Daily Market Reports | Dec 24 2021
This story features BEGA CHEESE LIMITED, and other companies. For more info SHARE ANALYSIS: BGA
The company is included in ASX200, ASX300 and ALL-ORDS
| World Overnight | |||
| SPI Overnight | 7340.00 | + 48.00 | 0.66% |
| S&P ASX 200 | 7387.60 | + 22.80 | 0.31% |
| S&P500 | 4725.79 | + 29.23 | 0.62% |
| Nasdaq Comp | 15653.37 | + 131.48 | 0.85% |
| DJIA | 35950.56 | + 196.67 | 0.55% |
| S&P500 VIX | 17.96 | – 0.67 | – 3.60% |
| US 10-year yield | 1.49 | + 0.04 | 2.47% |
| USD Index | 96.03 | – 0.04 | – 0.04% |
| FTSE100 | 7373.34 | + 31.68 | 0.43% |
| DAX30 | 15756.31 | + 162.84 | 1.04% |
By Greg Peel
Uncertain Smile
So it’s back to fogged-up glasses and itchy noses in the supermarket as masks and QRs are with us once more. It was nice while it lasted, but evidence suggests many in Sydney at least never actually lifted their own restrictions.
Reinstated social distancing rules and limits are of more concern, particularly for the hospitality sector at this critical time. Christmas travel has been hit for a second year, as plans for interstate trips and large family gatherings are scrapped, even before governments started to clamp down again.
And an increasing number will be spending tomorrow in isolation.
The impact was evident yesterday in an ASX200 that opened up 40 points and closed up 20 points, after a choppy ride in thin trade. Having watched from the sidelines as Wall Street fell and bounced back, a second rally spurred some interest here yesterday but not with any great gusto.
Percentage-wise, utilities was the best performer (+0.7%) and index-wise, the banks were the major driver (+0.6%). Healthcare, industrials and property all made similar moves.
Staples fell -0.3% after Bega Cheese ((BGA)) dropped -10.3% following a profit warning. Strong competition for dairy supply in Australia, high global prices and the impact of covid are to blame.
Technology fell -0.9% because Afterpay ((APT)) fell -2.4% while telcos just slipped into the red.
Excluding Bega, top five index moves up and down were fairly benign, with Magellan Financial Group ((MFG)) managing a token 5.2% gain to begin its long road back. Miners then followed in the top five ahead of Ansell, which having fallen -4% on Wednesday on accusations of slavery at a Malaysian supplier, came back 4% yesterday as no blame was laid on Ansell.
There are only six ASX300 companies given an ‘A’ rating by Monash University’s ESG-based modern slavery rankings, and Ansell is one of them.
But as tentative as yesterday’s rally appeared, another strong session on Wall Street has our futures up 48 points this morning, so maybe there’ll be a last minute Christmas dash before the ASX closes at 2.10pm, allowing everyone time to queue up for prawns.
And We’re Back
The last new high for the S&P500 was on December 10, before omicron and Fed policy concerns caused a tanty on Wall Street, and prior to that November 24 just before omicron was revealed. Last night the S&P hit another new high.
The three-day rally-back has been underpinned by the assumption that while omicron might be the most contagious variant to date, it’s proving to be the least severe. And the drop-off in cases in South Africa suggests it may be the fastest variant to come and go.
On that basis, the Fed’s new tightening stance is not so worrying. And there’ll be no lockdowns. There will nevertheless only be 15,000 people allowed into Times Square to ring in the New Year, rather than the pre-pandemic 58,000.
Inflation remains a concern, but not enough to hold back the stock market. US November PCE inflation came in at an annual rate of 5.7%, up from 5.0% in October. The core PCE rose to 4.7% from 4.1%.
The numbers are still rising but no longer surprising. Consumer spending rose only 0.6% in November after a 1.4% gain in October, but this was no surprise given a pull-forward of traditional Thanksgiving shopping. Personal incomes rose 0.4%, having risen 0.5% in October.
These results were as expected. Adjusted for inflation, spending was flat in November and incomes fell -0.2%.
The EV sector was on fire last night, after troubled electric truck hopeful Nikola tweeted that it had made its first delivery. Nikola also revealed it had to pay the SEC -US$125m to settle charges of misleading investors earlier in the piece.
Nikola had provided vision of its electric semi-trailer driving down a hill, which had everyone excited, until it was revealed the truck was simply rolling down the hill without an engine.
Nikola shares jumped 18% last night and all EV stocks went for a run, including Tesla (+5.8%).
It’s a comeback nonetheless after Biden’s stimulus bill appeared to be stranded, as it includes EV subsidies and incentives.
So as the bell rang on a new high it was “Happy Holidays” all round, with Wall Street closed tonight.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1808.70 | + 4.50 | 0.25% |
| Silver (oz) | 22.86 | + 0.07 | 0.31% |
| Copper (lb) | 4.35 | – 0.01 | – 0.31% |
| Aluminium (lb) | 1.28 | + 0.00 | 0.35% |
| Lead (lb) | 1.04 | – 0.01 | – 1.40% |
| Nickel (lb) | 9.14 | + 0.09 | 0.97% |
| Zinc (lb) | 1.61 | – 0.01 | – 0.62% |
| West Texas Crude | 73.74 | + 0.95 | 1.31% |
| Brent Crude | 76.76 | + 1.40 | 1.86% |
| Iron Ore (t) | 123.75 | + 1.15 | 0.94% |
Not much to report here other than the oils continue to press higher and so does the Aussie, up 0.4% to US$0.7249.
Today
The SPI Overnight closed up 48 points or 0.7%.
The ASX will close at 2.10pm today and reopen on Wednesday.
Wall Street is closed tonight and will reopen on Tuesday night.
This is the last Overnight Report for 2021. After some annual leave, the Report will return later in January.
FNArena ceases daily service from today, returning on January 10. The website will remain fully accessible.
Merry Christmas and Happy New Year to all. May 2022 bring you good fortune and more importantly, good health.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| HLS | Healius | Upgrade to Add from Hold | Morgans |
| LNK | Link Administration | Downgrade to Hold from Add | Morgans |
| MFG | Magellan Financial | Downgrade to Neutral from Outperform | Macquarie |
| MYX | Mayne Pharma | Downgrade to Neutral from Buy | Citi |
| POS | Poseidon Nickel | 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: BGA - BEGA CHEESE LIMITED
For more info SHARE ANALYSIS: MFG - MAGELLAN FINANCIAL GROUP LIMITED