Market Updates

US equities closed were mixed overnight in a dull day of trade coming off a sharp rally on Friday. The USD strengthened, treasury yields rose, and gold edged higher. Concerns about the debt ceiling are intensifying, while optimism rises that the worst stresses in US regional banking have passed. European markets ended higher broadly, supported by healthcare and bank stocks. Focus is now on US CPI data for April due out Wednesday for hints on whether rate cuts are coming soon. Dow Jones down 56 points (-0.17%). Dow at best up 73 and at worst down 165 in a flat day of trade. S&P 500 up 0.05%. NASDAQ up 0.18%. VIX Volatility Index down 0.1.2%. European markets are mostly up. Stoxx 50 +0.2%, FTSE +1%, CAC +0.1%, and DAX off 0.05%. SPI Futures are down 8 points (-0.11%).

• ASX to dip; US waits on Fed amid recession fears.
• Wall Street ends near flat ahead of inflation data.
• Shares rise, dollar flat ahead of key U.S. inflation data.
• US dollar edges up as market looks to inflation data.
• PacWest shares pare gains after dividend cut fails to stem market fears.
• Banks tighten credit terms, see loan demand drop, Fed survey shows.
• KKR posts 26% drop in Q1 earnings, beating expectations.
• Crypto stocks drop after Binance halts bitcoin withdrawals for hours.
• European shares end higher, lifted by healthcare and bank stocks.
• Yellen is calling CEOs personally to warn on US debt ceiling.
• Yields rise on banking optimism, before supply.
• Oil climbs over 2% as recession fears begin to fade.
• Gold regains ground with focus on US inflation data.
• Ukraine farms lose workers to war, complicating a tough harvest.

Catch up on all the latest with Henry Jennings on today’s Pre-Market Podcast.

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ASX 200closed up 57 to 7277 (+0.8%) in a broad market rally. Energy sector soaring today +2.5% following news the government’s PRRT hike is not as bad as feared. WDS +2.9%, BPT +2.8%, and COE +6.7%. Lithium stocks were stronger today following Morgan Stanley’s comments that lithium markets have hit a turning point, MIN +1.4%, PLS +4.6%, and CXO +6.7%. Gold miners found some support down 0.7%. Staples also stumbled down 0.9%, EDV off 0.3%, and WOW slipping 1.1%. Banks recover some of last week’s losses, NAB leading the way up 2%, WBC +1.8%, CBA +1%, ANZ +0.1%, while MQG fell 2.2%. The Big Bank Basket rose 1.1% to $169.79. Tech steady, All Tech Index up 0.6%, WTC +0.2%, CPU +1.1%, and XRO +1.1%. REITS better up 0.4%. Resource stocks the place to be, BHP +1.5%, RIO +2.4%, and FMG +1.9%. Healthcare and Insurance mixed, RMD -0.9%, RHC+1.2%and MPL off 0.3%. In corporate news, WBC recorded 1H23 profit of $4bn, up 22%, CEO Peter Kings says the bank is ready for a downturn as its March NIM has plateaued and would fall in the coming half. LYC +12% Malaysian operating license extended until 2024. WOR +3.6% awarded engineering and design contract by Shell for Sparta. In economic news, NAB business confidence rose 1 point to 0 in April, the highest reading since January, and Australian building permits fell 0.1% MoM, reversing from 4% growth in February. March BoJ meeting minutes indicated thoughts that market distortions remained but did not worsen. Asian markets mixed, Japan down 0.2% and HK up 0.7% with China up 1.7%. Australia’s 10Y yield rose 7bps to 3.39%. Bitcoin down 1.28%. Dow Jones futures down 16 points and Nasdaq futures down 2 points.

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Dow Jones +547 points (+1.65%) on Friday. It was up 621 at best. NASDAQ +2.25%. S&P 500 +1.85%. KBW Bank index +4.60%. Down 11% for the week. The regional banking bomb defused itself overnight. The KBW Regional Bank index +4.69%. 15 stocks in the index were up more than 6%. Pacwest was up 81.7%. Western Alliance up 49%. Zions up 19%. Comerica up 17%. At the bigger end of town US Bancorp up was 6.1%, Citigroup up 3.2%, Wells Fargo up 3.3%, Bank of America up 2.7%, Morgan Stanley up 2.7%, JP Morgan up 2.0%. The VIX Volatility index dropped 14% to 17.19. SPI Futures up 64.

