##{"id":93071,"date":"2021-04-20T08:54:30","date_gmt":"2021-04-19T22:54:30","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=93071"},"modified":"2021-04-20T10:16:14","modified_gmt":"2021-04-20T00:16:14","slug":"the-overnight-report-quick-dip","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2021\/04\/20\/the-overnight-report-quick-dip\/","title":{"rendered":"The Overnight Report: Quick Dip"},"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 (Jun)<\/strong><\/span><\/td>\n

7018.00<\/strong><\/span><\/td>\n

– 32.00<\/strong><\/span><\/td>\n

– 0.45%<\/strong><\/span><\/td>\n<\/tr>\n

S&P ASX 200<\/strong><\/span><\/td>\n

7065.60<\/strong><\/span><\/td>\n

+ 2.10<\/strong><\/span><\/td>\n

0.03%<\/strong><\/span><\/td>\n<\/tr>\n

S&P500<\/strong><\/span><\/td>\n

4163.26<\/strong><\/span><\/td>\n

– 22.21<\/strong><\/span><\/td>\n

– 0.53%<\/strong><\/span><\/td>\n<\/tr>\n

Nasdaq Comp<\/strong><\/span><\/td>\n

13914.77<\/strong><\/span><\/td>\n

– 137.58<\/strong><\/span><\/td>\n

– 0.98%<\/strong><\/span><\/td>\n<\/tr>\n

DJIA<\/strong><\/span><\/td>\n

34077.63<\/strong><\/span><\/td>\n

– 123.04<\/strong><\/span><\/td>\n

– 0.36%<\/strong><\/span><\/td>\n<\/tr>\n

S&P500 VIX<\/strong><\/span><\/td>\n

17.29<\/strong><\/span><\/td>\n

+ 1.04<\/strong><\/span><\/td>\n

6.40%<\/strong><\/span><\/td>\n<\/tr>\n

US 10-year yield<\/strong><\/span><\/td>\n

1.60<\/strong><\/span><\/td>\n

+ 0.03<\/strong><\/span><\/td>\n

1.78%<\/strong><\/span><\/td>\n<\/tr>\n

USD Index<\/strong><\/span><\/td>\n

91.09<\/strong><\/span><\/td>\n

– 0.47<\/strong><\/span><\/td>\n

– 0.51%<\/strong><\/span><\/td>\n<\/tr>\n

FTSE100<\/strong><\/span><\/td>\n

7000.08<\/strong><\/span><\/td>\n

– 19.45<\/strong><\/span><\/td>\n

– 0.28%<\/strong><\/span><\/td>\n<\/tr>\n

DAX30<\/strong><\/span><\/td>\n

15368.39<\/strong><\/span><\/td>\n

– 91.36<\/strong><\/span><\/td>\n

– 0.59%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
By Greg Peel<\/p>\n
Not Gaining Traction<\/u><\/p>\n
After two sessions of accelerated rally on Wall Street, and our futures willing it on each morning, the ASX200 has put on 4 points and 2 points. Despite school holidays now being over, volumes have been low.<\/p>\n
It seems the market is struggling to kick on above 7000. Yesterday the index opened up 29 points to be in sight of 7100 but when the Dow futures started heading south, the ASX200 slowly lost steam all day.<\/p>\n
Materials (+0.8%) are back leading the market but elsewhere there is little conviction. Energy (-1.4%) continued its pullback, with Origin Energy ((ORG)) falling another -2%, but utilities rose 0.6%, having fallen -0.6% on Friday, the banks rose 0.3%, having fallen -0.3% on Friday, and telcos fell -0.7%, having risen on Friday. The consumer sectors and industrials had a snooze.<\/p>\n
No conviction eivident.<\/p>\n
We’re thus left with individual stock stories to provide any context.<\/p>\n
Sims ((SGM)) threw its prior guidance on the scrap heap and lifted expectations significantly for full-year earnings, resulting in a chart-topping 9.0% gain. Brokers have questioned whether Eagers Automotive’s ((APE)) golden run can continue beyond the short term but that stock rose 4.6%.<\/p>\n
The big news of the day in materials was the announced merger-of-equals of lithium miners Galaxy Resources ((GXY)) and Orocobre ((ORE)), neither of which is in the index. The merger will create a global lithium powerhouse and the market liked the idea, sending Galaxy up 6.1% and Orocobre up 5.7%.<\/p>\n
Peer Pilbara Minerals ((PLS)), which is in the index, jumped on the coat tails with 1.9%.<\/p>\n
On the downside, the gloss is coming off for Zip Co ((Z1P)) post capital raising (-4.5%) while the gloss continues to come off PointsBet Holdings ((PBH)) as competition heats up (-4.1%).<\/p>\n
So two sessions of failing to join in Wall Street’s exuberance and now that Wall Street has seen an unsurprising pullback overnight, our futures are down -32 points this morning. It will probably be a case of stairs and elevators, having not actually climbed the stairs.<\/p>\n
With big moves up in copper and iron ore prices overnight, it will likely be materials trying to hold things up once more.<\/p>\n
No Great Surprise<\/u><\/p>\n
While the S&P500 has been constantly grinding up to new records this month, the last few sessions have seen an acceleration to the top of the upward band, and several indicators suggesting overbought conditions and top-of-the dial bullishness.<\/p>\n
The Nasdaq also approached its own all-time high on Friday so no one was shocked last night to see all indices pull back a bit after a solid run. There was no specific trigger.<\/p>\n
The Nasdaq led the indices down with index heavyweight Tesla (also in the S&P) falling -3.4% following the crash over the weekend killing two men – neither of whom appeared to have been driving, despite Musk constantly insisting his cars do not drive themselves.<\/p>\n
Don’t call it autopilot then.<\/p>\n
The US ten-year yield did tick up a tad, by 3 basis points to 1.60%, but this is not enough on its own to send the Nasdaq into a tailspin.<\/p>\n
