The Overnight Report: Are Those Sleigh Bells?

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World Overnight
SPI Overnight	7310.00	+ 39.00	0.54%
S&P ASX 200	7364.80	+ 9.80	0.13%
S&P500	4696.56	+ 47.33	1.02%
Nasdaq Comp	15521.89	+ 180.81	1.18%
DJIA	35753.89	+ 261.19	0.74%
S&P500 VIX	18.63	– 2.38	– 11.33%
US 10-year yield	1.46	– 0.03	– 2.02%
USD Index	96.07	– 0.41	– 0.42%
FTSE100	7341.66	+ 44.25	0.61%
DAX30	15593.47	+ 146.03	0.95%

By Greg Peel

Must be Christmas

Trading has begun to notably thin on the ASX as the holidays approach, with the ASX200 meandering its way yesterday from up 19 points at the open to down -22 mid-session and back to up 9.

There was not a lot going on at the macro level, other than the rebound for the Nasdaq overnight driving technology up 2.6%, with Afterpay ((APT)) following Block up 5.4%, and energy up 0.8% on stronger oil prices.

Brokers have been rushing to get their lithium forecast upgrades in before Christmas, which helped Pilbara Minerals ((PLS)) up 8.7%, but the big miners slipped a bit and materials closed down -0.3%. Rio Tinto ((RIO)) announced it had acquired the Rincon lithium prospect in Argentina and fell -2.0%.

It was indeed a day for takeovers. Charter Hall Group ((CHC)) announced it had acquired 50% of Paradice Investment Management in a cash/scrip mix and fell -7.5%. The property sector fell -1.0%.

Link Group ((LNK)) has agreed to be acquired by Dye & Durham at $5.50 and that stock jumped 15%. Link is in the technology sector.

The FIRB approved the takeover of Sydney Airport ((SYD)), but that was only worth 0.8%.

The ACCC decided it did not need to review Aventus Group’s ((AVN)) merger with HomeCo Daily Needs REIT ((HDN)) and Home Consortium ((HMC)).

Praemium ((PPS)) is selling its international business to Morningstar and rose 2.1% on the price.

Not in the M&A camp was Ansell ((ANN)), which has had to distance itself from supplier Brightway, after the latter's operations were recently branded as “modern slavery” by the Malaysian government following a raid. Ansell fell -4.2%.

Healthcare had another positive session nonetheless (+0.8%) as CSL shares continue their recovery from the temporary cap raise pullback.

So having ignored Wall Street’s big fall on Monday night on omicron and the demise of Build Back Better, it made sense yesterday to ignore Wall Street’s big bounce on Biden’s pledge there would be no lockdowns.

Yet Wall Street is up again solidly overnight — not quite as strong as it was on Tuesday night, but our futures have sprung back to life and are showing up 39.

Another thin session awaits, nonetheless.

Here, there and everywhere

The first omicron case was reported in South Dakota last night. In the three weeks since the first US case was detected in San Francisco, all 50 states now have omicron.

The good news, however, is that South Africa, where omicron was first identified, has seen a sudden drop-off in new cases. It’s been four weeks since the November 26 alert from South Africa. Add in a week for them to figure it out, and we might be able to assume that after five weeks, maybe early in the new year, Australia too might have peaked. And everywhere else.

The FDA has approved Pfizer’s anti-viral pill for emergency use, meaning high risk cases.

There was more positive news for Wall Street in the release of the Conference Board’s consumer confidence index for December, which rose to 115.8 from 111.9 a month ago. While released in December, it is unclear whether the actual survey period took in omicron or not.

Wall Street is nonetheless gaining in confidence, kicking on last night from Tuesday night’s rebound. The Nasdaq again outperformed, led by a 7.5% jump for Tesla after Elon informed he had finished his tax-selling. For now anyway.

At US$11bn, Elon has made history as America’s biggest ever tax-payer in a year. He also pocketed some US$6bn for himself in the selling…you know…just for life’s little incidentals.

Every S&P500 sector closed in the green last night, topped by consumer discretionary (Tesla) and information technology.

The jury has decided that while omicron spreads like wildfire, and you’re a good chance to catch it on, for example a plane or a cruise, its impact is less severe. Hence even airline and cruise line stocks have bounced back again.

There is one more session on Wall Street before markets close on Christmas Eve, and don’t reopen again until Tuesday night.

Commodities

Spot Metals,Minerals & Energy Futures
Gold (oz)	1804.20	+ 15.40	0.86%
Silver (oz)	22.79	+ 0.31	1.38%
Copper (lb)	4.36	+ 0.03	0.75%
Aluminium (lb)	1.28	+ 0.05	4.43%
Lead (lb)	1.06	+ 0.01	0.74%
Nickel (lb)	9.05	+ 0.10	1.09%
Zinc (lb)	1.62	+ 0.05	3.36%
West Texas Crude	72.79	+ 1.39	1.95%
Brent Crude	75.36	+ 1.19	1.60%
Iron Ore (t)	122.60	– 1.20	– 0.97%

Easing omicron fears, and a thin market, drove base metal gains last night.

Aside from markets becoming less fearful of omicron, and the news out of South Africa, a larger than expected US weekly drawdown helped oil prices higher again last night.

Aussie traders short again? It’s up another 0.9% at US$0.7218.

Today

The SPI Overnight closed up 39 points or 0.5%.

US data tonight include durable goods, home sales and PCE inflation.

The Australian share market over the past thirty days…

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
HLS	Healius	Upgrade to Add from Hold	Morgans
MFG	Magellan Financial	Downgrade to Neutral from Outperform	Macquarie
MYX	Mayne Pharma	Downgrade to Neutral from Buy	Citi

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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