Market Updates

ASX 200 falls only 34 points to 7504 (0.5%). We performed better than SPI suggested as US futures rallied a little. Volume and news was a little light on as we approach the Xmas break. Banks eased back slightly with the Big Bank Basket down to $189.72(-0.3%). ANZ slightly higher after AGM comments, MQG slid 0.9% and other financials eased, GQG down 5.0%. REITs eased too as bond yields fell to 4.01%. Industrials were mixed with TCL up 0.9%, BXB up 1.0% and staples a little weaker. Nothing significant. Healthcare in a similar vein, CSL eased 0.5% with RMD up another 0.7%. In resources, lithium stocks under pressure as Macquarie downgraded underlying lithium prices, PLS fell 3.4%, LTR down 8.3% on a royalty issue. Gold miners slipped a little, NEM down 1.6% and oil and gas off too. In corporate news, In corporate news, SFR has issued an update on the Motheo copper mine. TIE maintains its unanimous recommendation for holders to reject Zhaojin's offer. RPL fell 2.2% after it successfully concluded the acquisition of PM Capital Ltd, as previously announced. Meanwhile, BUB has secured $17m for its US expansion efforts. Nothing on the economic front except a jump in household wealth by 2.3% in Sept quarter. Asian markets fell on US falls, Japan down 1.6%, HK down 0.2% and China up 0.5%.

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The Dow Jones Industrial Average slid 475.92 points, or 1.27%, to 37,082.00. The Nasdaq Composite was lower by 1.50% to 14,777.94. Both indexes ended a nine-day advance, and they had their worst session since October. The S&P 500 declined 1.47% to 4,698.35, marking its worst day since September.

ASX SPI Futures down 73 Points.

• All sectors in the S&P 500 finished in the red, with consumer discretionary falling the sharpest, down 1.28%.
• Base metals finished mixed. Nickel +0.66%, Zinc +0.58%, Lead +0.27%, and Tin +0.16%.
• Copper fell 0.17% after touching its highest levels in more than four-and-a-half months on restocking in China before a stronger dollar weighed on the market.  
• Aluminium fell for a second consecutive session, down 1.04% after rising over 8% in the past week.
• Dalian iron ore rebounded 1.14%, supported by low inventories and expectations of a flurry of restocking for winter.
• 10Y Bond Yields – US 3.853%, Australia 4.352%, and Germany 1.967%.
• Gold fell 0.48%.
• USD Index gained 0.32%, and the Aussie dollar fell 0.46% to 67.30US cents.

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ASX 200 up another 49 points to 7538 (0.7%). Another day another push towards 7600. Across the board gains with banks in demand again, ANZ up 0.7% and WBC up 1.0%. The Big Bank Basket trading at $190.21(0.5%). MQG kicked 0.9% higher with GQG doing very well up 1.5%. Insurers slightly better, REITS in demand, SCG up 1.0% and SGP up 1.6%.  Industrials better again, WES up 1.0%, WOW up 0.8% and TLS up 1.8%. Tech a little mixed, WTC down 1.3% and XRO up 0.2% with the All-Tech Index up 0.2%. Retailers in demand, PMV up 0.3%, SUL up 1.7% and LOV doing well up 2.5%. Xmas is coming. Not for KMD which warned on sales falling 8.0%. Resources better, iron ore stocks seem to be running out of juice, FMG down 0.8% and BHP up only 0.4%. Lithium stocks rebounding a little, IGO up 2.3% and MIN rising 0.5%. Gold miners better again, GMD up 2.3% and NST rallying 1.6%. Oil and gas stock in the green, WDS up 0.6% and KAR up 2.0%. In corporate news, CHN CEO called for a ban on short selling, ORI dropped 2.5% on a Canadian acquisition, Terra for $560m. PXA fell 11.8% on a Smoove update and TCL saw some board changes. Nothing on the economic front, In Asia China left rates unchanged, Japan up another 1.6%, China down 0.5% and HK up 1%. 10-year yields steady at 4.05%

