##{"id":95977,"date":"2021-08-23T09:05:38","date_gmt":"2021-08-22T23:05:38","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=95977"},"modified":"2021-08-23T09:05:40","modified_gmt":"2021-08-22T23:05:40","slug":"the-monday-report-23-august-2021","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2021\/08\/23\/the-monday-report-23-august-2021\/","title":{"rendered":"The Monday Report – 23 August 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 (Jun)<\/strong><\/span><\/td>\n7423.00<\/strong><\/span><\/td>\n+ 35.00<\/strong><\/span><\/td>\n0.47%<\/strong><\/span><\/td>\n<\/tr>\n
S&P ASX 200<\/strong><\/span><\/td>\n7460.90<\/strong><\/span><\/td>\n– 3.70<\/strong><\/span><\/td>\n– 0.05%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500<\/strong><\/span><\/td>\n4441.67<\/strong><\/span><\/td>\n+ 35.87<\/strong><\/span><\/td>\n0.81%<\/strong><\/span><\/td>\n<\/tr>\n
Nasdaq Comp<\/strong><\/span><\/td>\n14714.66<\/strong><\/span><\/td>\n+ 172.88<\/strong><\/span><\/td>\n1.19%<\/strong><\/span><\/td>\n<\/tr>\n
DJIA<\/strong><\/span><\/td>\n35120.08<\/strong><\/span><\/td>\n+ 225.96<\/strong><\/span><\/td>\n0.65%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500 VIX<\/strong><\/span><\/td>\n18.56<\/strong><\/span><\/td>\n– 3.11<\/strong><\/span><\/td>\n– 14.35%<\/strong><\/span><\/td>\n<\/tr>\n
US 10-year yield<\/strong><\/span><\/td>\n1.26<\/strong><\/span><\/td>\n+ 0.02<\/strong><\/span><\/td>\n1.45%<\/strong><\/span><\/td>\n<\/tr>\n
USD Index<\/strong><\/span><\/td>\n93.50<\/strong><\/span><\/td>\n– 0.06<\/strong><\/span><\/td>\n– 0.06%<\/strong><\/span><\/td>\n<\/tr>\n
FTSE100<\/strong><\/span><\/td>\n7087.90<\/strong><\/span><\/td>\n+ 29.04<\/strong><\/span><\/td>\n0.41%<\/strong><\/span><\/td>\n<\/tr>\n
DAX30<\/strong><\/span><\/td>\n15808.04<\/strong><\/span><\/td>\n+ 42.23<\/strong><\/span><\/td>\n0.27%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

By Greg Peel<\/p>\n

In for the Long Haul<\/u><\/p>\n

A fightback on Wall Street on Thursday night had the ASX200 up 48 points from the open on Friday, before peaking out at 10.45am. At 11am, Gladys announced the inevitable of a month-long extension to the Sydney lockdown, before new cases hit the 800s over the weekend.<\/p>\n

Why can’t she just say “until further notice”? These incremental extensions only serve to raise the hopes of small businesses, only to dash them again.<\/p>\n

It was a fairly swift move thereafter back to square, before not much action through to the close. Earnings were nonetheless in focus again, underscoring sector moves.<\/p>\n

The comeback in the US was defensively led, and then mimicked here on Friday. Utilities (1.5%), staples (+1.2%) and property (+1.0%) were the best performers.<\/p>\n

Staples were boosted by result responses for Treasury Wine Estates  ((TWE)), which gained 5.6% and Inghams Group ((ING)), up 4.6%.<\/p>\n

Healthcare should have been in the mix as a defensive as well, but was weighed down by Cochlear ((COH)) falling -7.4% on result, thus only managed a 0.2% sector gain.<\/p>\n

Materials (-1.0%) succumbed to another big iron ore price plunge, more selling in the volatile lithium miners, and ongoing selling in Lynas Rare Earths ((LYC)) on Malaysian political disruption. Lynas fell -6.9% (new president confirmed over the weekend), while Orocobre ((ORE)) and Pilbara Minerals ((PLS)) led down the battery squad with -5%-plus falls.<\/p>\n

