Daily Market Reports | Mar 12 2021
This story features FLIGHT CENTRE TRAVEL GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: FLT
The company is included in ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight (Mar) | 6756.00 | + 37.00 | 0.55% |
| S&P ASX 200 | 6713.90 | – 0.20 | – 0.00% |
| S&P500 | 3939.34 | + 40.53 | 1.04% |
| Nasdaq Comp | 13398.67 | + 329.84 | 2.52% |
| DJIA | 32485.59 | + 188.57 | 0.58% |
| S&P500 VIX | 21.91 | – 0.65 | – 2.88% |
| US 10-year yield | 1.53 | + 0.01 | 0.46% |
| USD Index | 91.38 | – 0.44 | – 0.48% |
| FTSE100 | 6736.96 | + 11.36 | 0.17% |
| DAX30 | 14569.39 | + 29.14 | 0.20% |
By Greg Peel
Up, Up and Away
That big seller was in again yesterday it appears, or group thereof. Following another solid session on Wall Street – this time not Big Tech-led – the ASX200 turned a 42 point gain from the open into a -66 point loss at midday.
Only to close the session flat.
That’s three days in a row what started as a strong session ended up not being so. Yesterday it was not the 6800 mark that triggered the selling – the early peak was 6756.
Only in the afternoon did the session return to something more normal, with early falls in the big banks and miners to a great extent reversed. The day’s theme ultimately was Travel.
The government’s new plan to pay half the price of a ticket to various marginal seats in the country put a rocket under anything travel-related yesterday. Flight Centre ((FLT)) topped the index winners’ board with a 9.2% gain.
Corporate Travel Management ((CTD)) rose 4.3%, Webjet ((WEB)) 3.8%, Qantas ((QAN)) 2.5% and Sydney Airport ((SYD)) 2.2%.
The two best performing sectors on the day were consumer discretionary (+1.0%) which includes travel agents, and industrials (+0.9%), wherein lay airlines and airports.
Discretionary’s gain came with a handicap of a -5.7% fall for IDP Education ((IEL)) after a major stakeholder announced plans for a sell-down.
Second worst performer on the index was Afterpay ((APT)), which having jumped up 7.5% on Wednesday on the Nasdaq rebound fell back -3.7% yesterday because the Nasdaq didn’t go on with it. Why the short term finance company is inextricably linked to US Big Tech is anyone’s guess.
The technology sector was the worst performer on the day (-1.6%).
Materials managed to close the day flat while the banks lost -0.4%, offset by another revival day for healthcare (+0.5%), which seems now to be belying the currency.
We can probably tie bank selling into another fall in bond yields, with the Aussie ten-year dropping -6 basis points to 1.64% in line with a similar fall overnight in the US.
So what might happen today? We’ve had another solid session on Wall Street, another positive start suggested by the futures (+37) and strong gains for copper and iron ore prices, albeit offset by the aforementioned currency.
Do we get another slap-down at some stage?
Cheque’s in the Mail
Biden signed off on his stimulus (relief) bill last night. He was always going to of course, but Wall Street was relieved anyway.
While such an injection of taxpayer funds should mean higher yields, that impact has already been priced in thanks to recent spikes and following Wednesday night’s tepid CPI numbers, stability appears to have been found. That’s a green light for the Nasdaq.
So we’re back to the familiar story of last year, or at least last night we were. Dow up 0.6% and Nasdaq 2.5%, with the S&P splitting the difference.
There was also some positive economic news last night in the form of a -42,000 fall in weekly new jobless claims to 712,000 – the lowest since early November.
The US vaccine rollout continues a-pace, and Biden has signed up for more doses from J&J/Merck. Adding up the rollout, stimulus and stable yields and Wall Street is leaning positive in all sectors – from the reopening trade to ongoing Big Tech dominance.
Texas will prove an interesting litmus test – it is one of two states currently experiencing the greatest increase, rather than decrease, in daily cases and has now fully reopened for business. Masks? Up to you.
Mississippi is the other and it’s reopening as well.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1723.80 | – 0.60 | – 0.03% |
| Silver (oz) | 26.07 | – 0.08 | – 0.31% |
| Copper (lb) | 4.12 | + 0.09 | 2.25% |
| Aluminium (lb) | 0.98 | + 0.00 | 0.49% |
| Lead (lb) | 0.88 | – 0.00 | – 0.03% |
| Nickel (lb) | 7.37 | – 0.14 | – 1.81% |
| Zinc (lb) | 1.26 | + 0.02 | 1.65% |
| West Texas Crude | 66.06 | + 1.42 | 2.20% |
| Brent Crude | 69.70 | + 1.59 | 2.33% |
| Iron Ore (t) | 171.05 | + 6.35 | 3.86% |
While the stimulus bill may not have moved US yields last night it did have a -0.5% impact on the US dollar, with traders probably now looking ahead to an even bigger infrastructure package.
Good news for metals, although copper seems the only beneficiary at this point. You’d be hard pressed to find anyone who is not bullish copper on the “electric” theme right now, on the basis of supply is going to struggle.
Nickel should also be an EV/battery go-to metal but in this instance, oversupply is the issue.
Iron ore rarely pays any attention to currency but as I have noted in recent times, typically bounces back after falling sharply.
One day it won’t, but that day does not yet seem upon us.
The oils are beneficiaries of the reopening trade, so as long as the Saudis and Russians play ball, oil prices should remain supported.
One day they won’t.
Today
The SPI Overnight closed up 37 points or 0.6%.
The US releases wholesale inflation numbers tonight, so watch those bond yields again.
The quarterly promotions and relegations within S&P/ASX indices will be announced today ahead of becoming effective next Friday.
Computershare ((CPU)) holds its AGM.
Note that US summer time begins this Sunday, thus as of Tuesday morning the NYSE will close at 7am Sydney time, and the SPI Overnight the same.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ALQ | ALS Ltd | Upgrade to Hold from Lighten | Ord Minnett |
| 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 |
| NCM | Newcrest Mining | Upgrade to Outperform from Neutral | Macquarie |
| PAN | Panoramic Resources | Upgrade to Outperform from Neutral | Macquarie |
| QAN | Qantas Airways | 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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CHARTS
For more info SHARE ANALYSIS: CPU - COMPUTERSHARE LIMITED
For more info SHARE ANALYSIS: CTD - CORPORATE TRAVEL MANAGEMENT LIMITED
For more info SHARE ANALYSIS: FLT - FLIGHT CENTRE TRAVEL GROUP LIMITED
For more info SHARE ANALYSIS: IEL - IDP EDUCATION LIMITED
For more info SHARE ANALYSIS: QAN - QANTAS AIRWAYS LIMITED
For more info SHARE ANALYSIS: WEB - WEB TRAVEL GROUP LIMITED