Daily Market Reports | Aug 10 2021
This story features WESTPAC BANKING CORPORATION, and other companies. For more info SHARE ANALYSIS: WBC
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight (Jun) | 7463.00 | + 25.00 | 0.34% |
| S&P ASX 200 | 7538.40 | 0.00 | 0.00% |
| S&P500 | 4432.35 | – 4.17 | – 0.09% |
| Nasdaq Comp | 14860.18 | + 24.42 | 0.16% |
| DJIA | 35101.85 | – 106.66 | – 0.30% |
| S&P500 VIX | 16.72 | + 0.57 | 3.53% |
| US 10-year yield | 1.32 | + 0.03 | 2.09% |
| USD Index | 92.97 | + 0.17 | 0.18% |
| FTSE100 | 7132.30 | + 9.35 | 0.13% |
| DAX30 | 15745.41 | – 16.04 | – 0.10% |
By Greg Peel
Splitting the Difference
No, that's not a typo. The ASX200 did close completely unch yesterday, down to two decimal points. But not before jumping 30 points in the first hour, just as the futures had ambitiously suggested on a new high for the Dow, despite other influences.
Those other influences included falls in commodity prices, particularly a big fall in the gold price. That fall saw three of the top five index losers on the day being gold miners, and the materials sector down -1.1%, with energy down -0.7%.
Selling continues in the big miners as well on the iron ore price correction.
The offset were financials (+1.3%). The major banks all rose around 1%, with Westpac ((WBC)) selling its life insurance business and National Bank ((NAB)) acquiring Citigroup's local consumer banking business, but the driving force was indeed insurance companies.
Suncorp reported earnings, and a buyback, and a solid dividend, and a special dividend, and jumped 7.8%. Suncorp topped the index and in sympathy, Insurance Australia Group ((IAG)) took silver with 4.6% and QBE Insurance ((QBE)) took bronze with 3.2%.
Interestingly, it was talk of buybacks after News Corp's ((NWS)) result release last week that had that stock also up 7.8% on its result. Yesterday News fell -8.0% to be the worst index performer. Analysts were less effusive than the market may have expected.
Financials received little help from healthcare, which closed flat despite a drop in the Aussie, leaving only utilities (+0.4%) and property (+0.2%) to provide some support against falls in all other sectors.
Transurban's ((TCL)) earnings result had that stock down -2.0% and industrials down -0.8%. Consumer discretionary also fell -0.8% with no sign of any delta let-up in Sydney.
Telstra ((TLS)), which reports on Thursday, managed a 0.5% gain despite the ACCC warning it was "going in hard" on suing telcos for misleading customers over NBN internet speeds. Telstra announced its health division had acquired a GP software company. The telco sector fell -0.3%.
Telstra has a health division?
The early jump had the ASX200 into more rarefied air at a new intraday high and undeterred, the futures are suggesting another go today, closing up 25 points despite a flat session on Wall Street, another big fall for gold, another big fall for oil prices, and weakness across the board in base metals.
Again, seemingly ambitious.
Not So Sure
The US daily case count hit 100,000 on Monday for the first time in six months, except this time it's delta.
Moderna rose 17% on announced vaccine provisional approvals in Australia and Switzerland. Moderna is up 3500% in two years.
The delta spread has led to the cancellation of Jazz Week in New Orleans, and the New York Auto Show, despite New York not being one of the delta hotspots.
Having jumped on Friday night on the July jobs report, prime reopening stocks such as those in travel/leisure fell back last night.
Energy and materials had weak sessions, on aforementioned commodity price falls. While delta poses a threat to commodity demand worldwide, rolling lockdowns in China are the major concern.
Goldman Sachs has cut its September quarter GDP growth forecast for China to 2.3% from 5.8%.
The long-awaited bipartisan infrastructure bill is expected to pass through Congress in the next couple of days, after last Friday was previously touted. The final stumbling block was, of all things, regulations to prevent cryptos being used for tax evasion. After much criticism, those regulations have been watered down.
