Market Updates

• Dow Jones up 402 in high volume (+1.26%). Down 62 at worst and up 610 at best. S&P 500 +1.34%. NASDAQ +1.28%. The US markets had a pretty shabby week last week with the Dow Jones down 1.4%, the NASDAQ down 5.6% and the S&P 500 down 4.6%. STOXX 600 index up 1.81% overnight with the UK market up 2% and Germany up 2.5%, France up 2.8%. The Chinese market was up 5.3% last week. The Hang Seng (Hong Kong) was up 5.3% on Friday.
• SPI Futures up 91 this morning. That follows a 35 point rise in our market on Friday. The ASX 200 was up 116 points (1.66%) last week. It was led higher by the resources sector (+3.53%) and the energy sector (+4.96%). Gold the loser of the week down 2.05% although the gold price is up a big $50 overnight (+3.12%) so the gold sector looking good for a bounce.
• Over the weekend the Chinese have denied any changes to CV19 policy so we are unlikely to see such a good response from our market today.
• WBC results out this morning $5.28bn cash profit and 64c fully franked dividend. More cautious than ANZ. The bank said it had not yet seen increases in hardship or stressed assets, with 68%  of its customers still ahead on their mortgage repayments. 
• MPL update on cyber crime. Operations have been maintained.

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ASX 200 up 35 points to 6893. Up 1.5% for the week. Australia outperformed the US markets this week, helped by a 113-point rise on Tuesday as the RBA went soft yet again with a 25bp rate rise. The RBA upgraded inflation and downgraded GDP forecasts in their Statement on Monetary Policy today. GDP forecast to fall below 2.00% from mid-2023. Bond yields fell in Australia on the back of that. The RBA see inflation above their 2-3% target through 2024. A range of 65 points for the day as the market awaits US Jobs numbers tonight. Closed pretty much on its highs led by Resources which were chasing a 5% rally in the Dalian iron ore price.

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Dow Jones down 147 points (-0.46%). Not a bad performance considering at one point it was down 421 points. It was up 38 points at best. NASDAQ down 1.73% (ouch) with the S&P 500 down 1.04%. The STOXX 600 index was down 0.93%, Germany down 0.95%. US bond yields rose yet again, quite savagely unfortunately. US 10 year bond yield up 8bp and the two-year up 14bp. The US dollar also (irritatingly) jumped a massive (massive!) 1.42% overnight taking the Aussie dollar down to 62.92c.

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ASX 200 fell 129 points to 6858. Off lows but caution remains. Losses across the board with the Big Bank Basket down to $186.24 (-1.6%). MQG down 1.4% with insurers holding up as 10-year yields rose to 3.91%. MPL up slightly.  Fund mangers in focus as PPT rose 7.1% on a potential bid, PDL dropped 10.7% as its party could be spoilt and MFG just lost 5.7%. Healthcare down as CSL fell 1.6% dragging SHL lower and COH falling 3.5%. Industrials weaker, staples in focus on WOW numbers, COL fell1.0 %, WES down 3.8% and EDV off 1.4% with WOW falling 3.5% on quarterly results. TLSDA gained as a defensive up 1.3% but REITs sliding on rate woes. GMG down 0.8% with LLC down 8.7% on a strategy update. Tech on the nose again, the Index down 1.5%, XRO off 2.0% and SQ2 off 5.7% as US slumped. Resources fell with BHP down 3.2%, FMG off 2.9% and RIO down 2.2%. Lithium was a little depressed, PLS down 1.4% and MIN off 3.1%. Gold miners fell despite no change in bullion, NST off 3.4% and NCM down 3.0%. Energy stocks mixed, WDS fell 1.4% yet NHC rose 5.9% on new buy back.

In corporate news, BVS was guillotined by a business update from the new CEO falling a massive 52.1%, A2B fell 7.4% on guidance reaffirmed, PPT up 7.1% on a bid at 3000c cash from Regal and its partner. A2M rose 4.2% on USA tick and JAN rose 17.0% on a trading update. In economic news, strong exports helped the trade surplus to $12.4bn. In Asia, Japan closed for a holiday. HK fell hard as it raised rates, falling nearly 3% and China down around 1.2%.

