##{"id":99514,"date":"2022-02-09T09:01:49","date_gmt":"2022-02-08T22:01:49","guid":{"rendered":"https:\/\/www.fnarena.com\/?p=99514"},"modified":"2022-02-09T13:21:11","modified_gmt":"2022-02-09T02:21:11","slug":"the-overnight-report-inflation-be-damned","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2022\/02\/09\/the-overnight-report-inflation-be-damned\/","title":{"rendered":"The Overnight Report: Inflation Be Damned"},"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>\n7102.00<\/strong><\/span><\/td>\n+ 18.00<\/strong><\/span><\/td>\n0.25%<\/strong><\/span><\/td>\n<\/tr>\n
S&P ASX 200<\/strong><\/span><\/td>\n7186.70<\/strong><\/span><\/td>\n+ 75.90<\/strong><\/span><\/td>\n1.07%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500<\/strong><\/span><\/td>\n4521.54<\/strong><\/span><\/td>\n+ 37.67<\/strong><\/span><\/td>\n0.84%<\/strong><\/span><\/td>\n<\/tr>\n
Nasdaq Comp<\/strong><\/span><\/td>\n14194.46<\/strong><\/span><\/td>\n+ 178.79<\/strong><\/span><\/td>\n1.28%<\/strong><\/span><\/td>\n<\/tr>\n
DJIA<\/strong><\/span><\/td>\n35462.78<\/strong><\/span><\/td>\n+ 371.65<\/strong><\/span><\/td>\n1.06%<\/strong><\/span><\/td>\n<\/tr>\n
S&P500 VIX<\/strong><\/span><\/td>\n21.44<\/strong><\/span><\/td>\n– 1.42<\/strong><\/span><\/td>\n– 6.21%<\/strong><\/span><\/td>\n<\/tr>\n
US 10-year yield<\/strong><\/span><\/td>\n1.95<\/strong><\/span><\/td>\n+ 0.04<\/strong><\/span><\/td>\n1.98%<\/strong><\/span><\/td>\n<\/tr>\n
USD Index<\/strong><\/span><\/td>\n95.60<\/strong><\/span><\/td>\n+ 0.17<\/strong><\/span><\/td>\n0.18%<\/strong><\/span><\/td>\n<\/tr>\n
FTSE100<\/strong><\/span><\/td>\n7567.07<\/strong><\/span><\/td>\n– 6.40<\/strong><\/span><\/td>\n– 0.08%<\/strong><\/span><\/td>\n<\/tr>\n
DAX30<\/strong><\/span><\/td>\n15242.38<\/strong><\/span><\/td>\n+ 35.74<\/strong><\/span><\/td>\n0.24%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

By Greg Peel<\/p>\n

Material Gains<\/u><\/p>\n

After a soft close on Wall Street, our futures were showing down -11 points yesterday morning. Not sure why, as from the opening bell the ASX200 shot up in a straight line to hit 7200 at midday. This prompted some afternoon selling, but the buyers fought back.<\/p>\n

It was all about the two biggest sectors – materials and financials.<\/p>\n

As the iron ore price nipped at the heels of US$150\/t, spurred on by expectations of further Chinese stimulus to boost a slowing economy, BHP Group ((BHP)) rose 3.7% and the others followed. Materials rose 2.2%.<\/p>\n

An unexpectedly solid earnings result from Suncorp Group ((SUN)) saw it up 5.5%, and a record quarter from Macquarie Group ((MQG)), worth 3.9%, helped financials up 1.4%. An upgrade to Outperform for ANZ Bank ((ANZ)) from Credit Suisse, to put six from seven FNArena database brokers on Buy or equivalent ratings post the bank’s weak update, led to a 1.5% bounce.<\/p>\n

The banks in general were also boosted by a full 13 point jump for the Aussie ten-year yield to 2.09%. Some days the market sees higher yields as good for banks (better margins), and some days bad (mortgage stress). Tomorrow the RBA will end its QE program, meaning it will no longer be buying bonds (other than to replace maturing bonds), allowing yields to run free.<\/p>\n

