Wall St flat, Telstra investor day, RBA meeting minutes today, HCW is an Add: ASX to open lower

Major indexes around the globe were mixed with marginal gains or losses as they awaited bullish catalysts. Wall St digested Treasury Secretary Janet Yellen’s remarks says reason for the inflation spike. Morgans rated HealthCo Healthcare & Wellness REIT (ASX:HCW) as an add.

The Australian sharemarket is set to open lower with the SPI futures pointing to a fall of 0.5 per cent.

Muted moves with US stocks

Wall St closed flat as investors await fresh retail sales figures this week amid watching President Biden signing the US$1.2 trillion infrastructure bill into law.

Musk hints at selling more Tesla shares

Shares in Tesla fell 2.0 and is now under the US$1,000 mark. The decline follows CEO Elon Musk looking to sell some more stock. It does follow the tweets with Senator Bernie Sanders who said that the wealthy must pay their fair share. Musk almost sold US$7 billion of Tesla stock last week.

In the EV space, rival Rivian continues to climb after making their debut last week. Shares closed almost 15 per cent higher.

Yellen says pandemic to blame for inflation spike

Market participants also digested Treasury Secretary Janet Yellen’s remarks on inflation after she said that “the pandemic has been calling the shots for the economy and for inflation. And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do.” Ms Yellen said she would expect prices to go back to normal when the pandemic ends.

We do know that there has been a lot of government stimulus injected into the economy brought on by the pandemic, so there is some truth behind what she has said. But there is a lot of scrutiny right now in Washington about all the spending, and how high the prices will rise and for how long.

Manufacturing grows but outlook is uncertain

Meanwhile, in economic news, manufacturing activity grew in November according to the New York Federal Reserve. General business conditions grew to 30.9 in November from 19.8 in October, against an expectation of a reading of 21.6. Meanwhile, the report said that companies were concerned about the six-month outlook with the index for future business conditions tumbling to 36.9 in November from 52.0 in October.

Wall St mixed as bond yields rise

At the closing bell, the Dow Jones fell 0.04 per cent to 36,087, the S&P 500 closed flat at 4,683 while the Nasdaq closed 0.04 per cent lower at 15,854.

Across the S&P 500, there were four losers with utilities as the best performer, followed by energy and consumer staples. Healthcare was the worst performer with materials and information technology closing lower as we see that rising bond yield.

The yield on the 10-year treasury rose 6.0 basis points to 1.62 per cent, gold fell against a weaker greenback.

European markets gains on optimism from China

Across the Atlantic, European markets closed higher as enthusiasm transcended from China’s eco news offsetting inflation concerns and interest rate hikes. The major indexes rose mildly amid Germany’s fresh outbreak rising to its highest level since the start of the pandemic.

Paris added 0.5 per cent, Frankfurt gained 0.3 per cent and London’s FTSE closed 0.1 per cent higher

Mixed finish across the commodity players in UK trade. BHP dropped 1.9 per cent, Rio lost 1.1 per cent while BP added 0.2 per cent. Shell gained 1.4 per cent after the giant said it would unify its dual share structure. This would enable Shell to boost share buybacks and shift its tax residence from the Netherlands to the UK.

In other news, Philips tumbled almost 11 per cent after the US regulator raised more questions about its product recall following a facility inspection. The world’s second-largest cinema chain Cineworld rose 7.0 per cent after posting an improvement in October box office revenue.

Asian Markets mixed ahead of virtual summit

Asian markets closed mixed as investors await moves from the virtual summit.

Tokyo’s Nikkei added 0.6 per cent after their economy contracted much faster-than-expected in the third quarter. Expectations for Prime Minister Fumio Kishida are mounting to unveil a stimulus package.

Hong Kong’s Hang Seng gained 0.3 per cent, while China’s Shanghai Composite fell 0.2 per cent as investors await President Joe Biden and Xi Jinping to talk through views on bilateral and international issues at the virtual summit this week.

China grows at a slower pace beating expectations

China’s Industrial production rose 3.5 per cent over the year in October according to the National Bureau of Statistics, up from 3.1 per cent in September.

Retail sales grew at an annual rate of 4.9 per cent, beating expectations for 3.5 per cent, up from 4.4 per cent in September.

