{"id":91546,"date":"2021-02-10T09:13:09","date_gmt":"2021-02-09T22:13:09","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=91546"},"modified":"2021-02-10T10:15:13","modified_gmt":"2021-02-09T23:15:13","slug":"the-overnight-report-taking-a-breather-4","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2021\/02\/10\/the-overnight-report-taking-a-breather-4\/","title":{"rendered":"The Overnight Report: Taking A Breather"},"content":{"rendered":"\n\n\n\n\n\n\n\n\n\n\n\n\n
World Overnight<\/strong><\/span><\/td>\n<\/tr>\n
SPI Overnight (Mar)<\/strong><\/span><\/td>\n6762.00<\/strong><\/span><\/td>\n+ 8.00<\/strong><\/span><\/td>\n0.12%<\/strong><\/span><\/td>\n<\/tr>\n
S&P ASX 200<\/strong><\/span><\/td>\n6821.20<\/strong><\/span><\/td>\n– 59.50<\/strong><\/span><\/td>\n– 0.86%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500<\/strong><\/span><\/td>\n3911.23<\/strong><\/span><\/td>\n– 4.36<\/strong><\/span><\/td>\n– 0.11%<\/strong><\/span><\/td>\n<\/tr>\n
Nasdaq Comp<\/strong><\/span><\/td>\n14007.70<\/strong><\/span><\/td>\n+ 20.06<\/strong><\/span><\/td>\n0.14%<\/strong><\/span><\/td>\n<\/tr>\n
DJIA<\/strong><\/span><\/td>\n31375.83<\/strong><\/span><\/td>\n– 9.93<\/strong><\/span><\/td>\n– 0.03%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500 VIX<\/strong><\/span><\/td>\n21.63<\/strong><\/span><\/td>\n+ 0.39<\/strong><\/span><\/td>\n1.84%<\/strong><\/span><\/td>\n<\/tr>\n
US 10-year yield<\/strong><\/span><\/td>\n1.16<\/strong><\/span><\/td>\n– 0.00<\/strong><\/span><\/td>\n– 0.26%<\/strong><\/span><\/td>\n<\/tr>\n
USD Index<\/strong><\/span><\/td>\n90.44<\/strong><\/span><\/td>\n– 0.50<\/strong><\/span><\/td>\n– 0.55%<\/strong><\/span><\/td>\n<\/tr>\n
FTSE100<\/strong><\/span><\/td>\n6531.56<\/strong><\/span><\/td>\n+ 8.03<\/strong><\/span><\/td>\n0.12%<\/strong><\/span><\/td>\n<\/tr>\n
DAX30<\/strong><\/span><\/td>\n14011.80<\/strong><\/span><\/td>\n– 48.11<\/strong><\/span><\/td>\n– 0.34%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

By Greg Peel<\/p>\n

And today we sell<\/u><\/p>\n

The futures had suggested down -14 points but the ASX200 opened a little higher yesterday, before what looks like a wave of selling arrived, somewhat out of the blue. The index fell sharply to midday before buyers stepped in.<\/p>\n

But it didn’t last, and the index closed on its low for the day.<\/p>\n

While a bit of a pullback would have been unsurprising after a couple of sessions of solid rallies, -59 seems rather excessive in the context of a positive night on Wall Street, no local macro news of note and price gains for the likes of iron ore and oil.<\/p>\n

The energy sector, which is very closely correlated to the oil price, fell -0.6%. Materials fell -0.4% with iron ore up 2.5%. All sectors closed in the red in a relatively uniform manner, implying market-wide selling. Perhaps a large offshore fund was repositioning its global allocations, perhaps traders decided to take profits ahead of earnings season proper, or perhaps the momentum algos were just having a lark.<\/p>\n

With Wall Street flat, our futures are up a meagre 8 points this morning, but if the last couple of weeks is any guide, I wouldn’t be surprised if we did a bit better than that. It might come down to today’s earnings reports, with the biggie being Commonwealth Bank ((CBA)).<\/p>\n