Index winner on the day was Redbubble ((RBL)), up 15.7%, and has become so ridiculously volatile we might as well call it a meme stock.<\/p>\n

Wall Street put on a more widespread comeback rally on Friday night, and our futures closed up 35 points on Saturday morning. Whether the 800-plus NSW case numbers over the weekend will impact the market today is unclear, given a lockdown extension has already been announced, and given the market only responds to delta on the odd day.<\/p>\n

The other overriding factor this week – Wall Street notwithstanding – is the fact that while we might be in Week 4 of the August result season, we still have two-thirds of companies left to report. As it stood last week, beats were running at a ratio of 39% to 19% misses, which both are indicative of a good season.<\/p>\n

But two themes have become apparent up to now – a return to the theme of the season one year ago of few companies being confident enough to issue guidance in the face of covid, and result misses being hammered a lot harder than beats are rewarded. “Misses” include responses to companies pointing out a poor start to FY22 and uncertain outlook given delta’s grip on Australia.<\/p>\n

Can’t keep a good market down<\/u><\/p>\n

Having tumbled for a couple of sessions last week, on both delta and Fed tapering concerns, Wall Street staged a half-hearted comeback on Thursday night in which defensive sectors led but cyclicals remained weak. This seemed to be good enough for the dip-buyers to remerge on Friday night.<\/p>\n

All sectors closed in the green. All three major indices closed lower for the week, but within the S&P500, healthcare closed the week up 1.8%, utilities up 1.8%, and staples 0.4%. Among the cyclicals, energy fell -7.3% and banks -2.3%.<\/p>\n

It was a solid comeback for the Nasdaq. Microsoft made a new high, but with well-established “old tech” being classed as defensive, had made new highs all week. The bounce-back was more apparent in growth stocks among the tech world, which are more exposed to monetary policy.<\/p>\n

On Friday night Dallas Fed president Robert Kaplan said he may reconsider his call for the Fed to start tapering immediately if it looks like the spread of delta is slowing economic growth. The seven-day average of new cases across the US rose to over 140,000 last week, up 44% since February.<\/p>\n

Can’t see how that can boost economic growth.<\/p>\n

We must remember that what set Wall Street off last week were the minutes of the Fed meeting held in late July, and August has not exactly raised any hopes on the covid front.<\/p>\n

So we might say Friday night was another sign of Wall Street’s tendency to play the “bad news is good” card when it comes to Fed support. In this case, not removing support too soon.<\/p>\n

Commodities<\/u><\/p>\n

Some reprieve in commodity land on Friday night. Copper halted its fall and iron ore bounced hard. Or at least we would have called 7% “hard” before this month, before the astonishing plunge.<\/p>\n

Gold traders are all on holiday but the saga continues for the oils, which commentators suggest is about delta and nothing else.<\/p>\n

The Aussie continues its drift back towards “fair value” (which for a long time has been considered to be US67c), falling another -0.2% to US$0.7133.<\/p>\n

The SPI Overnight closed up 35 points or 0.5% on Saturday morning.<\/p>\n

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

A deluge of local earnings reports.<\/p>\n

Today brings flash estimates of August PMIs from across the globe.<\/p>\n

The US will see numbers for new and existing home sales and durable goods orders. While a revision of June quarter GDP on Thursday will hardly be worth the effort, numbers for PCE inflation and consumer sentiment on Friday will be closely watched.<\/p>\n