Speaking of open fields, CSL ((CSL)) has also now been emancipated following the conclusion on Monday of price discovery for its capital raising, with the volume-weighted average price (VWAP) period coming to an end. Healthcare rose 0.7% yesterday.<\/p>\n

Consumer discretionary rose 0.6% on Day Two of travel agent short covering. Webjet ((WEB)) topped the index with another 7.4%, with Flight Centre ((FLT)) up 6.7%.<\/p>\n

Only two sectors closed in the red yesterday. Staples fell -0.8%, as supermarkets battle with empty shelves. Technology was a good chance to fall -1.6% on the bond yield surge, but as usual was dragged down by Block ((SQ2)), which fell -6.3%.<\/p>\n

A -7.4% fall for Appen ((APX)) and -4.8% for Nanosonics ((NAN)) rounded out the top three index losers on the day.<\/p>\n

NAB’s business survey for January, out yesterday, showed a -5 point fall in business conditions to +3 points (zero-neutral), as businesses battled with supply and staff shortages. But confidence surged 15 points to +3, as businesses can see a light at the end of the tunnel, once we’ve all been sick.<\/p>\n

The confidence jump had nothing to do with the reopening of the border, as some ABC business reporters might tell you. January survey Alan.<\/p>\n

Technically, 7200 is the pivotal point in the recovery rally. If we can push through, the signs are positive. If not, we’re heading back down again.<\/p>\n

The Dow was up 370 points overnight, so we’re on our way, except our futures are up only a timid 18 points this morning, so caution still applies.<\/p>\n

Diplomatic Distractions<\/u><\/p>\n

Armed with a bottle of Moet and a round of Brie, Emmanuelle Macron travelled to Moscow to chat with Putin, undaunted by the 1812 Overture playing in the background. Dropping into Kyiv on the way home, Macron suggested hopes have risen that Russia will not invade Ukraine.<\/p>\n

(Whatever happened to “Kiev”? Chickens are confused.)<\/p>\n

Meanwhile, talks are reported to be progressing between the US and Iran regarding the reinstatement of the Trump-dumped nuclear deal.<\/p>\n

The former lifted Wall Street spirits, while the latter had oil prices down over -2%. If a deal is reached then Iranian oil will again hit the market, accounting for 1% of global supply.<\/p>\n

Despite the distractions, Wall Street is enjoying an earnings season to date that has not proven as bad as feared. Analysts had marked down earnings forecasts as supply and labour shortages swept across all markets, sending input prices soaring, and as usual they marked them down too far on average.<\/p>\n

This happens almost every quarter. That’s why the average earnings “beat” ratio since the beginning of time is over 60%.<\/p>\n

Harley Davidson jumped 14% last night on its result. Ticker code; HOG.<\/p>\n

Relief on the geopolitical and earnings fronts allowed the Nasdaq to gain 1.3% despite the US ten-year yield rising 4 points to 1.95%. The last time the yield was at 2% was in August 2019.<\/p>\n