Yesterday’s results were not so flash. Challenger ((CGF)) fell -14.8% to be the worst performer, after disappointing the market with a miss on dividend. Boral ((BLD)) disappointed in Australia and warned of uncertainty in a covid-ridden US. It fell -7.4% to take the silver, and peer Adbri ((ABC)) dropped -5.9% in sympathy to take bronze.<\/p>\n

On the flipside, Macquarie Group ((MQG)) did not officially report but provided a quarterly trading update, which was worth 6.6% and Best on Ground.<\/p>\n

The exception to uniform selling yesterday was property (-2.1%), which continues to be impacted by rising bond yields. Industrials (-1.3%) and utilities (-1.4%) are similarly impacted, but yields are not the reason investors are abandoning AGL Energy ((AGL)), which fell another -2.1%. AGL is now down -8% post profit warning, continuing the long slide south since 2017.<\/p>\n

What didn’t affect the market yesterday was news there are some gaming rooms up for grabs in Sydney if anyone’s interested. Nice views, I’m told. Crown Resorts ((CWN)) is currently in a trading halt.<\/p>\n

NAB’s business survey for January, out yesterday, showed business conditions dropping back to +7.2 from +15.8 in December. December was one out the box however, jumping up from +8.0 in November, so no one was much surprised, and +7.2 is still above average.<\/p>\n

Confidence went the other way, rebounding to +10.0 from a weak +4.7 in December, which likely reflected Sydney’s northern beaches lockdown over Christmas.<\/p>\n

Earnings season is set to ramp up, and I’m told expectations are for better than expected results, but then I never really quite understood that sentence.<\/p>\n

Have a Break<\/u><\/p>\n

One might have expected Monday night to be the night Wall Street nursed Superbowl hangovers but it was last night traders decided they needed a rest. It was a dull, low volume session, with the only highlight being all of the Dow, S&P, Nasdaq and Russell hitting record intraday highs before the Dow and S&P fell back.<\/p>\n

The impeachment trial is now playing out as I write although today is mostly procedural – the next couple of days will be the fun bit. However, no one expects the Republicans to upset Trump’s fan base.<\/p>\n

More important is Biden’s stimulus package. I do not pretend for a moment to understand US parliamentary rules, but I believe the US$1.9trn package can be passed on Kamala’s casting vote and does not require the 60-vote majority it would otherwise because of something called “budget reconciliation”. But it may not be the full US$1.9trn.<\/p>\n

Aside from Biden agreeing it would be more sensible to means test the US$1400 household handout rather than give one to Elon Musk, thus reducing the overall cost, it also now appears the US$15 minimum wage policy forming part of the package may not actually be eligible to be passed under “budget reconciliation”.<\/p>\n

Hence Biden is conceding he may have to leave that one out for now, which would also reduce the cost, and moreover it is the main stumbling block preventing him from garnering any sort of bipartisan support. He doesn’t require bipartisan support for the rest of it, but he would like to reunite America.<\/p>\n

Good luck.<\/p>\n

Meanwhile, the US averaged 111,190 new coronavirus cases a day in the past week, down -36% from the average two weeks ago. Hospitalisations are also now on the decline, and Johnson & Johnson’s one-shot vaccine is currently being assessed by the FDA ahead of likely approval later this month.<\/p>\n

Stimulus, and vaccine and virus news, are underpinning a positive mood on Wall Street, along with the Fed of course, but as is the case here, rising bond yields have many wary.<\/p>\n