Bitcoin rose 4% last night and having spent time consolidating around the US$30,000 mark, is now back at US$46,000, just as gold has lost around -US100/oz in a couple of sessions.
Trump has been trying very hard to get Republican senators to vote against the infrastructure bill, despite infrastructure spending being a Republican policy, and Trump having campaigned on such, while in four years never doing anything about it.
After the bell last night the Boston Fed president Eric Rosengren joined a growing chorus among colleagues in suggesting the FOMC should flag tapering at its September meeting, and begin in the fall (which starts September 22 in the US).
Rosengren is not a voting member.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1729.60 | – 33.50 | – 1.90% |
| Silver (oz) | 23.43 | – 1.04 | – 4.25% |
| Copper (lb) | 4.22 | – 0.09 | – 2.13% |
| Aluminium (lb) | 1.16 | – 0.01 | – 1.13% |
| Lead (lb) | 1.05 | – 0.01 | – 1.35% |
| Nickel (lb) | 8.56 | – 0.19 | – 2.14% |
| Zinc (lb) | 1.34 | – 0.01 | – 1.07% |
| West Texas Crude | 66.48 | – 1.80 | – 2.64% |
| Brent Crude | 69.21 | – 1.49 | – 2.11% |
| Iron Ore (t) | 171.20 | 0.00 | 0.00% |
The table tells the story. Iron ore is nevertheless unchanged.
The US dollar was up another 0.2% and hence the Aussie is down another -0.3% at US$0.7336.
Today
The SPI Overnight closed up 25 points or 0.3%.
The NAB business confidence survey for July is due today.
Challenger ((CGF)), Computershare ((CPU)) and James Hardie ((JHX)) are among those companies reporting today.
The Australian share market over the past thirty days
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ARB | ARB | Downgrade to Neutral from Buy | Citi |
| BLD | Boral | Downgrade to Neutral from Buy | UBS |
| CIP | Centuria Industrial REIT | Downgrade to Accumulate from Buy | Ord Minnett |
| CSR | CSR | Upgrade to Buy from Neutral | UBS |
| DEL | Delorean | Upgrade to Add from Hold | Morgans |
| FLT | Flight Centre Travel | Downgrade to Neutral from Outperform | Macquarie |
| LNK | Link Administration | Upgrade to Outperform from Neutral | Credit Suisse |
| OML | oOh!Media | Downgrade to Neutral from Outperform | Credit Suisse |
| PNI | Pinnacle Investment Management | Downgrade to Hold from Add | Morgans |
| RMD | ResMed | Downgrade to Neutral from Outperform | Macquarie |
| RWC | Reliance Worldwide | Upgrade to Buy from Neutral | UBS |
| SGM | Sims | Upgrade to Outperform from Neutral | Credit Suisse |
For more detail go to FNArena's Australian Broker CallReport, which is updated each morning, Mon-Fri.
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CHARTS
For more info SHARE ANALYSIS: CGF - CHALLENGER LIMITED
For more info SHARE ANALYSIS: CPU - COMPUTERSHARE LIMITED
For more info SHARE ANALYSIS: IAG - INSURANCE AUSTRALIA GROUP LIMITED
For more info SHARE ANALYSIS: JHX - JAMES HARDIE INDUSTRIES PLC
For more info SHARE ANALYSIS: NAB - NATIONAL AUSTRALIA BANK LIMITED
For more info SHARE ANALYSIS: NWS - NEWS CORPORATION
For more info SHARE ANALYSIS: QBE - QBE INSURANCE GROUP LIMITED
For more info SHARE ANALYSIS: TCL - TRANSURBAN GROUP LIMITED
For more info SHARE ANALYSIS: TLS - TELSTRA GROUP LIMITED
For more info SHARE ANALYSIS: WBC - WESTPAC BANKING CORPORATION