Daily Market Reports | May 28 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) | 7148.00 | + 58.00 | 0.82% |
| S&P ASX 200 | 7094.90 | + 2.40 | 0.03% |
| S&P500 | 4200.88 | + 4.89 | 0.12% |
| Nasdaq Comp | 13736.28 | – 1.72 | – 0.01% |
| DJIA | 34464.64 | + 141.59 | 0.41% |
| S&P500 VIX | 16.74 | – 0.62 | – 3.57% |
| US 10-year yield | 1.61 | + 0.04 | 2.29% |
| USD Index | 90.01 | – 0.05 | – 0.06% |
| FTSE100 | 7019.67 | – 7.26 | – 0.10% |
| DAX30 | 15406.73 | – 43.99 | – 0.28% |
By Greg Peel
Been there, done that
One would been forgiven for assuming yesterday’s announcement of a one week lockdown in Victoria, late morning, would have been negative for the stock market, and it was, for all of 15 minutes. The ASX200 then rallied from down -10 points to up 26 by 3pm.
We might argue that lockdowns are a double-edged sword – on the one hand, a week’s loss of business is negative, but on the other, snap lockdowns have proven to be effective so getting on top of this latest outbreak swiftly is actually a positive.
Perhaps we could even suggest another lockdown will steel the RBA’s resolve. Whatever the case, not only did the ASX200 not close in the red yesterday, the futures are up 58 points this morning, with the S&P up a mere 0.1% overnight.
The index also suffered from another market-on-close plunge yesterday, having initially closed up 15.
Once again, sector moves were mixed, with more evidence of back and forth.
Once again, the travel agents shrugged off Victoria, although they are heavily shorted. Sydney Airport ((SYD)) and Transurban ((TCL)) played to script, but Qantas ((QAN)) rose slightly. Industrials down -0.7%.
You’d think consumer staples would be boosted on images of toilet paper flying off the shelves again to cope with this horrible gastro disease, but a -0.7% fall was due to Costa Group ((CGC)) plunging -24.1% on a weak update.
Iron ore trading returned from a holiday and the price fell another -2%, but materials rose 0.8%. Base metal prices have surged in London overnight.
Financials, healthcare and energy all fell slightly, but having been down on Tuesday and up on Wednesday, utilities fell -1.2% as factories and shops turned off the switches.
Technology posted the biggest gain (+1.9%) because the Nasdaq had rallied, and bargain hunters pushed EML Payments ((EML)) up 5.2%. Telcos gained 0.8% as TPG Telecom ((TPG)) rallied 8.1%.
Blow me down if AMP ((AMP)) didn’t top the index yesterday with an 8.5% jump, after ASIC began legal proceedings with regard seeing dead people. The penalties, however, are not as harsh as expected.
The ASX200 ultimately closed just below 7100, having threatened to close above before the after-bell squaring. If the futures are right this morning, we might smash the top of the range.
As to why the futures are up 0.8% this morning is unclear, unless it’s just about some base metal price gains. It might be a pre-set ahead of a big buying order today, but we’ll see.
Back & Forth
On Wednesday night the Nasdaq outperformed the Dow. Last night the Dow outperformed the Nasdaq. In neither case were there any clear drivers. Volumes were again low, heading into a long weekend.
A net 0.1% gain for the S&P500 puts that index within a bee’s appendage of its all-time high.
Economic data releases last night were mixed.
Weekly new jobless claims fell for the fourth week in a row, to 406,000, which is all well and good but it still means 406,000 more Americans applied for the dole. At no point has this number been negative.
Durable goods orders fell for the first time in a year in April, by -1.3%, but this was all about the lumpy transport segment. Orders for new cars and trucks have crashed due to the chip shortage curtailing production. Core orders otherwise rose 1.0%.
Following a big fall in new home sales announced earlier in the week, pending home sales fell -4.4%, as lack of affordability bites.
US March quarter GDP was unchanged at 6.4% growth in the first revision.
While the three major indices flipped and flopped, the Russell small cap index remained consistent, with another 1% gain last night following Wednesday night’s 2%. The Reddit crowd continues to chase up the “meme” stocks, with AMC Entertainment adding another 32% gain on top of a prior 20%.
Not only are these stocks not heavily shorted anymore, cinema chain AMC, which almost went broke last year, is trading well above 2019 levels when cinemas were in full swing.
It seems the Reddits are also now focusing on the real world. Having perhaps been burned lately on Tesla’s pullback, they’ve moved into Ford – a company which is a tad older. The drawcard is Ford’s new electric F150 pick-up, about to be launched, which has been hailed as a watershed moment for the 118 year old automaker.
Ford is up 70% year to date. GM hasn’t been mucking about either in the EV stakes. It’s up 44%. Tesla’s down -14%.
Tonight brings numbers for April personal income & spending, which includes PCE inflation. So anything could happen, at least until lunchtime when everyone bails for the long weekend.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1895.90 | – 0.90 | – 0.05% |
| Silver (oz) | 27.84 | + 0.18 | 0.65% |
| Copper (lb) | 4.58 | + 0.07 | 1.66% |
| Aluminium (lb) | 1.09 | + 0.01 | 1.03% |
| Lead (lb) | 0.98 | – 0.00 | – 0.12% |
| Nickel (lb) | 8.06 | + 0.29 | 3.69% |
| Zinc (lb) | 1.36 | + 0.02 | 1.53% |
| West Texas Crude | 66.85 | + 0.64 | 0.97% |
| Brent Crude | 69.47 | + 0.65 | 0.94% |
| Iron Ore (t) | 187.65 | – 4.00 | – 2.09% |
Workers at BHP Group’s ((BHP)) Escondida copper mine have gone on strike again, which they have done with monotonous regularity since the mid-naughties.
Copper seems to have sparked general base metal buying.
Iron ore is back on the downward trend again.
The Aussie is again steady, at US$0.7744.
Today
The SPI Overnight closed up 58 points or 0.8%.
The US will see fortnightly consumer sentiment tonight along with PCE inflation.
Champion Iron ((CIA)) reports earnings today, while Appen ((APX)), Electro Optic Systems ((EOS)) and InvoCare ((IVC)) hold AGMs.
CSR ((CSR)) goes ex.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ALL | Aristocrat Leisure | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| ALQ | ALS Ltd | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| Downgrade to Hold from Add | Morgans | ||
| MGR | Mirvac | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| NHC | New Hope Corp | Upgrade to Buy from Neutral | Citi |
| Downgrade to Neutral from Outperform | Credit Suisse | ||
| OZL | Oz Minerals | Upgrade to Buy from Neutral | Citi |
| SM1 | Synlait Milk | Upgrade to Hold from Reduce | Morgans |
| UWL | Uniti Group | Downgrade to Hold from Accumulate | Ord Minnett |
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
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For more info SHARE ANALYSIS: CIA - CHAMPION IRON LIMITED
For more info SHARE ANALYSIS: CSR - CSR LIMITED
For more info SHARE ANALYSIS: EML - EML PAYMENTS LIMITED
For more info SHARE ANALYSIS: EOS - ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED
For more info SHARE ANALYSIS: IVC - INVOCARE LIMITED
For more info SHARE ANALYSIS: QAN - QANTAS AIRWAYS LIMITED
For more info SHARE ANALYSIS: TCL - TRANSURBAN GROUP LIMITED
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