Commodities <\/u><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Spot Metals,Minerals & Energy Futures<\/strong><\/span><\/td>\n<\/tr>\n
Gold (oz)<\/strong><\/span><\/td>\n1835.20<\/strong><\/span><\/td>\n+ 1.90<\/strong><\/span><\/td>\n0.10%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n27.23<\/strong><\/span><\/td>\n– 0.28<\/strong><\/span><\/td>\n– 1.02%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n3.65<\/strong><\/span><\/td>\n+ 0.00<\/strong><\/span><\/td>\n0.07%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n0.93<\/strong><\/span><\/td>\n+ 0.01<\/strong><\/span><\/td>\n1.29%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n0.93<\/strong><\/span><\/td>\n+ 0.00<\/strong><\/span><\/td>\n0.48%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n8.32<\/strong><\/span><\/td>\n+ 0.14<\/strong><\/span><\/td>\n1.77%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n1.21<\/strong><\/span><\/td>\n+ 0.02<\/strong><\/span><\/td>\n1.41%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n58.40<\/strong><\/span><\/td>\n+ 0.46<\/strong><\/span><\/td>\n0.79%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n61.16<\/strong><\/span><\/td>\n+ 0.60<\/strong><\/span><\/td>\n0.99%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n163.45<\/strong><\/span><\/td>\n+ 3.65<\/strong><\/span><\/td>\n2.28%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Another positive session for commodity prices all round, except for silver.<\/p>\n

Another fall in the US dollar, down -0.6%, helped.<\/p>\n

Both helped the Aussie up another 0.4% to US$0.7738.<\/p>\n

Today<\/u><\/p>\n

The SPI Overnight closed up 8 points.<\/p>\n

Westpac’s consumer confidence survey is out today.<\/p>\n

Both China and the US report inflation numbers.<\/p>\n

Commonwealth Bank, Cimic ((CIM)) and Insurance Australia Group ((IAG)) are among those reporting earnings today.<\/p>\n

ResMed ((RMD)) goes ex-dividend.<\/p>\n

FNArena's Corporate Results Monitor is updated daily throughout the month: https:\/\/www.fnarena.com\/index.php\/reporting_season\/<\/a><\/p>\n

The Australian share market over the past thirty days…<\/strong><\/p>\n

<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS<\/span><\/td>\n<\/tr>\n
ASX<\/td>\nASX Ltd<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
CIA<\/td>\nChampion Iron<\/td>\nUpgrade to Neutral from Sell<\/td>\nCiti<\/td>\n<\/tr>\n
COH<\/td>\nCochlear<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
HVN<\/td>\nHarvey Norman Holdings<\/td>\nDowngrade to Hold from Accumulate<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
MFG<\/td>\nMagellan Financial Group<\/td>\nUpgrade to Outperform from Underperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
MGX<\/td>\nMount Gibson Iron<\/td>\nUpgrade to Buy from Neutral<\/td>\nCiti<\/td>\n<\/tr>\n
MQG<\/td>\nMacquarie Group<\/td>\nDowngrade to Sell from Neutral<\/td>\nCiti<\/td>\n<\/tr>\n
ORG<\/td>\nOrigin Energy<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
PLS<\/td>\nPilbara Minerals<\/td>\nDowngrade to Neutral from Outperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
REA<\/td>\nREA Group<\/td>\nDowngrade to Underperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
UWL<\/td>\nUniti Group<\/td>\nDowngrade to Accumulate from Buy<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
WES<\/td>\nWesfarmers<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

For more detail go to FNArena's Australian Broker Call Report<\/a>, which is updated each morning, Mon-Fri.<\/p>\n

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<\/a>. (Subscribers can access prices on the website.)<\/em><\/p>\n

(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author's and not by association FNArena's – see disclaimer on the website)<\/strong><\/em><\/p>\n

All paying members at FNArena are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts on the website and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.<\/em><\/p>\n

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)<\/a>" – Warning this story contains unashamedly positive feedback on the service provided. www.fnarena.com<\/em><\/p>\n

FNArena is proud about its track record and past achievements: Ten Years On<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Then suddenly, nothing happened on Wall Street. Dow down -9. (Available for non-subscribers after 10am)<\/p>\n","protected":false},"author":8,"featured_media":91555,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[84],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/91546"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=91546"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/91546\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/91555"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=91546"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=91546"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=91546"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}