The Jackson Hole central banker’s meeting begins on Thursday and runs into the weekend.<\/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>\n1780.70<\/strong><\/span><\/td>\n+ 0.30<\/strong><\/span><\/td>\n0.02%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n23.02<\/strong><\/span><\/td>\n– 0.22<\/strong><\/span><\/td>\n– 0.95%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n4.08<\/strong><\/span><\/td>\n+ 0.04<\/strong><\/span><\/td>\n1.00%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n1.16<\/strong><\/span><\/td>\n– 0.00<\/strong><\/span><\/td>\n– 0.15%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n1.12<\/strong><\/span><\/td>\n+ 0.01<\/strong><\/span><\/td>\n1.15%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n8.39<\/strong><\/span><\/td>\n– 0.03<\/strong><\/span><\/td>\n– 0.38%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n1.33<\/strong><\/span><\/td>\n– 0.00<\/strong><\/span><\/td>\n– 0.10%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n62.14<\/strong><\/span><\/td>\n– 1.55<\/strong><\/span><\/td>\n– 2.43%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n68.18<\/strong><\/span><\/td>\n+ 1.65<\/strong><\/span><\/td>\n2.48%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n139.10<\/strong><\/span><\/td>\n+ 8.90<\/strong><\/span><\/td>\n6.84%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Some reprieve in commodity land on Friday night. Copper halted its fall and iron ore bounced hard. Or at least we would have called 7% “hard” before this month, before the astonishing plunge.<\/p>\n

Gold traders are all only holiday but the saga continues for the oils, which commentators suggest is about delta and nothing else.<\/p>\n

The Aussie continues its drift back towards “fair value” (which for a long time has been considered to be US67c), falling another -0.2% to US$0.7133.<\/p>\n

The SPI Overnight closed up 35 points or 0.5% on Saturday morning.<\/p>\n

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

A deluge of local earnings reports.<\/p>\n

Today brings flash estimates of August PMIs from across the globe.<\/p>\n

The US will see numbers for new and existing home sales and durable goods orders. While a revision of June quarter GDP on Thursday will hardly be worth the effort, numbers for PCE inflation and consumer sentiment on Friday will be closely watched.<\/p>\n

The Jackson Hole central banker’s meeting begins on Thursday and runs into the weekend.<\/p>\n

A reporting calendar and summaries of analyst responses to the day’s results are available on the FNArena Corporate Results Monitor<\/a>.<\/p>\n

(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\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
ARB<\/td>\nARB Corp<\/td>\nDowngrade to Underperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Hold from Accumulate<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
ASX<\/td>\nASX<\/td>\nDowngrade to Sell from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
AVN<\/td>\nAventus Group<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Neutral from Buy<\/td>\nUBS<\/td>\n<\/tr>\n
BAP<\/td>\nBapcor<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
BLX<\/td>\nBeacon Lighting<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
BXB<\/td>\nBrambles<\/td>\nDowngrade to Equal-weight from Overweight<\/td>\nMorgan Stanley<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
CDP<\/td>\nCarindale Property Trust<\/td>\nUpgrade to Buy from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
CNU<\/td>\nChorus<\/td>\nDowngrade to Sell from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
CTD<\/td>\nCorporate Travel Management<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
DHG<\/td>\nDomain Australia<\/td>\nUpgrade to Buy from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
EBO<\/td>\nEBOS Group<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
HDN<\/td>\nHomeCo Daily Needs REIT<\/td>\nDowngrade to Accumulate from Buy<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
NCM<\/td>\nNewcrest Mining<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
NWL<\/td>\nNetwealth Group<\/td>\nUpgrade to Outperform from Underperform<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Buy from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
ORA<\/td>\nOrora<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
OZL<\/td>\nOZ Minerals<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
PGH<\/td>\nPact Group<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
RBL<\/td>\nRedbubble<\/td>\nUpgrade to Add from Hold<\/td>\nMorgans<\/td>\n<\/tr>\n
SGF<\/td>\nSG Fleet<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
SGM<\/td>\nSims<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Neutral from Buy<\/td>\nUBS<\/td>\n<\/tr>\n
SXL<\/td>\nSouthern Cross Media<\/td>\nUpgrade to Outperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
VCX<\/td>\nVicinity Centres<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
WAF<\/td>\nWest African Resources<\/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

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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":95979,"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\/95977"}],"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=95977"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/95977\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/95979"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=95977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=95977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=95977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}