##{"id":97957,"date":"2021-11-16T09:07:56","date_gmt":"2021-11-15T22:07:56","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=97957"},"modified":"2021-11-16T13:25:49","modified_gmt":"2021-11-16T02:25:49","slug":"the-overnight-report-retail-in-focus","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2021\/11\/16\/the-overnight-report-retail-in-focus\/","title":{"rendered":"The Overnight Report: Retail In Focus"},"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<\/strong><\/span><\/td>\n7433.00<\/strong><\/span><\/td>\n– 36.00<\/strong><\/span><\/td>\n– 0.48%<\/strong><\/span><\/td>\n<\/tr>\n
S&P ASX 200<\/strong><\/span><\/td>\n7470.10<\/strong><\/span><\/td>\n+ 27.10<\/strong><\/span><\/td>\n0.36%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500<\/strong><\/span><\/td>\n4682.80<\/strong><\/span><\/td>\n– 0.05<\/strong><\/span><\/td>\n– 0.00%<\/strong><\/span><\/td>\n<\/tr>\n
Nasdaq Comp<\/strong><\/span><\/td>\n15853.85<\/strong><\/span><\/td>\n– 7.11<\/strong><\/span><\/td>\n– 0.04%<\/strong><\/span><\/td>\n<\/tr>\n
DJIA<\/strong><\/span><\/td>\n36087.45<\/strong><\/span><\/td>\n– 12.86<\/strong><\/span><\/td>\n– 0.04%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500 VIX<\/strong><\/span><\/td>\n16.49<\/strong><\/span><\/td>\n+ 0.20<\/strong><\/span><\/td>\n1.23%<\/strong><\/span><\/td>\n<\/tr>\n
US 10-year yield<\/strong><\/span><\/td>\n1.62<\/strong><\/span><\/td>\n+ 0.04<\/strong><\/span><\/td>\n2.59%<\/strong><\/span><\/td>\n<\/tr>\n
USD Index<\/strong><\/span><\/td>\n95.50<\/strong><\/span><\/td>\n+ 0.37<\/strong><\/span><\/td>\n0.39%<\/strong><\/span><\/td>\n<\/tr>\n
FTSE100<\/strong><\/span><\/td>\n7351.86<\/strong><\/span><\/td>\n+ 3.95<\/strong><\/span><\/td>\n0.05%<\/strong><\/span><\/td>\n<\/tr>\n
DAX30<\/strong><\/span><\/td>\n16148.64<\/strong><\/span><\/td>\n+ 54.57<\/strong><\/span><\/td>\n0.34%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

By Greg Peel<\/p>\n

Chinese Resilience<\/u><\/p>\n

After the ASX200 rallied strongly on Friday, the futures were showing down -3 points on Saturday despite another gain on Wall Street. But that was ignored yesterday morning when the index rose 36 points to midday.<\/p>\n

It was a bold call ahead of the midday release of the monthly China “data dump”. Two significant factors that have been impacting on the Chinese economy of late have been the property market crisis, which has seen house price declines in 50 of China’s 70 major cities, which in turn impacts on household wealth and consumer spending sentiment, and power cuts impacting on production and manufacturing.<\/p>\n

So the numbers may not have been rosy. But as it turns out, Chinese retail sales rose 4.9% year on year in October when 3.5% was forecast, and industrial production rose 3.5% when 3.0% was forecast.<\/p>\n

Fixed asset investment rose 6.1% year to date, slightly missing 6.2% forecasts.<\/p>\n

Despite the better than expected numbers, the ASX200 traded lower in choppy fashion in the afternoon. And this morning, with Wall Street flat and no major moves in commodities prices, the futures are down -36 points.<\/p>\n

So back to square one, it seems.<\/p>\n

Leading the index higher yesterday was healthcare (+1.2%), which makes a change from the recent trend, thanks to a 5.2% gain for ResMed ((RMD)) and 3.9% for Fisher & Paykel Healthcare ((FPH)), along with an 11.8% index-topping move for Mesoblast ((MSB)) on a positive phase III trial of its cardiac treatment.<\/p>\n

Consumer discretionary was next best on 1.2% and technology, or should we say Square, on 1.0%.<\/p>\n

It appeared as if the big cap sectors of banks and materials sat this one out, both closing flat. The banks had to overcome National Bank ((NAB)) going ex-dividend and, among the big miners, BHP Group ((BHP)) and Rio Tinto ((RIO)) fell with the iron ore price while for rival Fortescue Metals ((FMG)), it’s now all about hydrogen excitement.<\/p>\n

Among the day’s earnings reporters, Incitec Pivot ((IPL)) rose 3.8%, while, despite posting a solid beat and hailing excellent trading conditions to start FY22, Elders fell -0.7%. It was a clear sell-the-fact, as all ag stocks have rallied hard recently on favourable weather (ie rain, which sometimes can get just a bit carried away).<\/p>\n

As to why the futures are down -36 points this morning with the S&P500 down -0.05%  is unclear, unless someone is set to slap a sell order on from the open.<\/p>\n

