| World Overnight | |||
| SPI Overnight (Dec) | 6502.00 | – 64.00 | – 0.97% |
| S&P ASX 200 | 6593.40 | + 29.80 | 0.45% |
| S&P500 | 2893.06 | – 45.73 | – 1.56% |
| Nasdaq Comp | 7823.78 | – 132.52 | – 1.67% |
| DJIA | 26164.04 | – 313.98 | – 1.19% |
| S&P500 VIX | 20.28 | + 2.42 | 13.55% |
| US 10-year yield | 1.54 | – 0.02 | – 1.03% |
| USD Index | 99.13 | + 0.15 | 0.15% |
| FTSE100 | 7143.15 | – 54.73 | – 0.76% |
| DAX30 | 11970.20 | – 127.23 | – 1.05% |
By Greg Peel
Nice Try
Once again we find ourselves in a position in which going into detail about yesterday’s action on the ASX is a bit pointless given overnight developments. The ASX200 rally yesterday, defying weakness on Wall Street, smacked of catch-up by those who were on holiday on Monday, but unfortunately it was not the best call.
Wall Street has taken another tumble and our futures are down -64 points this morning.
For what it’s worth, all sectors closed in the green yesterday by varying amounts. There was no discernible pattern.
Consumer discretionary (+1.0%) led the charge along with energy (+1.0%), supported by industrials (+0.9%) and utilities (+0.7%). Second tier performances were provided elsewhere except for telcos, which sat on the bench.
Mayne Pharma ((MYX)) topped the index winners’ board with an 8.0% gain, kicking on after its oral contraceptive deal. Collins Foods ((CKF)) rose 5.0% for no clear reason. The top losers were gold stocks, but they may well be the outperformers today.
Outside the index, a trading update from Baby Bunting ((BBN)) was worth -5.9%
The NAB business conditions survey for September showed a rise in the conditions index of one point to +1.6, still below average. The confidence index fell one point to -0.3, well below average. The March and September confidence numbers this year are the lowest since 2013.
No rate cut excitement there.
The ANZ job ads series showed a small 0.3% gain in September after falling -2.2% in August. But the annual decline is -10.4%. ANZ economists suggest recent employment strength reflects growth in public sector jobs, while the job ads series reflects weakness in the private sector. One assumes public sector growth cannot last.
Confidence Deteriorating
Before the opening bell on Wall Street last night, the US blacklisted another 28 Chinese companies, including AI firms, due to their involvement in human rights violations against the Uighur Muslim minority.
The White House is also reportedly moving forward with discussions around capital flow restrictions into China, specifically from government pension funds.
The Chinese Vice Premier said he will cut his trip to Washington short, arriving for talks on Thursday but leaving on Friday instead of Saturday as originally planned.
Carrie Lam told Hong Kong the violence has to stop. Tourism was -50% below average in Golden Week.
The EU dismissed Johnson’s Brexit deal proposal.
The Dow fell -350 points.
Just when it appeared all hope was lost, out came Jerome Powell. The Fed chair announced the Fed will begin purchases of short term US Treasury bills.
You mean QE?
No, no, no, no this is not QE. This is simply a “technical” implementation designed to address recent tightness in the overnight funding (repo) market.
The Dow rallied back 300 points on the news. A rose by any other name…
But just when it appeared all hope was not lost, news hit the wires the US will impose visa bans on Chinese officials involved in the aforementioned detention of the Uighur minority.
The Dow closed down -300 points.
These latest human rights punishments are a new twist, and arguably nothing to do with trade. But the timing is all to do with trade. Does the White House believe turning the screws on Beijing is more likely to result in concessions than rolling out the red carpet? What happened to all the Happy Talk?
Suffice to say market confidence of any sort of breakthrough or progress on trade this week took a solid hit last night.
As did US stock indices.
Commodities
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 1505.20 | + 13.10 | 0.88% |
| Silver (oz) | 17.72 | + 0.33 | 1.90% |
| Copper (lb) | 2.55 | – 0.02 | – 0.59% |
| Aluminium (lb) | 0.78 | – 0.00 | – 0.46% |
| Lead (lb) | 0.97 | – 0.01 | – 0.56% |
| Nickel (lb) | 7.93 | – 0.18 | – 2.25% |
| Zinc (lb) | 1.05 | – 0.00 | – 0.45% |
| West Texas Crude | 52.21 | – 0.70 | – 1.32% |
| Brent Crude | 57.85 | – 0.60 | – 1.03% |
| Iron Ore (t) futures | 94.50 | + 0.60 | 0.64% |
It was revealed yesterday China has bought 100 tonnes (3.5moz) of gold in the past ten months.
China returned to metal markets last night. Note that the LME closed as Wall Street was rallying back, before the later tumble, when the US dollar index was higher than the 0.15% gain it settled at.
The oils weren’t doing a lot until the visa ban news.
The Aussie is steady at US$0.6728.
Today
The SPI Overnight closed down -64 points or -1.0%.
Westpac releases its consumer confidence survey for October today.
The minutes of the September Fed meeting are released tonight and Powell will speak again.
The Australian share market over the past thirty days…
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| CSL | CSL | Upgrade to Overweight from Equal-weight | Morgan Stanley |
| FAR | FAR LTD | Downgrade to Equal-weight from Overweight | Morgan Stanley |
| LLC | LENDLEASE | Downgrade to Neutral from Buy | UBS |
| NXT | NEXTDC | Upgrade to Add from Hold | Morgans |
| PPH | PUSHPAY HOLDINGS | Downgrade to Lighten from Hold | Ord Minnett |
| SYD | SYDNEY AIRPORT | Upgrade to Outperform from Neutral | Macquarie |