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The Fed offered little relief for investors overnight. Despite lifting rates by 75bps as expected, Jerome Powell's hawkish comments following the decision spooked the Dow Jones into a 505-point loss (-1.55%) finishing just off lows. At best it was up 419 points following the rate rise, then dropped over 930 points on Powell's comments. The S&P 500 fell 96 points (-2.5%), and the Nasdaq took the biggest hit, falling 366 points (-3.4%). In Europe, Stoxx 50 -0.8%, FTSE -0.6%, CAC -0.8%, and DAX -0.6%. SPI Futures are down 113 points (-1.62%). 

• Fed delivers big rate hike, signals possible smaller increases ahead
• Stocks end down, yields up as Powell sticks to hawkish stance
• Powell sees higher peak for rates, path to slow tempo of hikes
• Wall Street sees ‘devil’s bargain’ in Powell’s rate comments
• Ukraine grain export deal back on track as Russia resumes participation
• North Korea fires 23 missiles, one landing off South Korean coast for first time
• Amazon sees record interest from retail investors after earnings
• Oil jumps to three-week high as tight fuel supplies spark worry

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 ASX 200 rose 10 points to 6987 (0.1%). A cautious day today ahead of Fed meeting outcome. 75bps the forecast, Q&A will be the focal point. A mixed sessions as banks eased, the Big Bank Basket up to $189.19 (0.1%). MQG slipped 1.8% with insurers solid as MPL rose 1.0%. Healthcare slipped a little with CSL down 0.2% after announcing a new deal down. Industrials weaker, WOW down 0.8%, EDV down 1.3% and COL sliding 0.8%. TLSDA also slightly weaker with no real interest. Tech stocks fell, XRO down 3.4%, WTC off 2.5% and the All-Tech Index down 0.8%. Resources were mixed as lithium stocks took a break PLS down 4.0%, MIN off 1.7% and AKE falling 3.9%. Base metals and iron ore better, BHP up 2.1% with FMG up 1.5% and RIO rising 2.4%. Gold miners were slightly firmer as bullion rose slightly. NCM up 1.6% and NST rising 1.2%. Energy stocks doing well on crude rises and coal stocks back in favour. WDS hitting highs up 1.2% and STO up 0.8% with WHC back in the green up 4.2%. In corporate news, AMC fell 4.3% on reaffirming guidance, LKE rose 5.2% on a Kachi update, CSL will work with Arcturus Therapeutics on a new mRNA flu vaccine. DMP had its AGM and again inflationary pressures hurting down 5.3%. On the economic front, building approvals and housing finance showing the extent of the price and activity falls. In Asia, a mixed session, Japan down a little but China up a touch and HK doing well.

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• The Dow Jones fell 80 points (-0.2%) overnight as the market prepares for the Fed Decision tonight. The Nasdaq had the biggest losses, down 97 points (-0.9%), and the S&P 500 fell 16 points (-0.4%). The losses followed some stronger-than-expected economic data, with job openings and construction rising, although the S&P Global manufacturing index fell. Mega-cap tech stocks weighed on the Nasdaq again, with Amazon falling 5.5%. In Europe, Stoxx 50 rose 0.9%, FTSE was up 1.3%, CAC was up 1%, and DAX climbed 0.6%. SPI Futures are up five points this morning.
• US treasuries were mixed, 10-year yields fell by 3bps to 4.05%, but 2-year yields rose by 4bps to 4.55%. Not a lot of action in the FX market overnight, though most currencies were weaker against the US Dollar. The USD Index fell 0.04%. The probability of a 75bps rise at tonight’s meeting is now 85.5%.
• The iron ore price has fallen over 16% in the last month on Chinese concerns. But news headlines out this morning suggest that we could see some relief from China soon, as speculation of an exit from COVID zero has begun to circulate.  
• In commodities, Brent Crude and WTI oil prices rose 2.0% each. Gold was barely changed. There were some big moves in base metals, with nickel up over 6%, while zinc dropped 2.1%. The iron ore price rose overnight, against the recent downtrend.

