Daily Market Reports | Apr 22 2021
This story features SYRAH RESOURCES LIMITED, and other companies. For more info SHARE ANALYSIS: SYR
The company is included in ALL-ORDS
| World Overnight | |||
| SPI Overnight (Jun) | 7006.00 | + 37.00 | 0.53% |
| S&P ASX 200 | 6997.50 | – 20.30 | – 0.29% |
| S&P500 | 4173.42 | + 38.48 | 0.93% |
| Nasdaq Comp | 13950.22 | + 163.95 | 1.19% |
| DJIA | 34137.31 | + 316.01 | 0.93% |
| S&P500 VIX | 17.50 | – 1.18 | – 6.32% |
| US 10-year yield | 1.56 | + 0.00 | 0.13% |
| USD Index | 91.13 | – 0.08 | – 0.09% |
| FTSE100 | 6895.29 | + 35.42 | 0.52% |
| DAX30 | 15195.97 | + 66.46 | 0.44% |
By Greg Peel
Helluva Ride
7000 to 6900 and back to 7000. That largely sums up yesterday’s action on the ASX200. The futures had pointed down sharply in the morning following a pullback on Wall Street, but it wasn’t until around 11am the index fell down a well.
Whether or not it was a big sell order hitting the market or just standard sneeze-cold stuff vis a vis Wall Street is unclear, but no doubt the momentum algos kicked in to take the index down -110 points to midday. I asked the question yesterday whether we might see bargain hunters, and indeed we did at the 6900 level. And the algos had to switch gear.
The close of -20 points was immaterial under the circumstances, and with Wall Street rebounding overnight our futures are up 37 this morning, suggesting we’ll go back above 7000 yet again.
It’s quite the battle.
The Aussie had reversed sharply lower after Tuesday’s high which would have provided some impetus for sector winner healthcare (+1.1%). It should also have provided support for materials (-0.4%), but the day’s slew of quarterly production reports were on balance to the weak side.
Bucking that trend was graphite miner Syrah Resources ((SYR)), up 9.0%, but not in the index.
Technology (-1.9%) was the worst performer, following down the Nasdaq, and aided by a -15.4% plunge for software solutions company Nuix ((NXL)) after a profit warning.
A falling oil price did not help energy (-1.5%). Nor did a still falling Whitehaven Coal ((WHC)), down another -5.9%.
It was still a weak session for financials (-0.4%). Not only did the Australian ten-year yield fall back -5bps to 1.73% — about what it rose on Tuesday – selling was ongoing (-5.6%) in Challenger ((CGF)).
Preliminary data from the ABS showed a solid 1.4% rise in retail sales in March after a disappointing February. February was hindered by snap lockdowns in Victoria and WA, and those states led the charge back in March.
Consumer discretionary rose 0.3% yesterday, with some help from “reopening” winners IDP Education ((IEL)), up 5.1% to top the winners list, followed by Corporate Travel Management ((CTD)), up 3.5% after Morrison suggested he might open up the border to some travellers, in cases of business or compassion.
But it’s another story again today, with Wall Street’s pullback proving only brief. The Aussie has bounced back a bit and commodity prices (ex gold) have come off a bit so we’ll see how we go.
That was quick
It has been the trend over the last couple of years on Wall Street that much anticipated pullbacks don’t last very long. Even the covid crash was a blink-and-you’ll miss it affair, and otherwise -10% corrections have been absent and even -5% is hard to achieve before the buyers rush in again.
Wall Street appeared set this week to perhaps drop -3% in the S&P500 to the bottom of the uptrend channel to take some froth out, but no. If you were standing back in readiness you’ve missed out.
Wall Street commentators, too, have blamed algos and technical trading for the two-day whiplash but basically the reopening trade was back on again last night after what was just a blip. Bond yields were unchanged, and the bounce-back was as uniform across the three major averages as Tuesday night’s tumble had been.
Earnings results were again to the positive side with one clear exception. Netflix fell -7.4% to be the worst S&P performer, having reported a miss on subscriber growth after the bell on Tuesday night.
Just as there had been no specific trigger to set Wall Street off into a pullback from Monday night there was nothing to spin it around last night either. Other than impatient buyers returning.
And that’s about all one can say.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1793.60 | + 14.80 | 0.83% |
| Silver (oz) | 26.55 | + 0.73 | 2.83% |
| Copper (lb) | 4.27 | – 0.02 | – 0.56% |
| Aluminium (lb) | 1.07 | + 0.01 | 0.95% |
| Lead (lb) | 0.91 | – 0.02 | – 1.78% |
| Nickel (lb) | 7.24 | – 0.04 | – 0.56% |
| Zinc (lb) | 1.27 | + 0.00 | 0.06% |
| West Texas Crude | 61.35 | – 1.09 | – 1.75% |
| Brent Crude | 65.06 | – 1.20 | – 1.81% |
| Iron Ore (t) | 185.75 | – 2.00 | – 1.07% |
Stocks may have rebounded but oil prices continue to slide, correlated to rising case-counts across the globe and last night in particular, a surprise increase in weekly US crude inventories.
Iron ore finally had a dip amidst mixed metal moves and gold resumed its comeback which, it has been noted, is interesting in the face of a correction for bitcoin.
The Aussie is back up 0.3% at US$0.7749.
Today
The SPI Overnight closed up 37 points or 0.5%.
NAB will release a March quarter summary of business conditions/confidence today.
The ECB holds a policy meeting tonight.
Quarterly reporters today include AMP ((AMP)), Blackmores ((BKL)), Brambles ((BXB)), Evolution Mining ((EVN)), Mt Gibson Iron ((MGX)) and Megaport ((MP1)).
Dexus Property ((DXS)) holds an EGM.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AWC | Alumina | Downgrade to Underperform from Neutral | Macquarie |
| BOQ | Bank Of Queensland | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| DXS | Dexus | Upgrade to Overweight from Underweight | Morgan Stanley |
| GXY | Galaxy Resources | Upgrade to Neutral from Underperform | Credit Suisse |
| HUB | HUB24 | Upgrade to Accumulate from Hold | Ord Minnett |
| MYX | Mayne Pharma Group | Downgrade to Underperform from Neutral | Macquarie |
| SCG | Scentre Group | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| WSA | Western Areas | Upgrade to Add from Hold | 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: AMP - AMP LIMITED
For more info SHARE ANALYSIS: BKL - BLACKMORES LIMITED
For more info SHARE ANALYSIS: BXB - BRAMBLES LIMITED
For more info SHARE ANALYSIS: CGF - CHALLENGER LIMITED
For more info SHARE ANALYSIS: CTD - CORPORATE TRAVEL MANAGEMENT LIMITED
For more info SHARE ANALYSIS: DXS - DEXUS
For more info SHARE ANALYSIS: EVN - EVOLUTION MINING LIMITED
For more info SHARE ANALYSIS: IEL - IDP EDUCATION LIMITED
For more info SHARE ANALYSIS: MGX - MGX RESOURCES LIMITED
For more info SHARE ANALYSIS: MP1 - MEGAPORT LIMITED
For more info SHARE ANALYSIS: NXL - NUIX LIMITED
For more info SHARE ANALYSIS: SYR - SYRAH RESOURCES LIMITED
For more info SHARE ANALYSIS: WHC - WHITEHAVEN COAL LIMITED