The Overnight Report: More New Highs

This story features WEB TRAVEL GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: WEB

The company is included in ASX200, ASX300 and ALL-ORDS

By Greg Peel

Earnings Mix

For once the ASX200 opened solidly (up 30 points) and did not swiftly reverse, holding its ground, give or take, in the morning. There was a little dip on 755 new NSW cases for some reason — we’ve seen these dips before — but by lunchtime the index was up 35.

Then it drifted back in the afternoon.

The session was dominated by three factors: a bounce in commodity prices, some wild ups and downs on company earnings results, and the prime minister.

Smugmo told the states to stick to the so-called “national plan” that only he and no one else recognises and make sure we can all fly interstate for Christmas. That way he can blame the states when we can’t; when there aren’t enough vaccines available to hit those goals.

Queensland has closed its hard border with NSW for another ten weeks.

It was enough to have the travel stocks on the move once more, with the heavily shorted Webjet ((WEB)) and Flight Centre ((FLT)) up 6.5% and 6.7%, and with Qantas ((QAN)) up 5.5%. More rational Sydney Airport ((SYD)) investors lifted that stock up only 0.3%.

Oil and gold prices bounced hard on Monday night, and base metals also rose in unison. The energy sector thus led the way yesterday with a predictable 2.8% gain, with utilities (+0.5%) along for the ride, and materials took the silver with 0.8%.

Having missed out on Monday, the iron ore price yesterday shot up 9%.

Utilities aside, it appears investors tapped into their defensive positions to fund resource buying, given staples dropped -1.2% to be the worst performer and telcos lost -1.0%.

Consumer discretionary missed out (-0.5%), despite being a rotation contender, and despite the travel stock bounce. Kogan ((KGN)) fell -15.8% on result to continue its hero-to-zero covid experience. Kogan is also heavily shorted.

Which leads us to yesterday’s wild earnings result ride.

Second to Kogan on the index losers’ board was Monadelphous ((MND)), down -14.4%, then Ansell ((ANN)), down -9.2%, and Boral ((BLD)), down -5.6%. In between was nib Holdings ((NHF)), down another -7.2% following Monday’s rout on result.

The earnings winners were equally treated. Nanosonics ((NAN)) jumped 21.9%, Uniti Group ((UWL)) 8.4% and Scentre Group ((SCG)) 6.7%.

The size of the moves hides the fact there were plenty of notable share price reactions just outside the top five boards, and also outside the index.

We are now past the halfway mark in the season in terms to stocks reporting and the score is holding relatively steady at 39% beats to 21% misses (indicating a good performance). The index did manage to retake 7500 yesterday, just, but it’s still a long way back to the 7631 peak mid-August.

The futures are up 18 this morning, but today is another big day of earnings results, ahead of the biggest (by a margin) day tomorrow.

A little more of the same

Wall Street last night picked up where it left off on Monday night, with an across the board rally featuring Nasdaq outperformance.

The Nasdaq passed 15,000 for the first time, and the S&P500 hit another new high – its 50^th for 2021.

Renewed confidence waned somewhat in the late afternoon, with the Dow having been up 110 points at its high. Possibly playing it safe ahead of Jackson Hole, despite no one expecting any great revelations.

In the wake of Monday’s announced full approval of the Pfizer vaccine, Goldman Sachs wasted no time in declaring that beginning next month, no person – staff member or visitor – can enter its US premises without being fully vaccinated. Other similar declarations have been made by large US firms already.

The weird and wonderful world of US politics has not much been in the news of late, ex-Afghanistan, but last night House Democrats won a vote to set a date for a vote on the US$1trn bipartisan infrastructure bill. This vote was held up by Democrats wanting to include Biden’s US$3.5trn “human infrastructure” package in the one vote , but that will have to wait for another day.

Got it?

Finally, after an otherwise unremarkable session on Wall Street, the US earnings season is now into its long tail after 90% of S&P500 companies have reported. Estimates to this point have S&P net earnings growing 94.7% year on year.

Commodities

More renewed strength across the board (almost) for base metals but the star of the show last night was iron ore.

Long way back though.

The oils also kicked on.

All of which pushed the Aussie up another 0.6% to US$0.7260.

Today

The SPI Overnight closed up 18 points or 0.2%.

Today we’ll see June quarter construction work done ahead of next week’s GDP release.

The US will see new durable goods orders.

Another long list of reporting companies today. There is also and handful of ex-divs, including Telstra ((TLS)).

A reporting calendar and summaries of analyst responses to the day’s results are available on the FNArena Corporate Results Monitor.

(https://www.fnarena.com/index.php/reporting_season/)

The Australian share market over the past thirty days…

For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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