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Wall Street finished higher overnight near best levels, extending its rally while shrugging off warnings from Fed officials trying to rein in rate cut expectations. The Dow nabbed another all-time closing high, up 252 points (+0.68%). Dow up 257 at best. The S&P 500 rose 0.59% and is now within one percentage point of its all-time closing high. The NASDAQ 100 hit another all-time high, and the NASDAQ Composite advanced 0.66%. US small caps Russell 2000 rose 1.97%, rising over 11.7% in December so far. Bond yields dipped slightly despite Atlanta Fed President Bostic predicting the Fed would only cut rates twice in 2024, well below market expectations for at least five cuts. Among stocks, Boeing gained 1.2% after German airline Lufthansa revealed it ordered 40 737-8 MAX jets, Meta advanced 1.6%, trading at levels not seen since Sep-21, and Amgen rose 1.1% on broker upgrades.

ASX to open higher. SPI Futures up 35 points (+0.47%).

• Base metals finished broadly higher, with the exception of Aluminium, which fell 0.92% as LME aluminium inventories continue to rise. Nickel +1.40%, Zinc +1.61%, Lead +1.07%, and Tin +1.63%.
• Gold rose 0.63% as the US greenback and treasury yields slipped.
• Copper up 1.49%, as supply concerns fuelled by mine closures and a sliding dollar triggered buying.
• Dalian iron ore up 0.10% despite dampening demand, buoyed by low inventory levels and restocking.
• 10Y bond yields – US 3.929%, Australia 4.090% and Germany 2.022%.
• USD Index fell 0.40%, and the AUD rose 0.82% to 67.6US cents.

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ASX 200 up 63 points to 7489 (0.8%) in another strong across the board rally. RBA minutes helped, BoJ staying pat helped and takeovers helped. Solid gains across the board. The Banks continue to march higher, CBA up 0.6% and WBC charging 0.8% ahead. The Big Bank Basket up to $189.23 (+0.5%)). MQG kicked and insurers firmed, QBE bouncing 3.9%, SUN up 2.2%. REITs also in demand, GMG up 2.0% and SCG better by 0.3%. Industrials grinding higher, TCL up 1.7% WES up 1.3% and ALL up 2.0%. QAN slipped slightly down 1.7% with Tech better, WTC up 1.1% and XRO rallying 1.6%. Healthcare also better, CSL up 0.6% and RMD finding buyers up 0.6%. In resources, iron ore miners hitting highs despite Singapore iron pre slipping again. BHP up 0.6% and FMG up 1.1% putting Krug on Twiggy’s table. Gold miners slightly positive, NST up 1.4% with lithium stocks mixed. LTR up 11.3% as shorts worry about Gina and Albemarle teaming up perhaps. AZS up 1.7% as SQM and Gina teamed up with a $1.7bn bid. Oil and gas stocks better on Red Sea issues, WDS up 1.7% and BPT finishing 3.2% higher. In corporate news, AKE shareholders say yes, here at least, AGL up 0.6% on plans for its 500MW battery plant. GEM surged 13.6% on a marked improvement in the second half, PFP buying 3 funeral business, and ORG up 3.2% after getting its hands on another GBP280m investment in Octopus (UK). On the economic front, RBA minutes out, considered a rate rise but as we know didn’t raise rates. Somewhat sidelined now, ANZ-Roy Morgan survey out, slight improvement, Japan kept policy on hold for the third or fourth decade. Japan up 1.1%, HK continues to slide down 0.6% with China unchanged. 10-year yields down to 4.11%.

