Market Updates

US markets crumbled overnight as concerns that the US economy is heading toward a recession in 2023 took their toll. The Dow Jones fell 351 points (-1.03%). At best, it was up 60 points, and at worst, it was down 529 points. The NASDAQ took a heavy blow, down 2.00%, with selloffs in tech giants including Apple, Meta, and Amazon, and the S&P 500 fell 1.44%. The recent rally looks like it was very overdone, with markets sobering up as we see a correction. In Europe, STOXX 50 -0.4%, FTSE -0.6%, CAC -0.1%, and DAX -0.7%. SPI Futures are down 37 points (-0.51%), following a 34-point loss yesterday, as the RBA raised interest rates by 25bps.

CEOs from the biggest banks, including Goldman Sachs, Morgan Stanley, and JPMorgan, shared their concerns about the economic outlook. Goldman warned about cutting pay and jobs with “bumpy times ahead,” while Bank of America is slowing down hiring, with fewer employees leaving as a possible economic contraction lies ahead. Morgan Stanley is set to cut around 2,000 global positions, and JPMorgan says a “mild to hard recession” may hit next year. Money moved to the “safe haven” US dollar as bond yields fell. The US 10-Year Yield was down 6.9bps, while the 2-Year Yield fell 3.0bps. The USD index rose for the second straight session, up 0.27%, while the Aussie Dollar settled a little lower, down 0.12% to 66.85c.

In commodities, oil prices fell, with WTI down 3.41% to its lowest price this year after touching a higher above $123/barrel in March. Brent crude was down 4.14% below $40/barrel for the second time in 2022. Base metals were mixed with nickel, zinc, and tin, finishing higher, while copper, aluminium, and lead all closed lower. Gold rose 0.29% after a hard fall in the previous session. Coal was back on the winner’s list, up 0.90% overnight. Bitcoin steadied, up 0.24%.

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 ASX 200 slipped 34 points to 7291 (0.5%) after fighting back from early US inspired losses. RBA moved rates 25bps higher as expected and market sold off after the announcement. Bank slid finally after holding up well until the RBA decision. CBA dropped 0.5%, NAB down 0.7% and the Big Bank Basket off to $185.60 (-0.5%). ASX fell hard on latest volume numbers off 2.5%. MFG disappointed with FUM down 3.3%. Insurers were better with QBE up 0.6% and IAG up 1.3%. MPL grinding higher by 1.7%. REITS fell led by GMG down 1.1%, SCG off 1.4% and VCX down 1.5%. Healthcare was mixed, CSL barely changed, RMD fell 2.3% as US listing slid on broker comments. Industrials relatively solid, TLS grinding higher again up 0.5%, BXB up 0.8% and WOW up 0.3%. Tech fell hard, WTC down 2.4% and XRO off 4.0%. Resources under pressure. BHP and RIO easing slightly but FMG off 1.6% and gold miners slammed NST down 2.0% and NCM off 2.3%. Lithium feeling depressed today AKE down 0.8%, LTR off 3.2% and AGY off 4.6%. Oil and gas stocks down with STO off 1.2% and KAR off 3.3%. In corporate news, SPT did a deal with Google. BGL raising $60m in a placement at 105c. On the economic front, it was the RBA and consumer confidence, 25bps as expected but Lowe has raised his terminal rate forecast. This is the rate at which the economy becomes terminal. In Asia, HK down 0.8% and China kicking another 0.6%. Tokyo better by 0.4%. 10-year yields up to 3.39%.



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US markets fell overnight on the back of strong economic data, which supports the case for the Fed to continue to raise interest rates. The Dow Jones was down 438 points (-1.40%). At best it was down 94 points, and at worst it was down 583 points. The NASDAQ fell 1.92%, and the S&P 500 finished xx% lower, with 95% of companies trading lower. In Europe, STOXX 50 -0.5%, FTSE +0.2%, CAC -0.7%, DAX -0.6%. SPI Futures are down 47 points (-0.64%) this morning, following a 24-point rally yesterday.

HEADLINES

• Wall St sinks as strong services data causes jitters over Fed direction
• Stocks Hit by Fed-Hike Worries as Bond Yields Jump
• U.S. services industry regains steam; factory orders accelerate
• Russia unleashes missiles across Ukraine, drones hit bases deep inside Russian territory
• FX swap debt an $80 trillion 'blind spot' global regulator says
• Vodafone CEO to leave after frustrating four years for shareholders
• U.S. Supreme Court leans toward web designer with anti-gay marriage stance
• Oil falls over 3% after data raises Fed interest rate worries
• Gold pulls back as dollar rebounds on strong U.S. data
• Lithium price to retreat from record as electric car sales slow
• China demand hopes fuel copper's rise to three-week peak

ON THE CALENDAR

• Domestic data: RBA interest rate decision & current account for Q3.
• Japan data: Household spending for October.
• UK: Retail sales for November.
• US: Balance of trade for October & Redbook data for December. 

