The Overnight Report: One Of Those Days

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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

World Overnight
SPI Overnight	7172.00	+ 19.00	0.27%
S&P ASX 200	7148.90	+ 3.30	0.05%
S&P500	3973.75	+ 72.39	1.86%
Nasdaq Comp	11535.27	+ 180.66	1.59%
DJIA	31880.24	+ 618.34	1.98%
S&P500 VIX	28.48	– 0.95	– 3.23%
US 10-year yield	2.86	+ 0.07	2.58%
USD Index	102.07	– 1.08	– 1.05%
FTSE100	7513.44	+ 123.46	1.67%
DAX30	14175.40	+ 193.49	1.38%

By Greg Peel

No Response

Notwithstanding the S&P500 had closed flat on Friday night above the -20% correction mark, the local market appeared to take a change of government in its stride yesterday, as expected. Or maybe it’s a case of wait-and-see with regard a majority.

To that point, Commonwealth Bank economists have been the first to rush in and leave their economic forecasts unchanged.

Someone had a red hot go around 11am following a sluggish start, taking the ASX200 up 50 points, but that was very quickly quashed. Might have been a fat finger.

It’s testament to the sheer weight of BHP Group ((BHP)) that a 1.4% gain for the miner, supported by peers, could lead the materials sector not just to a best-on-ground 0.8% gain for the day but a counter to almost every other sector.

Tech rose 0.4% and energy 0.3%, but the banks fell -0.4% and staples -0.4% along with smaller falls in telcos (communication services), discretionary, healthcare and real estate.

Utilities posted the biggest loss (-0.9%), possibly as petrol prices are now back over $2.00/l despite the cut in the excise level.

Metal detector & communication services provider Codan ((CDA)) topped the index winners’ board simply by reaffirming that second half profit is expected to be the same as first half profit. That was worth 14.5%.

Elders ((ELD)) showed that not all agri-stocks have reached as-good-as-it-gets levels in rallying 8.9% on its earnings result. The company solidly beat on profit forecasts and upgraded FY22 guidance to 30-40% above FY21.

That said, Incitec Pivot’s ((IPL)) earnings result was overshadowed by the announcement the company intends to split its fertiliser and explosives businesses into two separate listed entities. It fell -3.7%, which proved enough to take the bronze on the losers’ board on a dull day.

Today is not shaping up as any more exciting at this stage, given our futures are up only 19 points on a 1.9% rally for the S&P500.

We await the latest from Antony Green.

Some days are Dimon’s

When Jamie Dimon speaks, Wall Street listens. The esteemed JPMorgan CEO has more than once turned Wall Street around against the tide, even if just by personally buying shares in his own bank.

It was nevertheless clear Wall Street was looking for some sort of trigger for another snap-back rally off the -20% level for the S&P500, so when Dimon implied at the JPMorgan investor day he did not see a recession in the short term, the Dow component rallied 6.2% and dragged other banks with it, to send the financials sector up 3.2% to be the standout winner on the day.

Dimon announced an increase in the bank’s net interest income outlook and suggested a goal of 17% return on equity may be achieved. Despite the storm clouds of inflation and war the consumer credit market remained solid, Dimon noted.

The consumer wasn’t looking very solid last week after shock earnings reports from Walmart and Target sent Wall Street plunging. Dimon managed to provide some relief. The consumer staples sector rallied 2.1%.

Energy gained 2.7%, despite flat oil prices, as presumably a sound consumer can still afford to fill the tank this summer.

Credit for the rally was also given to Joe Biden, after he announced on his tour of Asia he was considering cutting the tariffs on Chinese imports imposed by his predecessor.

It’s all well and good, but not helpful if China is in lockdown. Cases in Beijing are rising. The numbers seem trivial vis a vis population size but that won’t stop Xi slamming down the shutters again.

So is this it, this time?

No one’s prepared to commit. Consensus continues to be that there are bargains to be had, but you have to choose carefully. Apple was chosen last night, with the triple-index component rising 4% after having fallen over -20%.

Zoom Video reported after the bell and is up 6%, having fallen -80%.

Commodities

Spot Metals,Minerals & Energy Futures
Gold (oz)	1853.50	+ 6.80	0.37%
Silver (oz)	21.76	– 0.02	– 0.09%
Copper (lb)	4.28	0.00	0.00%
Aluminium (lb)	1.43	0.00	0.00%
Lead (lb)	0.97	0.00	0.00%
Nickel (lb)	12.58	0.00	0.00%
Zinc (lb)	1.69	0.00	0.00%
West Texas Crude	110.29	+ 0.01	0.01%
Brent Crude	113.54	+ 0.99	0.88%
Iron Ore (t)	134.29	– 0.07	– 0.05%

Apologies again, but there seems to be another issue with our LME price feed this morning, so be aware prices are not unchanged.

The US dollar index tumbled -1% last night on a jump in the euro, after ECB president Christine Lagarde suggested the first rate hikes, out of negative territory, will likely come in July and September. That should have been supportive for commodity prices.

Gold managed a small rally despite the increasingly volatile US ten-year bond yield jumping back up 7 points to 2.86%.

Given the greenback’s fall, a 0.9% rally in the Aussie to US$0.7111 cannot be attributed to Albo.

Today

The SPI Overnight closed up 19 points or 0.3%.

Flash estimates of May PMIs are due across the globe today.

TechnologyOne ((TNE)) reports earnings.

Viva Energy ((VEA)) holds its AGM.

Amcor ((AMC)) goes ex.

The Australian share market over the past thirty days…

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
ALL	Aristocrat Leisure	Upgrade to Buy from Accumulate	Ord Minnett
BLD	Boral	Downgrade to Underperform from Neutral	Credit Suisse
		Downgrade to Underweight from Equal-weight	Morgan Stanley
IGO	IGO	Upgrade to Buy from Neutral	UBS
NUF	Nufarm	Downgrade to Hold from Add	Morgans

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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