{"id":91924,"date":"2021-03-01T09:20:53","date_gmt":"2021-02-28T22:20:53","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=91924"},"modified":"2021-03-01T09:20:55","modified_gmt":"2021-02-28T22:20:55","slug":"the-monday-report-01-march-2021","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2021\/03\/01\/the-monday-report-01-march-2021\/","title":{"rendered":"The Monday Report – 01 March 2021"},"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>\n6658.00<\/strong><\/span><\/td>\n+ 29.00<\/strong><\/span><\/td>\n0.44%<\/strong><\/span><\/td>\n<\/tr>\n
S&P ASX 200<\/strong><\/span><\/td>\n6673.30<\/strong><\/span><\/td>\n– 160.70<\/strong><\/span><\/td>\n– 2.35%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500<\/strong><\/span><\/td>\n3811.15<\/strong><\/span><\/td>\n– 18.19<\/strong><\/span><\/td>\n– 0.48%<\/strong><\/span><\/td>\n<\/tr>\n
Nasdaq Comp<\/strong><\/span><\/td>\n13192.35<\/strong><\/span><\/td>\n+ 72.92<\/strong><\/span><\/td>\n0.56%<\/strong><\/span><\/td>\n<\/tr>\n
DJIA<\/strong><\/span><\/td>\n30932.37<\/strong><\/span><\/td>\n– 469.64<\/strong><\/span><\/td>\n– 1.50%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500 VIX<\/strong><\/span><\/td>\n27.95<\/strong><\/span><\/td>\n– 0.94<\/strong><\/span><\/td>\n– 3.25%<\/strong><\/span><\/td>\n<\/tr>\n
US 10-year yield<\/strong><\/span><\/td>\n1.46<\/strong><\/span><\/td>\n– 0.06<\/strong><\/span><\/td>\n– 3.82%<\/strong><\/span><\/td>\n<\/tr>\n
USD Index<\/strong><\/span><\/td>\n90.88<\/strong><\/span><\/td>\n+ 0.66<\/strong><\/span><\/td>\n0.73%<\/strong><\/span><\/td>\n<\/tr>\n
FTSE100<\/strong><\/span><\/td>\n6483.43<\/strong><\/span><\/td>\n– 168.53<\/strong><\/span><\/td>\n– 2.53%<\/strong><\/span><\/td>\n<\/tr>\n
DAX30<\/strong><\/span><\/td>\n13786.29<\/strong><\/span><\/td>\n– 93.04<\/strong><\/span><\/td>\n– 0.67%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

By Greg Peel<\/p>\n

Nowhere to run to<\/u><\/p>\n

The ASX200 ended the month of February by putting in its worst day since last September, wiping out all of the month's gains and rendering the earnings result season somewhat moot.<\/p>\n

The results season had begun with Wall Street in a period of limbo, allowing the day's releases to be the primary focus for investors. And they saw that it was good. Beats were running at well above historical levels. Indeed, the season has ended with beats still well above historical levels, but later in the month macro influences ruined the party.<\/p>\n

All sectors closed in the red on Friday, with industrials (-1.0%), utilities (-1.6%) and consumer staples (-1.9%) "outperforming", despite the fact the week's volatility was all about rising bond yields.<\/p>\n

On Friday the Australian ten-year yield rose another 17 basis points to 1.90%.<\/p>\n

Technology was the worst performer, down a full -5.3%. The sector was always going to underperform in blindly mimicking the Nasdaq's move overnight, but the damage was done by Afterpay ((APT)). It came back from a trading halt having raised new capital, and announced its founders had each dumped $60m worth of stock. Afterpay fell -10.6%.<\/p>\n

Consumer discretionary fell -3.2%. Harvey Norman ((HVN)) reported on the day and fell -1.1%, but also reporting were Kogan ((KGN)), which fell -10.4%, and PointsBet ((PBH)), down -10.6%.<\/p>\n

In terms of market cap, the ASX200 was led down by the banks (-2.2%), healthcare (-2.7%), materials (-2.3%) and energy (-2.5%).<\/p>\n

Consumer discretionary may have also been upset by the pullback in the Aussie from US80c accelerating further on Friday (down another -2% by Saturday morning), but this did not seem to help the exporters in the other direction.<\/p>\n

Speaking of exporters, Orica ((ORI)) imploded after a trading update which highlighted the impact of China's coal ban. It fell -18.1% to be the day's worst index performer. Selling in Service Stream ((SSM)) continued on (-14.2%) after the company reported on Wednesday.<\/p>\n