The day’s earnings results were again solid, with Coca-Cola leading the charge but picking the wrong day.<\/p>\n
Otherwise, the backdrop is one of a fast-paced vaccine rollout vis a vis debate over Biden’s tax hike intention. It appears unlikely he can win support in his own party for 28% but should get 25%, but that would leave income well short of infrastructure spending over several years.<\/p>\n
Other potential stumbling blocks include Russia’s build-up of military on the Ukraine border and ever present fear of China’s plans for Taiwan, but with the Fed in full-on support mode and earnings results so far coming in to the upside, there seems little that could halt the general rally at this stage.<\/p>\n
That we know about.<\/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>\n 1771.00<\/strong><\/span><\/td>\n – 5.50<\/strong><\/span><\/td>\n – 0.31%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n 25.81<\/strong><\/span><\/td>\n – 0.14<\/strong><\/span><\/td>\n – 0.54%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n 4.30<\/strong><\/span><\/td>\n + 0.10<\/strong><\/span><\/td>\n 2.28%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n 1.05<\/strong><\/span><\/td>\n + 0.01<\/strong><\/span><\/td>\n 0.54%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n 0.92<\/strong><\/span><\/td>\n + 0.02<\/strong><\/span><\/td>\n 1.75%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n 7.26<\/strong><\/span><\/td>\n – 0.01<\/strong><\/span><\/td>\n – 0.18%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n 1.28<\/strong><\/span><\/td>\n + 0.01<\/strong><\/span><\/td>\n 0.41%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n 63.38<\/strong><\/span><\/td>\n + 0.25<\/strong><\/span><\/td>\n 0.40%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n 67.16<\/strong><\/span><\/td>\n + 0.39<\/strong><\/span><\/td>\n 0.58%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n 181.20<\/strong><\/span><\/td>\n + 3.35<\/strong><\/span><\/td>\n 1.88%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
Strong demand has been given as the reason for copper’s renewed resurgence back towards the ten-year high price hit in February. It’s hard to find an analyst who is not bullish copper in the longer term.<\/p>\n
But the warning is the Chinese restocking season is coming to an end and slowing credit growth in China may well dampen demand in the near term.<\/p>\n
It’s hard to find an analyst who does not see iron ore back around US$100\/t in the second half of the year but no one has told iron ore traders.<\/p>\n
A -0.5% drop for the US dollar provided a headwind for commodities but gold slipped back a tad after a few days of rally.<\/p>\n
The Aussie is up 0.4% at US$0.7759.<\/p>\n
Today<\/u><\/p>\n
The SPI Overnight closed down -32 points or -0.5%.<\/p>\n
The minutes of the April RBA meeting are out today.<\/p>\n
Asaleo Care ((AHY)) holds its AGM today while quarterly reports are due from Challenger ((CGF)) and Sydney Airport ((SYD)) plus production reports from Rio Tinto ((RIO)) and Coronado Global Resources ((CRN)).<\/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
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS<\/span><\/td>\n<\/tr>\n
ABP<\/td>\n Abacus Property Group<\/td>\n Upgrade to Accumulate from Hold<\/td>\n Ord Minnett<\/td>\n<\/tr>\n
AWC<\/td>\n Alumina<\/td>\n Downgrade to Underperform from Neutral<\/td>\n Macquarie<\/td>\n<\/tr>\n
BOQ<\/td>\n Bank Of Queensland<\/td>\n Upgrade to Accumulate from Hold<\/td>\n Ord Minnett<\/td>\n<\/tr>\n
DXS<\/td>\n Dexus<\/td>\n Upgrade to Overweight from Underweight<\/td>\n Morgan Stanley<\/td>\n<\/tr>\n
MYX<\/td>\n Mayne Pharma Group<\/td>\n Downgrade to Underperform from Neutral<\/td>\n Macquarie<\/td>\n<\/tr>\n
NSR<\/td>\n National Storage<\/td>\n Downgrade to Hold from Accumulate<\/td>\n Ord Minnett<\/td>\n<\/tr>\n
RRL<\/td>\n Regis Resources<\/td>\n Downgrade to Hold from Buy<\/td>\n Ord Minnett<\/td>\n<\/tr>\n
SCG<\/td>\n Scentre Group<\/td>\n Downgrade to Equal-weight from Overweight<\/td>\n Morgan Stanley<\/td>\n<\/tr>\n
WES<\/td>\n Wesfarmers<\/td>\n Upgrade to Hold from Lighten<\/td>\n Ord Minnett<\/td>\n<\/tr>\n
WHC<\/td>\n Whitehaven Coal<\/td>\n Downgrade to Neutral from Outperform<\/td>\n Credit Suisse<\/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
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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":"
All three major US indices slipped back last night after an accelerated rally into Friday. Dow down -123. (Available for non-subscribers after 10am)<\/p>\n","protected":false},"author":8,"featured_media":93078,"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\/93071"}],"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=93071"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/93071\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/93078"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=93071"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=93071"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=93071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}