Daily Market Reports | Jul 06 2021
This story features AUCKLAND INTERNATIONAL AIRPORT LIMITED, and other companies. For more info SHARE ANALYSIS: AIA
The company is included in ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight (Jun) | 7248.00 | + 19.00 | 0.26% |
| S&P ASX 200 | 7315.00 | + 6.40 | 0.09% |
| S&P500 | 4352.34 | + 32.40 | 0.75% |
| Nasdaq Comp | 14639.33 | + 116.95 | 0.81% |
| DJIA | 34786.35 | + 152.82 | 0.44% |
| S&P500 VIX | 15.07 | – 0.41 | – 2.65% |
| US 10-year yield | 1.43 | – 0.05 | – 3.31% |
| USD Index | 92.26 | + 0.03 | 0.03% |
| FTSE100 | 7164.91 | + 41.64 | 0.58% |
| DAX30 | 15661.97 | + 11.88 | 0.08% |
By Greg Peel
Delta Dawn
With the Sydney case-count having fallen to 16 from 35, and all major US indices hitting new record highs on Friday night, traders took the gamble and pushed the ASX200 up 35 points from the open yesterday. When at 11am the Sunday case-count registered 35 once more, it was all over.
The situation is also becoming more ominous in Queensland, just as restrictions are being eased in other states.
The index fell to its lows by midday and tracked sideways thereafter. Covid aside, the big news of the day was a conditional, non-binding yada yada bid for Sydney Airport ((SYD)) from a consortium of infrastructure investors. The stock shot up 33.9%.
The bid represented a 42% premium to Friday’s close, and could be seen as somewhat opportunistic in the current climate. Sydney Airport was trading above $9 pre-pandemic before falling to $5. The stock closed at $5.80 on Friday and $7.78 yesterday.
The news sparked a speculative re-rating of infrastructure stocks in general. Auckland International Airport ((AIA)) rose 5.5%, Atlas Arteria ((ALX)) 3.5% and Transurban ((TCL)) 1.3%. The industrials sector rather stood out with a 4.9% gain, suggesting it would otherwise have been a weak session for the ASX200.
The same could be said with regard oil prices, strength in which had the energy sector up 2.0% and utilities 1.0%.
More reflective of delta fears was consumer discretionary (-0.9%) as staples held firm, along with the banks (-0.5%), technology (-1.0%) and telcos (-0.8%), in the latter case after a solid week last week.
Healthcare was also hit (-0.7%) after a good run, more likely reflecting a bounce-back in the Aussie.
Materials held on (+0.1%) amidst mixed moves for the big miners and a 12.0% jump for Chalice Mining ((CHN)), which you may never have heard of. Not wishing to put all its eggs in one basket, Chalice has been test drilling at its Julimar project and found a high-grade nickel-copper-cobalt-gold-platinum group deposit.
But there was no new news yesterday.
In economic news, ANZ Bank’s job ads series rose 3.0% in June to mark a 13-month winning streak, with ads now 39% above pre-pandemic levels and 125% year on year. ANZ Bank economists suggest the result is consistent with an unemployment rate of 5.0%, noting May came in at 5.1%.
Building approvals fell -7.1% in May when -5% was expected, led down by houses. But approvals remain up 53% year on year at historically high levels.
May retail trade numbers had already been flagged but a 0.4% gain, above 0.1% forecasts, represents a year on year gain of 7.7%.
It appears traders are prepared to risk another shot today ahead of the 11am update. With no Wall Street overnight our futures are up 19 points this morning.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1791.70 | + 4.40 | 0.25% |
| Silver (oz) | 26.47 | + 0.04 | 0.15% |
| Copper (lb) | 4.29 | + 0.08 | 2.00% |
| Aluminium (lb) | 1.15 | + 0.00 | 0.16% |
| Lead (lb) | 1.04 | + 0.02 | 1.60% |
| Nickel (lb) | 8.29 | – 0.01 | – 0.15% |
| Zinc (lb) | 1.32 | + 0.00 | 0.11% |
| West Texas Crude | 76.36 | + 1.20 | 1.60% |
| Brent Crude | 77.16 | + 0.99 | 1.30% |
| Iron Ore (t) | 221.40 | + 4.10 | 1.89% |
The strong US jobs number released on Friday is said to be behind a renewed rally in copper.
Iron ore is back over the US$220/t level and gold is inching closer to US$1800/oz.
As OPEC continues to dither, oil prices continue to rise. Americans continue to favour driving over planes and trains, breaking traffic records over the holiday weekend. The average price of gasoline is up a dollar on this time last year, at over US$3.00/gal, but western states are paying more given supply shortages caused by a lack of tanker drivers.
So everyone’s whinging. Bear in mind there’s roughly four litres in a gallon.
The Aussie is steady at US$0.7533.
Today
The SPI Overnight closed up 19 points or 0.3%.
The RBA has long flagged that today’s policy meeting will decide the path from here for bond purchases (QE).
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| AIA | Auckland International Airport | Downgrade to Sell from Neutral | UBS |
| AMA | Ama Group | Downgrade to Neutral from Buy | UBS |
| AMC | Amcor | Upgrade to Outperform from Neutral | Macquarie |
| CKF | Collins Foods | Downgrade to Neutral from Buy | UBS |
| NEC | Nine Entertainment | Downgrade to Neutral from Outperform | Macquarie |
| NWL | Netwealth Group | Downgrade to Underperform from Neutral | Credit Suisse |
| PDL | Pendal Group | Upgrade to Outperform from Neutral | Credit Suisse |
| TLS | Telstra | Upgrade to Add from Hold | Morgans |
| Downgrade to Neutral from Buy | UBS | ||
| WOW | Woolworths Group | Downgrade to Underperform from Neutral | Credit Suisse |
| Downgrade to Equal-weight from Overweight | Morgan Stanley | ||
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: AIA - AUCKLAND INTERNATIONAL AIRPORT LIMITED
For more info SHARE ANALYSIS: ALX - ATLAS ARTERIA
For more info SHARE ANALYSIS: CHN - CHALICE MINING LIMITED
For more info SHARE ANALYSIS: TCL - TRANSURBAN GROUP LIMITED