Meta fell -4.7%.<\/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>\n1826.90<\/strong><\/span><\/td>\n+ 6.30<\/strong><\/span><\/td>\n0.35%<\/strong><\/span><\/td>\n<\/tr>\n
Silver (oz)<\/strong><\/span><\/td>\n23.18<\/strong><\/span><\/td>\n+ 0.16<\/strong><\/span><\/td>\n0.70%<\/strong><\/span><\/td>\n<\/tr>\n
Copper (lb)<\/strong><\/span><\/td>\n4.41<\/strong><\/span><\/td>\n– 0.03<\/strong><\/span><\/td>\n– 0.64%<\/strong><\/span><\/td>\n<\/tr>\n
Aluminium (lb)<\/strong><\/span><\/td>\n1.45<\/strong><\/span><\/td>\n+ 0.03<\/strong><\/span><\/td>\n2.23%<\/strong><\/span><\/td>\n<\/tr>\n
Lead (lb)<\/strong><\/span><\/td>\n1.00<\/strong><\/span><\/td>\n– 0.01<\/strong><\/span><\/td>\n– 0.58%<\/strong><\/span><\/td>\n<\/tr>\n
Nickel (lb)<\/strong><\/span><\/td>\n10.53<\/strong><\/span><\/td>\n– 0.21<\/strong><\/span><\/td>\n– 1.99%<\/strong><\/span><\/td>\n<\/tr>\n
Zinc (lb)<\/strong><\/span><\/td>\n1.64<\/strong><\/span><\/td>\n– 0.01<\/strong><\/span><\/td>\n– 0.47%<\/strong><\/span><\/td>\n<\/tr>\n
West Texas Crude <\/strong><\/span><\/td>\n89.35<\/strong><\/span><\/td>\n– 2.08<\/strong><\/span><\/td>\n– 2.27%<\/strong><\/span><\/td>\n<\/tr>\n
Brent Crude<\/strong><\/span><\/td>\n90.81<\/strong><\/span><\/td>\n– 1.99<\/strong><\/span><\/td>\n– 2.14%<\/strong><\/span><\/td>\n<\/tr>\n
Iron Ore (t)<\/strong><\/span><\/td>\n149.95<\/strong><\/span><\/td>\n+ 0.55<\/strong><\/span><\/td>\n0.37%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Some ups and downs in base metals but a close above US$150\/t for iron ore seems all but inevitable.<\/p>\n

Gold continues to very quietly tick up, but we’ve been here often enough in the past months.<\/p>\n

Oils as explained.<\/p>\n

The Aussie is up 0.3% at US$0.7146.<\/p>\n

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

The SPI Overnight closed up 18 points or 0.3%.<\/p>\n

Westpac will release its consumer confidence survey for February today.<\/p>\n

Commonwealth Bank ((CBA)) reports earnings, along with a slew of smaller names.<\/p>\n

ResMed ((RMD)) goes ex.<\/p>\n

For upcoming earnings result dates, and a summary of results to date, please refer to the<\/em> FNArena Corporate Results Monitor<\/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
BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS<\/span><\/td>\n<\/tr>\n
ANZ<\/td>\nANZ Bank<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
APA<\/td>\nAPA Group<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
COF<\/td>\nCenturia Office REIT<\/td>\nUpgrade to Outperform from Neutral<\/td>\nCredit Suisse<\/td>\n<\/tr>\n
DMP<\/td>\nDomino's Pizza Enterprises<\/td>\nUpgrade to Buy from Neutral<\/td>\nUBS<\/td>\n<\/tr>\n
GNC<\/td>\nGrainCorp<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
JHG<\/td>\nJanus Henderson<\/td>\nDowngrade to Neutral from Outperform<\/td>\nMacquarie<\/td>\n<\/tr>\n
LLC<\/td>\nLendlease Group<\/td>\nUpgrade to Accumulate from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
NEA<\/td>\nNearmap<\/td>\nDowngrade to Underperform from Neutral<\/td>\nMacquarie<\/td>\n<\/tr>\n
OZL<\/td>\nOZ Minerals<\/td>\nDowngrade to Hold from Add<\/td>\nMorgans<\/td>\n<\/tr>\n
SUL<\/td>\nSuper Retail<\/td>\nUpgrade to Accumulate from Hold<\/td>\nOrd Minnett<\/td>\n<\/tr>\n
TNE<\/td>\nTechnologyOne<\/td>\nUpgrade to Neutral from Sell<\/td>\nUBS<\/td>\n<\/tr>\n
WES<\/td>\nWesfarmers<\/td>\nDowngrade to Hold from Accumulate<\/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

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":"

Ahead of Thursday’s US CPI release, Wall Street has reignited its recovery. Dow up 371. (Available for non-subscribers after 10am)<\/p>\n","protected":false},"author":8,"featured_media":99526,"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\/99514"}],"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=99514"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/99514\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media\/99526"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=99514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=99514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=99514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}