##{"id":95307,"date":"2021-07-22T09:05:27","date_gmt":"2021-07-21T23:05:27","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=95307"},"modified":"2021-07-22T10:21:07","modified_gmt":"2021-07-22T00:21:07","slug":"the-overnight-report-nothing-to-see-here-2","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2021\/07\/22\/the-overnight-report-nothing-to-see-here-2\/","title":{"rendered":"The Overnight Report: Nothing To See Here"},"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>\n7290.00<\/strong><\/span><\/td>\n+ 64.00<\/strong><\/span><\/td>\n0.89%<\/strong><\/span><\/td>\n<\/tr>\n
S&P ASX 200<\/strong><\/span><\/td>\n7308.70<\/strong><\/span><\/td>\n+ 56.50<\/strong><\/span><\/td>\n0.78%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500<\/strong><\/span><\/td>\n4358.69<\/strong><\/span><\/td>\n+ 35.63<\/strong><\/span><\/td>\n0.82%<\/strong><\/span><\/td>\n<\/tr>\n
Nasdaq Comp<\/strong><\/span><\/td>\n14631.95<\/strong><\/span><\/td>\n+ 133.08<\/strong><\/span><\/td>\n0.92%<\/strong><\/span><\/td>\n<\/tr>\n
DJIA<\/strong><\/span><\/td>\n34798.00<\/strong><\/span><\/td>\n+ 286.01<\/strong><\/span><\/td>\n0.83%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500 VIX<\/strong><\/span><\/td>\n17.91<\/strong><\/span><\/td>\n– 1.82<\/strong><\/span><\/td>\n– 9.22%<\/strong><\/span><\/td>\n<\/tr>\n
US 10-year yield<\/strong><\/span><\/td>\n1.28<\/strong><\/span><\/td>\n+ 0.07<\/strong><\/span><\/td>\n5.87%<\/strong><\/span><\/td>\n<\/tr>\n
USD Index<\/strong><\/span><\/td>\n92.79<\/strong><\/span><\/td>\n– 0.18<\/strong><\/span><\/td>\n– 0.19%<\/strong><\/span><\/td>\n<\/tr>\n
FTSE100<\/strong><\/span><\/td>\n6998.28<\/strong><\/span><\/td>\n+ 117.15<\/strong><\/span><\/td>\n1.70%<\/strong><\/span><\/td>\n<\/tr>\n
DAX30<\/strong><\/span><\/td>\n15422.50<\/strong><\/span><\/td>\n+ 206.23<\/strong><\/span><\/td>\n1.36%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

By Greg Peel<\/p>\n

And We’re Back<\/u><\/p>\n

The local market did not cop the same level of panic selling as Wall Street did earlier in the week and in fact held up pretty well on the Tuesday following Wall Street’s tumble. But there was no lack of enthusiasm yesterday morning to back the Wall Street bounce.<\/p>\n

No chance to get on, however. The ASX200 opened up 70 points in the first ten minutes and ultimately closed lower, having been up 100 points late morning. Another triple-digit case-count in Sydney did not stop the index reaching its peak, but sellers moved in in the afternoon.<\/p>\n

The 110 case-count in Sydney has to be put into the context of a record 80,000-plus tests undertaken.<\/p>\n

The heavyweight sectors uniformly drove the market higher, with banks and energy up 1.4% and healthcare and materials up 1.2%.<\/p>\n

Consumer discretionary actually won the day with a 1.6% gain, despite a preliminary read on June retail sales showing a -1.8% fall. Economists had forecast -0.7%.<\/p>\n

As I have noted previously, we’re used to this now in the Days of Covid. The June data caught the start of the lockdowns, and July will be worse, but we’ve had enough lockdowns now to know sales outperform as soon as lockdowns are lifted, affecting little change on a net basis.<\/p>\n

Consumer staples, telcos, utilities and property all posted a gain of 0.5-0.8%, leaving the laggards as technology (+0.2%) and industrials (-0.1%).<\/p>\n

Technology has really settled down lately compared to the volatile times of the past, largely because that index is now dominated by a BNPL industry that appears to be increasingly risky amidst stiff competition and no barriers to entry.<\/p>\n

While retail sales bounce back quickly from lockdowns, toll roads, airlines and airports do not.<\/p>\n

Industrials closed lower despite first-cab-off-rank Cimic Group’s ((CIM)) earnings result, which led to a 4.5% gain. Oil Search rose another 3.6% on rumours the bid from Santos ((STO)) has brought Woodside Petroleum ((WPL)) into the race, having had a swing and a miss three years ago.<\/p>\n

On the subject of takeovers, Altium ((ALU)) was yesterday’s worst index performer, falling -5.0% after suitor Autodesk lost interest.<\/p>\n

Yesterday’s afternoon sellers will not be happy Wall Street has kicked on with it again last night and our futures are up 64 points this morning.<\/p>\n

The Aussie has come back a bit, iron ore was down -3% but Brent crude was up 5%, so perhaps a mixed day for the resource sectors.<\/p>\n

All Clear<\/u><\/p>\n

Wall Street’s swift as-you-were bounce on Tuesday night alleviated concerns that this time<\/em> a realistic (and overdue) correction was on the cards. So if it’s not going to correct, then it’s still a raging bull market.<\/p>\n