HEADLINES

• ASX to rise; Westpac post $4bn net profit.
• $2.4bn gas tax rise must be the last, APPEA says.
• Warren Buffett faults handling of bank failures, upbeat on U.S., Berkshire.
• Yellen warns of 'constitutional crisis' if Congress fails to act on debt.
• Domestic data: NAB Business Confidence, Building Permits MoM.
• Japan data:  BoJ Monetary Policy, Jibun Bank Services PMI.

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ASX 200 finishes the week up 27 points to 7220 (+0.4%), rebounding from early lows again as bargain hunters stepped in. ASX 200 down 1.2% for the week. Banks did a double take after the ANZ and MQG results. ANZ kicked 1.5% higher on record profits and talked increased competition as anticipated. MQG slipped slightly on its numbers. The commodities division once again the superstars. The Big Bank Basket rose to $167.86 (+0.4%). Insurers up with SUN better by 1.1% and QBE up 0.7%. Fund managers mixed. Industrials firm still; they have been the haven this week, REITs continue higher as bond yields fall, GMG up 3.0% and SGP up 2.3%. Tech weaker despite yields falling, ALL down 1.7% and TPG falling 1.3%. Resources mixed, lithium in demand with PLS up 4.02% and IGO up 3.2% even MIN chipped in with a 2.6% rise. Iron ore stocks still struggling, gold miners better on near record bullion prices. NCM up 2.2% and EVN up 2.3%. CHN did well up 2.8% and LTR up 3.6% giving Tim a nice weekend. In corporate news, ANZ and MQG the focal point. On the economic front, we had lending numbers and the SoMP. No real surprises. But no real hope for rates either. Asian markets muted Japan closed and China down 0.6% with HK up 0.6%. Dow futures up 58 points. NASDAQ futures up 50 points.

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US equities closed lower overnight in Thursday trading. Regional banks under immense pressure closing sharply lower amid renewed crisis fears. Heavyweight US bank stocks fall on regional bank woes, Goldman -4.25%, Bank of America -3.12%, and JPMorgan -1.69%. Global equities down broadly after the ECB raised interest rates by 25bps and signalled more tightening would be needed to reign in inflation. US treasuries lower while Brent crude oil prices stabilise after three consecutive days of sharp declines over demand concerns. Apple fell 1% leading up to the release of its quarterly results before rising ~2% in after-hours trade after its forecasts. Dow Jones down 287 points (-0.86%). Dow at worst down 477. S&P 500 down 0.72%. NASDAQ down 0.49%. VIX Volatility Index up 0.24%. European markets down.  Stoxx 50 -0.5%, FTSE -1.1%, CAC -0.9%, and DAX -0.5%. SPI Futures are down 29 points (-0.40%).

Shares of PacWest Bancorp plummeted by more than 40% dropping to a record low after confirming reports that it was exploring strategic options, including a potential sale or capital raising. Western Alliance also saw its stock drop 60%, after a report claiming it was exploring strategic options including a potential sale, the claims were denied by the bank, shares down 38%. First Horizon and Toronto-Dominion Bank Group terminated their $13.4bn merger due to uncertainty over regulatory approvals. The news caused First Horizon shares to drop by 32%. S&P 500 Banks index fell nearly 3% and the KBW Regional Banking Index dropped 3.3%.

• Wall Street ends down as PacWest fuels fears of deeper bank crisis.
• Stocks fall, dollar rises as investors eye weakening economy.
• Yields close lower as bank woes prompt economic worries.
• Apple iPhone sales rise, pushing results above estimates.
• Paramount Global disappoints on weak ad market, cuts dividend.
• PacWest stock plunges as US regional banking woes worsen.
• Lyft's weak forecast overshadows strong first quarter, shares slump.
• Pressure grows for regulatory intervention as US bank rout deepens.
• US jobs market softening; slumping productivity boosts labor costs.
• ECB slows rate hike pace but signals more to come.
• Buffett set for 59th shareholder marathon as big questions loom.
• Gold flirts with all-time highs as banking concerns deepen.
• Copper drifts higher on possible Fed pause, firm dollar weighs.
• Iron ore hits five-month low on weak China factory activity data, demand worries.
• Oil settles narrowly mixed after smaller ECB hike; demand concerns linger.

Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.

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ASX 200 closed down 4 points to 7193 (-0.1%) after hitting its lowest levels in nearly five weeks amid a sharp selloff in big heavyweight banks. NAB -6.4% was hammered today despite ROE surging to 13.7%, the highest level since 2019, as its net interest margin fell short of expectations falling to 1.77% down from 1.79% in the December quarter. CBA -2.6%, ANZ -2.4%, WBC -4.1%, MQG -0.8%, Big Bank Basket tumbles 3.4% to $167.19. REITS best-performing sector today recovering yesterday’s losses up 2.0%, GMG +1.8%, SCG +2.5%, and SGP +2.3%. Mining and base metals in positive territory today BHP up 1.6%, RIO up 1.3%, and FMG rose 1.5%. Safe haven Gold rallies, NST +2.5%, AGG +2.2%, and EVN +7.2%. Interest rate-sensitive tech sector strong, SQ2 +3.4%, XRO +1.8%, and WTC +1.2%. Defensive sectors Healthcare and Staples underwhelmed failing to find support, WOW down 0.2%, EDV off 0.6%, RHC down 2.2%, and RMD slipped 0.2%. Lithium was a little mixed PLS up 2.2% and MIN off 4.6%. Industrials and insurers mixed, MPL up 1.7% while SUN fell 0.3%. In corporate news, WBC, ANZ, and MQG passed on Tuesday’s RBA rate hike to borrowers, MFG +3.4% reported net outflows of $2.4bn, and HLS +0.3% rejected takeover bid from ACL. In economic news, Australia posted its largest trade surplus since last June, the trade surplus rose to $15.2bn in March up from $14.1bn in the previous month, significantly higher than expectations of a $12.6bn gain. China’s PMI unexpectedly fell to 49.5 in April from 50 in March missing consensus of 50.3, marking the first contraction in factory activity since January. Asian markets rose broadly, Japan closed, HK up 0.8% with China up 0.6%. Australia 10Y yield down 3.31%. Bitcoin down 0.17%. Dow Jones futures up 53 points and Nasdaq futures up 57 points.
 
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US equities closed mostly lower and near their worst levels after Fed Chair Powell's post-FOMC remarks. The Fed raised rates by 25 basis points to 5-5.25%, in line with the March expectations. The FOMC statement scrapped previous guidance that the Fed expects additional policy firming needed to attain a sufficiently restrictive stance. Meanwhile, ADP's April private payrolls report showed 296K in job gains, well ahead of consensus, and the highest level since July 2022. USD Index fell notably against the yen, US treasuries edged lower, and European markets climbed after their biggest fall in a month.  Dow Jones down 270 points (-0.8%) closing near session lows. Dow at best up 127. S&P 500 down 0.70%. NASDAQ down 0.46%. VIX Volatility Index up 3.1%. European markets recovered some of yesterday’s losses, FTSE +0.20%, Germany +0.56%, France +0.28%. SPI Futures are down 35 points (-0.49%).

The Fed raised interest rates by 25bps to a range of 5%-5.25%, as expected, in its May meeting. This marks the 10th increase and brings borrowing costs to their highest level since September 2007. However, the Fed has taken out language from its policy statement saying it anticipates further rate increases would be needed and noted it would consider factors such as overall tightening cycles, policy lags, and other economic and financial developments in determining whether more policy firming is necessary. The Fed also expressed concerns about tighter credit conditions for households and businesses, which could weigh on economic activity, hiring, and inflation. Fed Chair, Jerome Powell, acknowledged that policy is tight, suggesting the Fed may have done enough with rates.

• ASX to fall; US stocks finish at session lows.
• Equities choppy while Treasury yields, dollar retreat in choppy trading after Fed hikes rates.
•  Fed raises rates, opens door to pause in tightening cycle. 
• US yields tumble as Fed flags rate hike pause.
• FTC proposes ban on Meta profiting from minors' data.
• Apple results could mark weak finish to Big Tech earnings.
• Lilly drug slows Alzheimer's by 35%, bolstering treatment approach.
• US FDA approves first RSV vaccine from GSK.
• Qualcomm gives grim outlook as smartphone sales stay weak.
• US services sector still growing; inflation remains sticky.
• Gold firms after Fed signals pause to rate hikes.
• Aluminium, copper prices fall with global outlook concerns.

Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.

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ASX 200 closed down 70 to 7197 (-1%) in another dismal day of trading as the US spooks markets. Only Gold gaining today as bullion hits $AU3,033, NST up 2.3% and NCM up 1.8% and EVN up 3.7%. Energy sector the worst hit today as oil prices get whacked on demand speculation, with WDS down 2.3%, STO down 2.5%, and BPT off 3.5%. Coal eased with WHC down 0.4%, and NHC down 0.6%. REITs dropping off with interest rates to cause more pain, GMG is down 1%, and MGR unchanged. The Big Bank basket down 1.8% to $173.03 with banks being shaken globally on US instability. CBA down 1.8%, and NAB down 1.9%. Short sellers continuing to attack in the US and likely more blood to be spilled. Resources not fairing too well as global recession fears continue to hamper markets, BHP down 0.8% and RIOdown 2.1%. Lithium mixed with PLS up 2.4% and MIN down 1.4%. Tech continuing its downward trend. The All-Tech index down 0.4%, and SQ2 down 2.9%. In corporate news, Macquarie Equities Conference continued with AMC reporting a downgrade in earnings outlook for FY23, sending the price down 9.5%. OML also cited a softening in demand and tougher market conditions, sending the price down 23.9%. FLT had some good news with growth in the travel sector and providing EBITDA guidance. In economic news, Australian retail sales have risen for the third month in a row, growing 0.4% MoM. The RBA chief gave a speech saying if productivity didn’t increase, it will be harder for the RBA to get inflation back to its 2 to 3% target band. Asian markets mixed, Japan down 0.1% and HK down 1.8% with China up 1.1%. 10-year rate down 4bps to 3.41%. Dow Jones futures down 70 points and Nasdaq futures up 3 point.

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Global markets were universally down overnight on concerns of the Fed hiking rates and continued banking fears. The KBW regional banking index saw its largest percentage drop since March 13th, down 4.47% as fears over another collapse in the US banking sector rose. Dow Jones was down 367 points (-1.08%) at best the Dow was down 34 at worst, and down 615. S&P 500 down 1.16%. NASDAQ down 1.08%. VIX Volatility Index up 10.6%. European markets also dipping lower on contagion fears, FTSE -1.24%, Germany -1.23%, France -1.45%. SPI Futures are down 41 points (-0.56%). Macquarie Equities Conference continues.

Tune in to Henry Jennings’ Pre-Market Podcast to get in the know for the day ahead. 

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ASX 200closed down 67 to 7267 (-0.9%) following a violent fall after the RBA surprised the market with another 25bps rate hike. All sectors are in negative territory today. Energy sector lost all of yesterday’s gains, down 1.5%, with WDS down 1.6%, STO down 1.1%, and BPT off 2.7%. Coal cooled with WHC down 2.3%, CRN down 1.2%, NHC down 2.0%, and YAL fell 0.5%. Gold is broadly down with the market, EVN down 0.9%, and NST down 1.4%. REITs worst performing sector today, falling 2.2%. GMG is down 1.4%, and MGR slipping 4.2%.Retailers weren’t popular either, with WES down 1.3%, DMP down 0.9%, and JBH down 1.3%. Banks down along with everything else. The Big Bank basket down 0.3% to $176.16. CBA down 0.3%, and NAB down 0.3%, should see a boost tomorrow after the market has digested rate news. Tech getting whack also. The All-Tech index down 0.6%, and SQ2 down 1.5%. In corporate news, Macquarie Equities Conference kicked off with many companies presenting. WOW down 0.8% decreased despite reporting an 8% increase in sales in its third-quarter trading update, QAN slipped 3.0%, following the announcement that Vanessa Hudson will succeed Alan Joyce as CEO, HLS +1.7% sold its Montserrat facilities to Nexus Hospitals for $127m, and EDV -3.6% after reporting a 3.7% rise in sales in Q3 trading update. In economic news, RBA hiked rates by 25bps today taking the market by surprise triggering a market-wide sell-off, no sector safe. Asian markets mixed, Japan down 0.1% and HK up 0.3% with China closed. Bond yields soar, 2-year bond yield rose 23bps to 3.27%, and the 10-year rate up 11bps to 3.46%. Bitcoin down 1.54%. Dow Jones futures down 10 points and Nasdaq futures up 1 point.
 
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