There were some trend-buckers nonetheless. Reporting on the day were Lynas Rare Earths ((LYC)) and Clinuvel Pharmaceuticals ((CUV)). They rose 5.7% and 3.6% respectively. Having reported earlier in the week, and also bucking the gold price trend, were miners Silver Lake Resources ((SLR)) and Perseus Mining ((PRU)), which put on 7.0% and 4.5%.<\/p>\n

Unlikely winner on the day was AMP ((AMP)). Having first looked at acquiring the company, then just part of the company, then none of the company, Ares Management is now looking at taking 60% of AMP Capital’s private markets business. AMP rose 7.5%.<\/p>\n

So, that was February. Today is March, and I can tell you that everything that happened in offshore markets during the final two weeks of February went into reverse on Friday night, from Wall Street to bond yields, commodity prices and currencies.<\/p>\n

Our futures were up a tentative 29 points on Saturday morning.<\/p>\n

Hall of Mirrors<\/u><\/p>\n

I said earlier in February, when Wall Street went into stall-mode, that if markets cannot find any reason to go up further they will invariably go down. Last week the Dow fell -1.8% and the Nasdaq -4.9%, with the S&P500 in the middle at -2.5%.<\/p>\n

On balance it was still a positive month, with the Dow netting a 3.2% gain to the Nasdaq's 0.9% and the S&P in the middle with 2.6%.<\/p>\n

Thus while a -470 plunge for the Dow on Friday night was not a reversal of the week's trade, it was a reversal of the month's theme, backed up by the Nasdaq rising 0.6%.<\/p>\n

Recent volatility has been all about rising bond yields. The US ten-year fell -6 basis points to 1.46% on Friday night.<\/p>\n

Base metal prices surged all month, particularly copper. They all fell back on Friday night, with copper down -2%.<\/p>\n

Oil prices had climbed steadily all month. They fell -3%.<\/p>\n

The US dollar index had been at risk of breaking down through 90. It jumped 0.7%.<\/p>\n

See any theme?<\/p>\n

It was the last day of a volatile, yet on a net basis positive month for markets. Time to take profits and square up.<\/p>\n

Any other news on the day was by the by, but there were some interesting economic data.<\/p>\n

US consumer spending jumped 2.4% in January to mark the biggest jump in six months, as stimulus cheques flowed once again. Incomes rose 10.0%.<\/p>\n

Inflationary? The Fed's preferred measure, core personal consumption & expenditure, rose 0.3% to 1.5% annualised, up from 1.3% in December. Yes, inflation is on the rise, but the core PCE still has to get to 2% to reach the Fed's target, and even then the Fed is prepared to let it run over 2% before considering any sort of monetary stimulus tapering.<\/p>\n

Yet there's more fiscal stimulus to come.<\/p>\n

As expected, the Senate has ruled against an increase to the minimum wage being allowable as part of the budget the Democrats can pass with a simple majority. Such an increase does not reflect government stimulus, as it would be paid by the private sector. Otherwise, Biden's US$1.9trn package should soon be voted on.<\/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>\n1735.60<\/strong><\/span><\/td>\n– 35.60<\/strong><\/span><\/td>\n– 2.01%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n26.70<\/strong><\/span><\/td>\n– 0.73<\/strong><\/span><\/td>\n– 2.66%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n4.19<\/strong><\/span><\/td>\n– 0.09<\/strong><\/span><\/td>\n– 2.12%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n0.98<\/strong><\/span><\/td>\n– 0.02<\/strong><\/span><\/td>\n– 2.04%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n0.93<\/strong><\/span><\/td>\n– 0.03<\/strong><\/span><\/td>\n– 3.60%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n8.49<\/strong><\/span><\/td>\n– 0.23<\/strong><\/span><\/td>\n– 2.59%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n1.27<\/strong><\/span><\/td>\n– 0.04<\/strong><\/span><\/td>\n– 2.71%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n61.50<\/strong><\/span><\/td>\n– 1.99<\/strong><\/span><\/td>\n– 3.13%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n64.42<\/strong><\/span><\/td>\n– 2.57<\/strong><\/span><\/td>\n– 3.84%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n176.65<\/strong><\/span><\/td>\n+ 2.35<\/strong><\/span><\/td>\n1.35%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Aside from speculative profit-taking, Friday's trade in base metals likely also reflected monthly rebalancing by commodity funds, for example selling copper because it has exceed its basket weighting, and buying something else in its place.<\/p>\n

Not gold though. It would be easy to say that gold dropped on the greenback's rise but a fall back in US yields should have provided some support.<\/p>\n

The oils would have also seen profit-taking and commodity fund rebalancing, and perhaps Texas starting to come back on line.<\/p>\n

