Daily Market Reports | Jun 30 2021
This story features TRANSURBAN GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: TCL
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight (Jun) | 7253.00 | + 33.00 | 0.46% |
| S&P ASX 200 | 7301.20 | – 6.10 | – 0.08% |
| S&P500 | 4291.80 | + 1.19 | 0.03% |
| Nasdaq Comp | 14528.34 | + 27.83 | 0.19% |
| DJIA | 34292.29 | + 9.02 | 0.03% |
| S&P500 VIX | 16.02 | + 0.26 | 1.65% |
| US 10-year yield | 1.48 | + 0.00 | 0.14% |
| USD Index | 92.08 | + 0.20 | 0.22% |
| FTSE100 | 7087.55 | + 14.58 | 0.21% |
| DAX30 | 15690.59 | + 136.41 | 0.88% |
By Greg Peel
Rinse & Repeat
You’d be forgiven for thinking the ASX just put in a tape of Monday yesterday, with the ASX200 tumbling from the open only to almost fully recover by the close. The index was down -66 points before trading back up in a nice straight line. But as Meryl Streep would say, it’s complicated.
Firstly we had to deal with the sheer number of stocks going ex-dividend on the open. While these were mostly concentrated in the property sector, they also impacted on some big names in industrials, ie Transurban ((TCL)) and utilities, ie APA Group ((APA)).
Property closed down -0.5%, industrials -0.3% and utilities -1.3%.
Then we had a mix of both “bad” covid news and “good” covid news throughout the session, and all before a backdrop of end-of-year push and pull which was lost in the wash.
“Bad” covid news came in the form of lockdowns in Perth, and the most fabulous region in the country, and newly announced areas of Queensland, including Townsville. While they don’t do a lot of mining in Perth, or in Townsville for that matter, here are homes to a lot of the FIFOs who do.
Hence materials fell -0.7% after a night of little movement in commodity prices.
Energy’s -0.8% loss was more cut and dried, with oil prices pulling back for the first time in a while, ahead of tomorrow night’s OPEC meeting.
The banks were sold down again initially, presumably on the “bad” news of more lockdowns” (although EOFY profit-taking could be at play as well), but recovered to be up 0.2% at the close on the “good” news of Gladys announcing financial support for locked-down businesses in NSW.
Pressure’s on for other premiers.
It was also “good” news when Jacinda announced the NZ bubble will reinflate from next Monday. Consumer discretionary rose 0.2%.
Investors were still chasing last year’s lockdown winners, with Harvey Norman ((HVN)) gaining 2.5% to sneak into the top five winners. Top spot went to Metcash ((MTS)) which reported on Monday but gained another 5.7% yesterday on positive analyst responses.
You’d think fast food would be another lockdown winner but Collins Foods ((CKF)), owner of KFC Australia, fell -5.7% on its earnings report, to top the loser’s board.
UR Westfield ((URW)) waved the flag for the ex-divs in coming second with -5.2%.
So there’s a lot going on, and again we’ll be watching the case-count update, but interestingly the futures are up 33 points this morning with Wall Street flat as a tack.
Is someone going to hit the market this morning with some hefty window-dressing?
Nothing to see here
It doesn’t look like anyone turned up for work on Wall Street last night. As far as dull sessions go, this one would win medals.
There were some interesting data releases nonetheless.
The Case-Shiller 20-city house price index showed a record 14.6% year on year jump in April – a figure all and sundry have described as “extraordinary”. Maybe so, but the average US house price still wouldn’t buy you a phone box in Western Sydney.
One issue is just how little minimum wage earners in the US are paid, which aside from impacting housing affordability is one reason why there is an ongoing imbalance between the millions still out of work and the millions of job vacancies businesses cannot fill.
The US equivalent of JobSeeker is still running, and will run to end-September. The beefed up unemployment benefit exceeds the minimum wage, so it’s not hard to spot the problem. However, the states have control of the payments and some have now begun to end the program. Businesses are screaming out for the White House to pull the pin completely.
The number of job vacancies is one reason the Conference Board consumer confidence index has hit 127.3 – the highest level since March 2020. The assumption is as soon as JobSeeker is ended, there’ll be a rush of applicants looking for actual wages.
Which they can then spend, along with the still high level of pent-up household savings.
In other news, all the major US banks last night announced dividend increases, in a range from JPMorgan at 11% to Morgan Stanley at 60%. Citigroup is the odd one out, still thinking about it. The Fed lifted covid-related dividend restrictions last week after the banks all passed their stress tests.
You’d think bank share prices would have subsequently surged last night but only Morgan Stanley managed to really move the dial (+3.4%) by exceeding what were otherwise priced-in expectations.
Indeed as noted, Wall Street went a whole lot of nowhere last night. That might change tonight for end of quarter, but with the S&P500 and Nasdaq posting new highs on an almost daily basis, and noting the “extraordinary” house price jump, questions are yet again being raised as to whether asset prices have now run too far.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1761.10 | – 17.30 | – 0.97% |
| Silver (oz) | 25.73 | – 0.36 | – 1.38% |
| Copper (lb) | 4.22 | – 0.02 | – 0.40% |
| Aluminium (lb) | 1.13 | + 0.00 | 0.20% |
| Lead (lb) | 1.04 | + 0.03 | 2.64% |
| Nickel (lb) | 8.24 | – 0.03 | – 0.32% |
| Zinc (lb) | 1.30 | – 0.01 | – 0.66% |
| West Texas Crude | 72.98 | + 0.07 | 0.10% |
| Brent Crude | 75.05 | + 0.44 | 0.59% |
| Iron Ore (t) | 214.10 | – 5.95 | – 2.70% |
Not much going on on the LME unless you’re into the batteries of yore. Iron ore has dipped, but such ups and downs are currently common.
With the oils settling down the only standout is gold. The US dollar index rose 0.2% but there has been much discussion of late as to whether gold really is the inflation hedge, and we also note the cryptos have been on the move back up again lately.
The Aussie has had a tidy little drop of -0.8% to US$0.7511, which I had expected on Monday after the lockdown news.
Today
Strap in for EOFY – SPI Overnight closed up 33 points or 0.5%.
Locally we’ll see numbers for private sector credit today, while Philip Lowe will host a panel.
China reports June PMIs.
The US will see June private sector jobs.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ASG | Autosports | Downgrade to Neutral from Outperform | Macquarie |
| BLD | Boral | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| CSL | CSL | Downgrade to Neutral from Outperform | Credit Suisse |
| EVN | Evolution Mining | Downgrade to Underweight from Equal-weight | Morgan Stanley |
| MGH | MAAS | Downgrade to Hold from Add | Morgans |
| S32 | South32 | Upgrade to Outperform from Neutral | Credit Suisse |
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CHARTS
For more info SHARE ANALYSIS: APA - APA GROUP
For more info SHARE ANALYSIS: CKF - COLLINS FOODS LIMITED
For more info SHARE ANALYSIS: HVN - HARVEY NORMAN HOLDINGS LIMITED
For more info SHARE ANALYSIS: MTS - METCASH LIMITED
For more info SHARE ANALYSIS: TCL - TRANSURBAN GROUP LIMITED
For more info SHARE ANALYSIS: URW - UNIBAIL-RODAMCO-WESTFIELD SE