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ASX 200 rallies 24 points to 7326 (0.3%) as iron ore bounces to $110 in Singapore. FMG leading the charge higher up 6.9%, BHP up 2.3% and second-liners CIA doing well up 2.2%. Lithium stocks a little on the nose with PLS down 5.1%, IGO off 4.9% and LTR falling 2.4%. Base metal stocks slightly firmer, S32 up 3.6%. Energy stocks firmed post-OPEC plus, WDS up 2.0% and STO up 2.7%, coal stocks a little weaker. Banks going nowhere in a hurry, the Big Bank Basket $186.49 (unchanged). Industrials firmed in quiet trade, TLS up 0.3%, WOW up 0.6% and ‘old skool’ platform stocks REA up 0.7% though CAR and SEK slipped slightly. REITs firm, GMG up 1.7% and healthcare slipping back slightly, CSL down 0.6% and RMD off %. Tech stocks eased back, WTC off 0.7% and CPU down 0.2%. The index falling 0.2%. In corporate news, WGO got another bid up 11.5%, with Gina and Kerry fighting it out. NEA takeover now approved by the court. MTS up 0.2% on higher earnings and a 9.5% increase in dividend. Nothing significant on the economic front ahead of the RBA tomorrow. Asian markets firm, HK up 3.5% and China kicking another 1.7%. Tokyo unchanged.10-year yields slip to 3.37%. Dow futures down 32 points. Nasdaq futures down 22 points.

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• US stocks and bonds experienced a volatile session on Friday following a jobs number that fuelled bets the Fed will continue tightening after a lot of talk of a slowdown of rate hikes this month. The Dow Jones fell hard at the open but managed to recover its losses and finish up 34 points (+0.10%).  The NASDAQ finished 0.17% lower and the S&P 500 lost 0.12%. European markets were mostly lower, with STOXX 600 down 0.15%, UK FTSE down 0.03%, France down 0.17%, Italy down 0.26%, and Greece down 2.00%, German DAX finished 0.27% higher. SPI Futures are up 19 points (+0.26%), following a 0.6% rise in the ASX 200 for the week.
• US employers added more jobs than expected and wages increased by the most in nearly 12 months. Nonfarm payrolls were 263K higher in November, ahead of market forecasts of 200K, with the unemployment rate steady at 3.7%.
• US bond yields spiked on the jobs number but gave up their gains and were relatively unchanged for the session, the US 10-Year fell 4.1bps, while the 2-Year rose 2.2bps. The USD index jumped close to 1% on the release but finished down 0.17%. The Aussie Dollar was unchanged against the USD, fetching 68.03c.
• In commodities, easing restrictions in China has provided a boost for metals, with all finishing higher. Copper rose 1.56% to its highest level since mid-November, while nickel added 4.58% and aluminium climbed 2.68%. Gold finished 0.32% lower after a good run against the USD. Oil prices slumped on the EU agreeing to a $60 Russian oil price cap, and reports that the US oil-production rebound is set to slow. Brent crude was down 1.28% and WTI fell 1.48%. Coal prices rose again, adding 1.59%, for the week, it gained 14.23%.
• OPEC Plus announced no changes.
• China relaxing more CV19 restrictions over the weekend.

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 ASX 200 dropped 53 points to close at 7302 (0.7%). Up 55 points for the week.  Some caution creeping in before the US jobs data tonight and it has run hard. The BIg Bank Basket fell to $186.74 (1.1%). MQG slid 1.0% and insurers also in the doghouse as bond yields continue to fall. 10-year yields now back to 3.39%. QBE down 0.2%, MPL off 1.7% and money managers down too, GQG off 3.0% with MFG falling another 1.9%. Industrials relatively firm, TLS up 0.5%, REA up 0.7% and CPU up 0.1% with healthcare also doing ok as RMD rose 1.6% and CSL up 1.1%. REITs stumbled lower despite rates easing, GMG down 4.1%, GPT off 2.2% and SCG falling 2.7%. Tech better with the All-Tech Index up 0.6% as WTC rallied 0.5% and BTH got an 80c bid. In resources, iron ore stocks eased, BHP down 1.4% energy down too WDS copping some broker negativity falling 2.6% and coal stocks not such a merry old place to be. Gold miners though enjoying a day in the sun, SBM up 10.4%, NCM up 2.1% and GOR flying another 2.2%. Base metals too in the green, IGO up %, PLS up % and CHN up 3.7% in speculation Twiggy is interested. In corporate news, WGO got another revised bid from BPT at 25c. STO had a court case go against them on Barossa gas project falling %, PMV posted record Black Friday sales higher by %. CRN warned on wet weather impacts, DMP completes its placement of $150m to buy out its German partner. In economic news, the total new loan commitments for housing fell 2.7% in October. Japan down 1.8%, China off 0.6% and HK down 0.8%. 10-year yields at 3.39%.

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US markets faltered following as manufacturing data showed a contraction in November for the first time since May 2020. The Dow Jones closed down 195 points (-0.56%) after falling as much as 460 points in early trade. The NASDAQ managed to continue yesterday’s run and gained 0.14%, while the S&P 500 was largely unchanged for the session, down just four points. In Europe, STOXX 50 +0.5%, FTSE -0.2%, CAC +0.2%, DAX +0.7%. SPI Futures are down 15 points (-0.20%) following a 70-point rise yesterday.