The Aussie good heavens. Having pulled back from US80c with a sharp -1.4% drop on Thursday, Friday saw a further -1.9% plunge to US$0.7707.<\/p>\n

Dorothy's back in Kansas.<\/p>\n

The SPI Overnight closed up 29 points or 0.4%.<\/p>\n

The Week Ahead<\/u><\/p>\n

The reporting season is over, but there's always a couple of stragglers in the following week. And overwhelmed stock analysts are still trying to catch up with last week's backlog.<\/p>\n

Attention now turns to Australia's December quarter GDP out on Wednesday. Today we'll see component numbers for company profits and inventories, and tomorrow the current account.<\/p>\n

Today also brings house prices, housing finance and ANZ Bank job ads. Tomorrow it's building approvals and on Thursday updated numbers for retail sales and trade.<\/p>\n

It's jobs week in the US, with private sector numbers due on Wednesday and non-farm payrolls on Friday.<\/p>\n

Today is global manufacturing PMI day and Wednesday the same for services PMIs.<\/p>\n

China released its PMIs on Friday manufacturing 50.6, down from 51.3, and services 51.4, down from 51.5. But it should be noted that Chinese data always suffer distortions around Lunar New Year.<\/p>\n

Don't panic when you see Fortescue Metals ((FMG)) plunge on the open today. It will remind us that the ex-dividend season, which lags result season, ramps up further this week.<\/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\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\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
A2M<\/td>\na2 Milk Co<\/td>\nDowngrade to Lighten from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
ABY<\/td>\nADORE BEAUTY GROUP<\/td>\nUpgrade to Buy from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
ALX<\/td>\nAtlas Arteria<\/td>\nUpgrade to Overweight from Equal-weight<\/td>\nMorgan Stanley<\/td>\n<\/tr>\n
APA<\/td>\nAPA<\/td>\nUpgrade to Buy from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
APE<\/td>\nEAGERS AUTOMOTIVE<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Accumulate from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
APX<\/td>\nAppen<\/td>\nUpgrade to Buy from Accumulate<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
ASB<\/td>\nAustal<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
ATL<\/td>\nApollo Tourism & Leisure<\/td>\nDowngrade to Lighten from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
BOQ<\/td>\nBank Of Queensland<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
CCX<\/td>\nCity Chic<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
FCL<\/td>\nFineos Corp<\/td>\nDowngrade to Hold from Accumulate<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
FLT<\/td>\nFlight Centre<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Sell from Neutral<\/td>\nCiti<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Underperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Equal-weight from Overweight<\/td>\nMorgan Stanley<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Neutral from Buy<\/td>\nUBS<\/td>\n<\/tr>\n
HLO<\/td>\nHELLOWORLD TRAVEL<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
HVN<\/td>\nHarvey Norman Holdings<\/td>\nDowngrade to Neutral from Outperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
JHC<\/td>\nJapara Healthcare<\/td>\nDowngrade to Accumulate from Buy<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
MGX<\/td>\nMount Gibson Iron<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
MPL<\/td>\nMedibank Private<\/td>\nUpgrade to Neutral from Underperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
MWY<\/td>\nMidway<\/td>\nUpgrade to Buy from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
NAN<\/td>\nNanosonics<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
NIC<\/td>\nNickel Mines<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
NTD<\/td>\nNational Tyre & Wheel<\/td>\nHold<\/td>\nMorgans<\/td>\n<\/tr>\n
NUF<\/td>\nNufarm<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Neutral from Outperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
NVX<\/td>\nNovonix<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
NXT<\/td>\nNextdc<\/td>\nUpgrade to Buy from Accumulate<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
QUB<\/td>\nQube Holdings<\/td>\nDowngrade to Neutral from Outperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Hold from Buy<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
RHC<\/td>\nRamsay Health Care<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
SCG<\/td>\nScentre Group<\/td>\nDowngrade to Neutral from Outperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
SEK<\/td>\nSeek Ltd<\/td>\nUpgrade to Buy from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Underperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
TPG<\/td>\nTPG Telecom<\/td>\nUpgrade to Buy from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
WGN<\/td>\nWagners Holding<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
WSA<\/td>\nWestern Areas<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
WTC<\/td>\nWisetech Global<\/td>\nUpgrade to Neutral from Sell<\/td>\nCiti<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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

Allovernight 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

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

Wrap of events affecting the market on Friday night and the weekend and a preview of the week ahead<\/p>\n","protected":false},"author":8,"featured_media":91926,"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\/91924"}],"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=91924"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/91924\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/91926"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=91924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=91924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=91924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}