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US equities kick off the week on a positive note, continuing its seven-week bull run. The Dow closed flat, up one point. Up 88 points at best. Down 20 points at worst. The S&P 500 gained 0.45% as more than $40bn of mergers and acquisitions hit the wire, following months of disappointing volumes. The NASDAQ Composite is up +0.61%, and the NASDAQ 100 gained 0.64% to close at a record high for a second consecutive session. Wall Street’s fear gauge the VIX up 1.3%, hovering around 12, but within striking distance of recent multi-year lows. Mounting attacks by militant groups on ships in the Red Sea pushed oil prices higher over supply concerns, which in turn boosted energy stocks. US treasuries edged higher after Fed officials pushed back against market pricing of interest rate cuts. Among stocks, US Steel Corporation jumped 26.09% on reports that Japanese Nippon Steel secured a deal to buy the company for $14.9bn in cash. Meanwhile, Apple fell 0.9% after announcing a halt in Apple watch sales in the US due to patent rights violations.

ASX to rise. SPI Futures up 6 points (+0.8%).

• Base metals mixed. Nickel -3.79%, Zinc +0.32%, Lead -1.37%, and Tin -1.78%.
• Copper down 0.94% on demand concerns from China.
• Aluminium up 1.94% after stocks in LME-approved warehouses jumped more than 13% on Friday, indicating a surplus of the metal in transport.
• Gold up 0.43% on dip buying.
• 10Y Bond Yields. US 3.945%, Australia 4.123% and Germany 2.073%.

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ASX 200 lost 16 points to 7426 (0.2%) in lacklustre trade dominated by M&A activity in LNK, ABC and PSQ. Monday M&A day ahead of Xmas break. Banks drifted lower with the Big Bank Basket unchanged at $188.20. Insurers suffered as yields fell again, QBE down 0.6% and SUN off 1.8%. Fund managers lower with REITs under pressure, GMG up 0.1% and VCX down 2.4%.  Industrials weaker, TLS off 0.9% with staples easing, WES down 0.5% and WOW down 0.7%. Tech held up on lower rates, WTC up 0.1% with the All-Tech Index up 0.2%. Resources mixed, PLS up 1.3% and AKE running 1.7% higher ahead of the vote this week, Iron ore miners mixed, Oil and gas faltered, WDS down 0.3% and STO falling 1.6%. Gold miners flat and coal mixed. In corporate news, LNK had a bid from Mitsubishi, up 27.0%, ABC saw the Barro Group bid 320c in cash, up 31.3% and PSQ also saw a NBIO rally 18.0%. ZIP fell 2.4% on a funding package. TAH up 23.1% after saying it would keep its Victorian wagering and betting business. SGP fell 3.6% after announcing a deal to buy 12 LLC communities. Nothing substantive on the economic front. Asian markets weaker, Japan down 0.9% China down 0.2% and HK off 1%%. 10-year yields fell again to 4.07%.

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US markets closed mixed after a day of high-volume trading. The Dow Jones gained 57 points (+0.15%), a record-high close for the third session in a row. Up 2.92% for the week marking a ninth straight winning week. The S&P 500 finished flat, NASDAQ +0.35% and Russell 2000 -0.77%. The S&P 500 and NASDAQ registered a seventh straight week of gains, up 2.50% and 2.85%, its longest winning streak since 2017. The session also marked the expiry of quarterly derivatives tied to stocks, index options and futures, known as “triple witching”. US treasuries finished little changed, short-dated 2Y yields did rise, up 6.1bps after fed officials dampened expectations of an imminent rate cut in Q1 next year. Quite on the corporate front, but in economics, the S&P Global PMIs highlighted a strong service sector, though manufacturing fell short of expectations.  

ASX SPI Futures down 74 points.

• Gold fell 0.81%.
• Copper prices dipped 0.44%, on a strong dollar.
• Based metals mixed. Nickel +1.24%, Aluminium +1.52%, Zinc +1.65%, Lead +0.27% and Tin -0.67%.
• US Treasuries were little changed to modestly lower following latest Fed comments. 10Y yield down 0.6bps to 3.911%, 2Y yield up 6.1bps to 4.445%.