Nothing to see here<\/u><\/p>\n

The US ten-year bond yield rose 4 points last night to 1.62%, bringing into focus the 1.75% previous high set earlier in the year when the inflation scare first manifested. Every time it looks like the ten-year may be on its way to a much anticipated 2% by year-end, it drops down again.<\/p>\n

The US yield curve steepened implying faith in the economy in the face of inflation, but a widening of the spread to the German ten-year underscores the belief the Fed will move on rates a lot earlier than the ECB.<\/p>\n

Europe is still struggling to control covid.<\/p>\n

Stock markets nonetheless shrugged and took a breather last night. Traders are looking ahead to this week’s round of earnings results from major retailers. Will elevated US household savings and pent-up post-lockdown demand be reflected in September quarter results from the likes of Target, Lowe’s, Walmart and Home Depot?<\/p>\n

Last week’s Michigan Uni consumer sentiment index came in at a decade low, with inflation concerns the major culprit.<\/p>\n

Another overriding concern is just how overvalued some of the Big Tech names have become. Tesla is included in that list of course, despite having fallen -14% since Elon started offloading stock to pay his tax bill.<\/p>\n

There’s been a lot of attention on chip-making leader Nvidia, which has been riding the newfound appreciation of the future of the “metaverse”, underscored by Facebook’s name change and announced metaverse spending drive. Nvidia is trading at 65x forward earnings.<\/p>\n

Market darling Microsoft is another included in the 'overvalued' group.<\/p>\n

If we all had a dollar for every time such stocks have been called 'overvalued' since the covid rebound then we wouldn’t need to invest in them. Every time the Nasdaq appears to swoon, it lasts all of about five minutes.<\/p>\n

In other news, President Biden signed off on the bipartisan infrastructure bill with the usual pomp and ceremony on the White House lawn this morning, inviting along a small group of bipartisan Congress people. And only a small group it would be.<\/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>\n1862.70<\/strong><\/span><\/td>\n– 2.50<\/strong><\/span><\/td>\n– 0.13%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n25.05<\/strong><\/span><\/td>\n– 0.26<\/strong><\/span><\/td>\n– 1.03%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n4.47<\/strong><\/span><\/td>\n– 0.06<\/strong><\/span><\/td>\n– 1.26%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n1.20<\/strong><\/span><\/td>\n– 0.01<\/strong><\/span><\/td>\n– 0.69%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n1.07<\/strong><\/span><\/td>\n– 0.01<\/strong><\/span><\/td>\n– 1.02%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n8.96<\/strong><\/span><\/td>\n– 0.11<\/strong><\/span><\/td>\n– 1.19%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n1.48<\/strong><\/span><\/td>\n– 0.02<\/strong><\/span><\/td>\n– 1.14%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n80.92<\/strong><\/span><\/td>\n+ 0.13<\/strong><\/span><\/td>\n0.16%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n82.06<\/strong><\/span><\/td>\n– 0.11<\/strong><\/span><\/td>\n– 0.13%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n89.15<\/strong><\/span><\/td>\n– 0.60<\/strong><\/span><\/td>\n– 0.67%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Better than expected Chinese data did little to support metals prices last night, but a relentlessly rising US dollar, which will rise on a steeper yield curve, is providing a headwind.<\/p>\n

The oils remain in limbo as traders await a decision form the White House about a release from the Strategic Reserve, and how much. In considering US inflation concerns and weak consumer sentiment, note WTI crude is up 66% year to date.<\/p>\n

Despite a 0.4% gain for the US dollar index, the Aussie is up 0.3%, again suggesting the market had been too short.<\/p>\n

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

The SPI Overnight closed down -36 points or -0.5%.<\/p>\n

The minutes of the November RBA meeting are out today.<\/p>\n

The US will see retail sales and industrial production numbers tonight, just to add to retail anticipation.<\/p>\n

Mirvac ((MGR)) is among a small group of AGM holders today.<\/p>\n

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

<\/p>\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
ASB<\/td>\nAustal<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
COL<\/td>\nColes Group<\/td>\nUpgrade to Buy from Neutral<\/td>\nCiti<\/td>\n<\/tr>\n
JBH<\/td>\nJB Hi-Fi<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
MTS<\/td>\nMetcash<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
ORI<\/td>\nOrica<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Neutral from Buy<\/td>\nCiti<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
QUB<\/td>\nQube Holdings<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
RHC<\/td>\nRamsay Health Care<\/td>\nDowngrade to Accumulate from Buy<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
SRV<\/td>\nServcorp<\/td>\nDowngrade to Neutral from Buy<\/td>\nUBS<\/td>\n<\/tr>\n
SSG<\/td>\nShaver Shop<\/td>\nUpgrade to Accumulate from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
UWL<\/td>\nUniti Group<\/td>\nUpgrade to Accumulate from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
XRO<\/td>\nXero<\/td>\nUpgrade to Buy from Neutral<\/td>\nCiti<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nUpgrade to Hold from Lighten<\/td>\nOrd Minnett<\/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":"

Wall Street took a breather last night ahead of data for retail sales and earnings reports from major retailers. Dow down -12. (Available for non-subscribers after 10am)<\/p>\n","protected":false},"author":8,"featured_media":97972,"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\/97957"}],"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=97957"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/97957\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/97972"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=97957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=97957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=97957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}