flowing again, is seeing only half the benefit.
Life360 ((360)) provides an app for family communications, driver safety and location sharing, and yesterday announced the acquisition of US lookalike Joibit and a possible US listing, resulting in a 13.0% gain.
Wouldn’t teenagers love it if their parents could GPS-track them.
A nothing session on Wall Street overnight has our futures up 6, again, this morning.
Lots of ho with a sprinkling of hum
Microsoft (Dow) down -2.5%, Texas Instruments down -2.5%, Starbucks down -1.8%…what do these stocks have in common? They all posted earnings beats last night, after the closing bell. Share price moves are in the aftermarket.
So the theme continues of selling the news, but not every earnings beat is met with the same reaction.
Microsoft has been the outperformer among the mega-tech stocks in recent months so its reasonable beat was not enough. Google, on the other hand, has lagged but last night posted blow-away numbers and is up 4.6% in the aftermarket.
Having reported a solid beat in Monday night’s aftermarket, Tesla fell -4.5% last night.
The standout result during the session came from United Parcel Service (UPS), leading to a 10.4% gain. Clearly analysts underestimated the staying power of online shopping post-covid.
UPS was the highlight in an otherwise dullsville session on Wall Street. The Nasdaq slightly underperformed an unmoved Dow and S&P most likely due to any or all of the fact it hit a new high the night before, the US ten-year yield rose 5 basis points to 1.62%, and there was some squaring up ahead of the rush of Big Tech earnings results.
The Fed meeting concludes tonight, which may also explain a lack of investor conviction, but surely Jerome could just repost last month’s statement, or the month before, or…
In economic news, top-20 city house prices jumped 12% year on year in February to a 15-year high.
The Conference Board’s consumer confidence index has risen to a 14-month high in April of 121.7, up from 109.7 in March.
Jerome’s going to have to be convincing.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1775.80 | – 5.20 | – 0.29% |
| Silver (oz) | 26.25 | + 0.07 | 0.27% |
| Copper (lb) | 4.48 | + 0.10 | 2.31% |
| Aluminium (lb) | 1.08 | – 0.00 | – 0.28% |
| Lead (lb) | 0.93 | + 0.00 | 0.14% |
| Nickel (lb) | 7.59 | + 0.12 | 1.54% |
| Zinc (lb) | 1.29 | + 0.00 | 0.16% |
| West Texas Crude | 62.94 | + 1.03 | 1.66% |
| Brent Crude | 66.55 | + 0.76 | 1.16% |
| Iron Ore (t) | 193.85 | + 2.40 | 1.25% |
As is the case with our two biggest iron ore miners, Brazil’s Vale is also a big copper player and last night posted weak quarterly numbers and weak production guidance.
Hence the copper price is up, and iron ore is at another new record high.
OPEC-Plus met last night and decided not to lift its production quotas, sparking an oil price rally.
On any other day one would expect the Aussie to be higher (with the greenback flat) but having jumped up 0.7% on Monday night, it’s down -0.4% this morning to US$0.7772. Looks like US78c is a bit of a cap.
Today
The SPI Overnight closed up 6 points.
Australia’s March quarter CPI numbers are out today along with a preliminary look at March trade numbers.
The US will also see trade numbers along with the Fed policy statement/press conference.
There’s a handful of resource sector quarterlies due today along with reports from Mirvac Group ((MGR)) and UR Westfield ((URW)), plus sales numbers from Coles Group ((COL)).
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| API | Aus Pharmaceutical Ind | Downgrade to Neutral from Buy | Citi |
| AX1 | Accent Group | Downgrade to Neutral from Buy | Citi |
| EVN | Evolution Mining | Downgrade to Neutral from Outperform | Macquarie |
| ORG | Origin Energy | Upgrade to Outperform from Neutral | Macquarie |
| OSH | Oil Search | Upgrade to Buy from Neutral | UBS |
| RBL | Redbubble | Downgrade to Hold from 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: 360 - LIFE360 INC
For more info SHARE ANALYSIS: A2M - A2 MILK COMPANY LIMITED
For more info SHARE ANALYSIS: COL - COLES GROUP LIMITED
For more info SHARE ANALYSIS: CTD - CORPORATE TRAVEL MANAGEMENT LIMITED
For more info SHARE ANALYSIS: MGR - MIRVAC GROUP
For more info SHARE ANALYSIS: NIC - NICKEL INDUSTRIES LIMITED
For more info SHARE ANALYSIS: TAH - TABCORP HOLDINGS LIMITED
For more info SHARE ANALYSIS: UMG - UNITED MALT GROUP LIMITED
For more info SHARE ANALYSIS: URW - UNIBAIL-RODAMCO-WESTFIELD SE