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ASX 200 finished up 65 points at 7443(0.9%) in another strong day but well off highs as some profit taking creeping in. Big caps in focus. The iron ore miners shooting the lights out, BHP close to all-time highs up 2.4%, RIO up 2.2% and FMG giving Twiggy a very happy Xmas up 1.4%. Lithium stocks saw short covering across the board as lithium carbonate prices rally in China. PLS up 3.4% and MIN up 2.1% with IGO rallying 6.1%. Gold miners not so hot despite bullion rallying, NEM up 2.2% and EVN up 0.3%. Oil and gas stocks rebounded WDS up 1.4% and STO better by 3.2%. Coal stocks also better, WHC up 0.8% and uranium at 15-year highs giving PDN a flip higher. Up 2.1%. Banks too in demand still, CBA up 0.5% and ANZ the star up 1.2%. The Big Bank Basket up to $188.28(+0.7%). Financials doing well, even ZIP up 17.8%. MQG continues its rally up 0.5% with insurers steadying. REITs a little mixed DXC down 3.6% on a revaluation of properties. GMG slipped 1.8%. Healthcare better with CSL up 0.7%. Industrials pausing a little, TCL in demand on yields falling, up 1.9%. Tech a little flat, the All-Tech Index up 0.4%. In corporate news, AMP down 1.6% after it has provided an update on its $1.1bn capital management program, revealing a return of $750m since Aug-22. ABC has shared news on the Kwinana Upgrade Project and provided a trading update, projecting the 2023 underlying EBITDA to fall within the $310 - $315m range. Stock up 8.6%. HLS fell 0.7% on an  announcement that ACL intends to withdraw its offer. No surprise there. In economic news, NAB chair says Australia will avoid a recession. PMIs out. In Asian markets, a positive reaction to more stimulus from the PBoC, Japan up 1.2% China up 0.7% and HK up 3.0%. 10-year yields back to 4.14%.

****Quadruple Witching in the US tonight. Around US$3.1 trillion of derivatives to expire. Last major liquidity event for 2023. Will add to the volatility. US markets experiencing serious jump in volumes****

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Wall Street closed modestly higher overnight, extending weekly gains in the final hour of trade. The Dow added 158 points (+0.43%) to hit an all-time high. Up 197 points at best. Down 39 points at worst. S&P 500 and NASDAQ are both up over 3% for the week so far, advancing 0.26% and 0.19%, while the Russell 2000 is up over 7% for the week, adding another 2.72% overnight. The VIX pulled away from almost four-year lows, up 2.4%, as piles of derivative contracts tied to stock indexes are due to expire tomorrow, which may amplify instability. Benchmark 10Y yields dropped 10.7bps to 3.917%, and the greenback tumbled against a basket of world currencies, USD Index down 0.87%. Meanwhile, retail sales data unexpectedly rose last month, and initial jobless claims came in below forecasts. Though data did little to change rate cut expectations. Among stocks, Adobe fell 6.35% after giving lukewarm revenue forecasts for 2024, and Intel gained 1.37% after announcing new chips for PCs and data centres.

ASX to open higher. SPI Future up 48 points (+0.65%).

• Base metals rallied following a fall in the US greenback. Copper +2.95%, Nickel +2.76%, Aluminium +3.12%, Zinc +2.60%, Lead +1.77% and Tin +2.46%.
• Oil prices extend yesterday’s gains, boosted by a weaker dollar and the IEA lifting its oil demand forecast for next year. Brent Crude +2.95% and WTI +3.07%.
• Dalian iron ore slipped 2.70% after the market digested a lack of new stimulus measures and data that showed weaker-than-expected bank lending last month.
• 10-year yield: US 3.917%, Australia 4.100%, and Germany 2.121%.
• Gold prices touched a 10-day high overnight, up 0.65% as the USD and treasury yields fell for a second consecutive session.

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