But as was the case in Australia, the bulk of last night’s gains were made from the opening bell. The major indices largely tracked sideways for the rest of the session.<\/p>\n

The shake-out has meant that the week’s earnings results are less likely to be met with “sell the fact” as they would be the case were indices still at all-time highs. To that end two big Dow names – Coca-Cola and Verizon — posted positive results last night and were rewarded. Beats to date are running at above 80%, as was that case last quarter.<\/p>\n

The S&P500 is nevertheless now within -1% below the last high.<\/p>\n

Not so positive was the response to Netflix. It reported in Tuesday night’s aftermarket and despite beating forecasts, new subscription guidance for the September quarter fell well short of expectation. That was worth -3.5% last night.<\/p>\n

Clearly, Netflix is never going to see another 2020, even if delta sends the world back into lockdown. The company is facing two issues in 2021 – everyone who wanted a subscription took one up when locked down last year, and last year’s lockdown meant no new content was produced to entice any new subscribers this year.<\/p>\n

By contrast, fast food chain Chipotle – another 2020 winner – reported sales in excess of pre-pandemic levels and jumped 12%. One doesn’t subscribe to Chipotle, one just eats the stuff.<\/p>\n

FANG is dead. Long live FAAMG.<\/p>\n

Apple was the only member of that group not to push ahead last night. Those floods in Zhengzhou? That’s where all the iPhones are made.<\/p>\n

In other news, blow me down if all 50 Republican senators didn’t vote against the infrastructure bill put forward by a bipartisan group of House members. Those senators have nonetheless suggested a deal is “close” (they always are), so it was not just a get stuffed Trumpist response.<\/p>\n

This bill required 60 senate votes. The other half of Biden’s package, dubbed “human stimulus” as it is largely to do with welfare, is considered a budget measure so needs only a majority vote.<\/p>\n

No, I don’t understand either.<\/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>\n1803.30<\/strong><\/span><\/td>\n– 6.60<\/strong><\/span><\/td>\n– 0.36%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n25.23<\/strong><\/span><\/td>\n+ 0.30<\/strong><\/span><\/td>\n1.20%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n4.21<\/strong><\/span><\/td>\n– 0.01<\/strong><\/span><\/td>\n– 0.25%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n1.12<\/strong><\/span><\/td>\n+ 0.02<\/strong><\/span><\/td>\n1.65%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n1.06<\/strong><\/span><\/td>\n+ 0.02<\/strong><\/span><\/td>\n1.98%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n8.36<\/strong><\/span><\/td>\n– 0.14<\/strong><\/span><\/td>\n– 1.65%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n1.32<\/strong><\/span><\/td>\n– 0.01<\/strong><\/span><\/td>\n– 0.74%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n70.30<\/strong><\/span><\/td>\n+ 2.88<\/strong><\/span><\/td>\n4.27%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n72.16<\/strong><\/span><\/td>\n+ 3.54<\/strong><\/span><\/td>\n5.16%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n213.60<\/strong><\/span><\/td>\n– 6.45<\/strong><\/span><\/td>\n– 2.93%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Aluminium has recovered some of Tuesday night’s loss and for iron ore, it is often a case these days of two steps forward and one step back. Iron ore’s still trading in a tight range around the US$220\/t mark, with demand still outstripping supply, and nothing much Beijing can do about it.<\/p>\n

Oil prices were ripe for a bounce-back and last night’s weekly US inventory numbers provided the catalyst. While inventories rose overall, oil stored at Cushing Oklahoma, from which the WTI futures price is derived, is at the lowest level since early 2020.<\/p>\n

After crashing all the way down to under US73c this week, the Aussie has rebounded from that intraday low yesterday on US dollar weakness (and likely short-covering) and is up 0.4% over 24 hours at US$0.7359.<\/p>\n

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

The SPI Overnight closed up 64 points or 0.9%.<\/p>\n

ABS preliminary numbers for the June trade balance are due today.<\/p>\n

The ECB meets tonight.<\/p>\n

Japan is closed today.<\/p>\n

June quarter production reports are due from Santos ((STO)), Newcrest Mining ((NCM)), Iluka Resources ((ILU)), Galaxy Resources ((GXY)) and Coronado Resources ((CRN)).<\/p>\n

Megaport ((MP1)) provides an update.<\/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
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS<\/span><\/td>\n<\/tr>\n
ABP<\/td>\nAbacus Property<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
ARF<\/td>\nArena REIT<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
CCP<\/td>\nCredit Corp<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
COH<\/td>\nCochlear<\/td>\nDowngrade to Equal-weight from Overweight<\/td>\nMorgan Stanley<\/td>\n<\/tr>\n
CPU<\/td>\nComputershare<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
DMP<\/td>\nDomino's Pizza Enterprises<\/td>\nDowngrade to Underperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
EVN<\/td>\nEvolution Mining<\/td>\nUpgrade to Neutral from Sell<\/td>\nCiti<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Neutral from Outperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Underperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
HUB<\/td>\nHUB24<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
LNK<\/td>\nLink Administration<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
MPL<\/td>\nMedibank Private<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/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":"

It was all just a bad dream. Equity markets are back to where they were. Dow up 286. (Available for non-subscribers after 10am)<\/p>\n","protected":false},"author":8,"featured_media":95311,"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\/95307"}],"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=95307"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/95307\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/95311"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=95307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=95307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=95307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}