• Wall Street ends mixed; Salesforce selloff pressures Dow
• Biden, Macron condemn Russia invasion of Ukraine at White House meeting
• U.S. Supreme Court to hear Biden's bid to reinstate student debt plan
• U.S. Congress backs legislation to block rail strike
• Global factory activity shrank in November but price pressures ease
• EU tentatively agrees $60 price cap on Russian seaborne oil
• U.S., France present united front to hold Russia to account on Ukraine
• Chicago Fed hires Austan Goolsbee as new chief after Evans
• HSBC shedding at least 200 senior operations managers in global cuts
• China set to loosen COVID curbs after week of historic protests
• Oil prices could fall without further OPEC+ cut, analysts say

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ASX 200 jumped out of the blocks today finishing up 70 points at 7354 (1.0%). The Powell Punt now live.  Resources led the charge selectively, BHP up 2.11% with RIO up 3.3% on Chinese reopening hopes. Gold miners did well as the USD fell away, NCM up 4.3% and NST up 3.0%. Base metals stocks better CHN up 5.7% and IGO up 4.0% with PLS better by 2.2%. Patches of weakness with oil and gas mixed, WDS falling 1.7% on its impending investor day, STO up 0.4% on better crude prices and KAR up 2.6%. In the industrials, green across the screen with interest rate sensitive stocks better, REITs up with GMG up 0.4% and SCG better by 1.4%. ‘Old Skool’ Platform stocks doing well, REA up 2.4% and SEK rallying 2.6%. Staples ok but unspectacular. Healthcare eased with CSL down 0.5% though FPH kicked another 2.7% higher on broker optimism. In the banks, the Big Bank Basket showed a modest gain, at $188.97 (+0.6%). MQG did well up 1.9% and Insurers mixed with MPL 1.7% better as the last data hits the dark web. In corporate news, DMP tapped the market for a thin and crispy cap raise to buy the German partners out. RF1 is raising $79m to increase the fund at NTA, COH down 0.5% and has drawn the attention of the ACCC. AGY issued an update to its Rincon operations, up 6.4%. On the economic front, private new capital expenditure unexpectedly fell 0.6% quarter-on-quarter. Meanwhile, in Asia, Japan followed the US higher by 1%, China up 1.3% and HK up 1.6% 10-year bond yields fell to 3.49%. Dow futures up 22 points. Nasdaq futures up 29 points.

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The ASX 200 finished up 31 points (+0.4%) on a better-than-expected monthly CPI indicator number for October. The figure came in at 6.9%, ahead of consensus of 7.4%, and slowing from the 7.3% CPI read in September. Resources were strong, BHP was up 1.6% and RIO rose 1.7%. Lithium stocks also found some strength, with MIN up 4.4%, PLS up 3.8%, and AKE up 3.4%. Energy was the clear winner, with coal stocks attracting attention on a rising coal price and increasing uncertainty surrounding the oil price cap situation with OPEC+. WDS  up 1.3% and STO up 1.0%, with YAL up 3.3%, WHC up 8.4%. Banks came under some pressure following the CPI indicator release, with the Big Bank Basket down to $187.91 (-0.3%). CBA down 0.2%, NAB down 0.5%, and ANZ down 0.7%. Other financials were better, MQG up 0.4%. Technology stocks were better, the All-Tech Index was up 1.0%, with CAR up 3.4%. REITs also better following the CPI update, GMG was up 2.3%. In corporate news, TPW rose 14.1% on a 55% increase in revenue compared to pre-COVID levels. MYX fell hard, down 16.4%, following an outlook update at its AGM. TLG recovered from some weakness to finish unchanged after it said it expects to finalise negotiations and provide definitive documentation on Automotive Cells Company shortly. Jerome Powell speaks in the US tonight, looking out for some confirmation of slowing rate rises in December. European inflation data for November also out tonight. Dow Futures are up 50 points and NASDAQ Futures are up 18 points.

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• The S&P 500 and Nasdaq Composite closed lower for a third straight session Tuesday as traders struggled to recover from sharp losses suffered in the previous session and looked ahead to more economic tea leaves coming later in the week.
• The Nasdaq Composite shed 0.59% to close at 10,983.78. The S&P 500 lost 0.16%, ending the day at 3,957.63. The Dow Jones Industrial Average notched a marginal gain, closing 3.07 points, or 0.01%, higher at 33,852.53.
•  Data out of Germany, Spain and Brazil signaled that inflation in the country could be cooling, as desired by officials, Reuters reported.   German consumer prices in comparison to other European Union countries rose 11.3% in November, cooling slightly.
• RBA’s Jonathan Kearns, head of domestic markets, speaks at the 2022 Australian Securitisation Conference in Sydney at 11am; 
• Third quarter construction work done, building approvals October, private sector credit October and CPI indicator October all at 11.30am. Australian CPI today expected to be 7.8% up from 7.3%

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