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 ASX 200 soared 113 points to 6977 (1.7%) as buyers emerged pre the RBA meeting and kicked a little higher after the central bank raised rates 25bps as widely anticipated. Banks led the charge higher with the Big Bank Basket up to $189.05 (1.2%). MQG pushed another 1.5% higher with insurers also in demand on higher rates. IAG up 1.6% and QBE rallying 2.3%. MPL rallied 1.4% too as the hack fallout subsides. Even MFG rallied 2.1%. Healthcare in demand, CSL up 1.0%, RMD finding buyers up 2.1% and FPH up 2.4%. Industrials were firm but a little uninspiring, WES rose 1.4%, WOW up 1.4% and ALL up 1.8%. Old skool platforms stocks mixed, CAR up 2.2% and REA down 0.4%. Tech was slightly better by 1.5%. WTC up 1.8%, NXT bounced back 5.4%, CPU up 0.9%. Resources were in demand, BHP up 2.8% despite iron ores recent falls. RIO up 2.6% and FMG also showing a clean pair of heels up 5.4%. Lithium stocks remain in favour, PLS up 4.3%, CXO up 4.0% and MIN rising 0.8%. S32 bouncing well and NIC doing well up 7.4%. Gold miners slightly positive and oil and gas better, WDS up 2.3% and STO rising 2.0%. Coal stocks though in a hole, YAL down 3.1%, TER off 6.8% and WHC up 1.3%.

In corporate news, AGY fell 2.9% on an operations update, GMA rallied 5.2% on an upgrade. RDY got bid for rising 28.1%.

In economic news, the RBA raised rates 25bps, ANZ has stuck with its view that the RBA will deliver another 0.25% rate rise in December. Capital Economics says the revisions made to the Reserve Bank’s economic forecasts were “slightly hawkish” with a peak at 3.85%. Asian markets firmed and 10-year yields at 3.77% steady after RBA.

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US markets saw a little selling pressure last night with the Dow falling 128 points (-0.4%) at 32732. The S&P 500 fell 0.75% to finish at 3872. Nasdaq though fell harder with the index down 1.03% to 10988. October has been a good month for the market with a near 14% gain in the Dow for its best month since 1976. The S&P and Nasdaq gained about 8% and 3.9%, respectively, for October. This is the best October ever. In Europe, Stoxx 50 +0.1%, FTSE +0.7%, CAC -0.1%, and DAX +0.1%. ASX SPI Futures are up 10 points.

Technology and communications stocks were the biggest drags on the broader market. Apple fell 1.5%, and Google’s parent fell 2%. Communication services fell 1.7%. November has historically been one of the strongest months of the year for US stocks. The S&P 500 has experienced an average gain of 0.82% with positive returns 69% of the time, according to data going back to 1983. Morgan Stanley has called for the rally to reach 4000-4150 but now leaning toward the upper bound.

In the bond market, two-year US yields moved higher to around 4.5%. The yield on 10-year Treasuries advanced three basis points to 4.05%. Swap markets are pricing in a 75bps hike this week. JPMorgan is joining strategists who believe the aggressive hiking by global central banks is close to an end. BlackRock said the markets are rallying on hopes that policy tightening is coming to an end, which it thinks is premature. The Bloomberg Dollar Spot Index rose 0.75%.

In commodities, gold slid 0.5%, and Oil was off nearly 2%. Base metals were mostly lower, and iron ore fell also. Bitcoin fell 1.1% to $20,409.

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ASX 200 pushed another 78 points higher to 6864 (+1.2%) as Tech rebounded. Everything performing well except Resources and Energy. Banks pushed higher again as the Big Bank Basket rose to $186.77 (+1.3%). Insurers positive, AMP up 4.6% and MPL finally moving up 0.7%. Healthcare made steady gains, with CSL up 2.3% and IDX up 6.9%. Industrials were positive as the sector moved up 1.1%, TLSDA up 1.6% and RWC doing well up 3.6% as bond yields marginally increased to 3.74%. RBA decision tomorrow.REITs happy, WES up 3.2% and PBH bouncing up 3.6%. Tech stocks were winning today with the All-Tech index up 2.6%. XRO doing a backflip on last week and bouncing 4.6% and Resources still hurting as iron ore stocks continue to fall, BHP down 0.3%, RIO down 0.4%. Lithium stocks having a good day with, PLS up 4.5% and CXO up 3.4%. Gold miners the worst performer of the day, NCM dropping 2.6% and GOR down 3.2%. Coal had a mixed day with YAL down 3.2% and WHC down 4.1% yet SMR up 2.9%.

Dow futures are down 14 points.

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