Fixed asset investment rose to 6.1 per cent for the year and the unemployment rate came in unchanged at 4.9 per cent last month. The house price index was up 3.4 per cent, growing slower from from 3.8 per cent the month before.

ASX 200 starts the week on a positive note

Yesterday, the Australian sharemarket closed 0.4 per cent higher at 7,470 thanks to a rise in health and tech stocks. Among the sectors, three out of the 11 finished in the red with energy and financials weighing on the index.

CSL (ASX:CSL) rose 0.8 per cent amid a broker upgrade citing the company’s strong global position in the marketplace. The plasma and vaccine maker has only two other major competitors, with high barriers to entry.

Woodside Petroleum (ASX:WPL) is set to sell its 49 per cent stake in its Pluto Train 2 project to Global Infrastructure Partners. A move closer to its final investment decision on its proposed Scarborough development in WA. Under the deal, Global Infrastructure Partners will fund $3.7 billion of the capital expenditure and also fund $1.1 billion in construction capital. Shares jumped 1.1 per cent.

Incitec Pivot (ASX:IPL) closed 3.9 per cent higher after the fertiliser maker posted a 91 per cent rise in underlying net profit from a year ago thanks to higher commodity prices. The explosives maker also declared a dividend.

Mesoblast (ASX:MSB) surged after the drug developer released positive phase three trial results on one of its cellular medicines at the American Heart Association annual meeting. The specialised drug is used to fight inflammation in heart attack and stroke victims.

The best-performing stock in the S&P/ASX 200 was Mesoblast (ASX:MSB) closing 11.8 per cent higher at $1.90 followed by shares in ResMed (ASX:RMD) and Nextdc (ASX:NXT).

The worst-performing stock in the S&P/ASX 200 was Uniti Group (ASX:UWL) closing 2.5 per cent lower at $3.94, followed by shares in Ampol (ASX:ALD) and Platinum Asset Management (ASX:PTM).

Local economic news

Today the Reserve Bank is set to release minutes of the Board meeting from last month.

Eyes will be on these minutes as the minutes give the context to the central bank’s decision. Given that the RBA discontinued the three-year bond yield target which saw the bond yield rally, it may give us an insight to why they made that move.

The RBA Governor Phillip Lowe is pencilled in to deliver a paper on “Recent Trends in Inflation”, a very timely topic given where inflation is around the globe.

ANZ and Roy Morgan will release the weekly consumer confidence index.

Broker moves

Morgans rates HealthCo Healthcare & Wellness REIT (ASX:HCW) as an add with a target price of $2.48. The REIT is forecasted to grow via development and acquisition, offering leverage to the fast growing themes of health, wellness, technology and an ageing population. The aim is to provide stable and growing distributions, and capital growth via exposure to hospitals, aged care, childcare, government, life sciences and research, as well as Primary Care & Wellness properties. The REIT is externally managed by ASX-listed Home Consortium (ASX:HMC) who has a 20 per cent stake. Shares in HealthCo Healthcare & Wellness REIT (ASX:HCW) closed 0.9 per cent higher at $2.16 yesterday.

Ex-dividend

There is one company set to trade ex-dividend today.

AusNet Services (ASX:AST) is paying 4.75 cents unfranked

Dividend-pay

There are two companies set to pay eligible shareholders today.

Clover Corporation (ASX:CLV)
Partners Group Global Income Fund (ASX:PGG)

AGM

There are five companies set to meet with shareholders today.

JCurve Solutions (ASX:JCS)
Kip McGrath Education Centre (ASX:KME)
Lifestyle Communities (ASX:LIC)
Mirvac Group (ASX:MGR)
Pilbara Minerals (ASX:PLS)

Quarterly update

New Hope Corporation (ASX:NHC) is set to release a quarterly report today.

IPO

There is one company set to make their debut on the ASX today. Keep an eye out for Evolution Energy Minerals (ASX:EV1).

Commodities

Iron ore has lost 0.7 per cent to US$89.15. Its futures point to a 0.5 per cent fall.

Gold lost $3.60 or 0.2 per cent to US$1865 an ounce, silver was down $0.20 or 0.8 per cent to US$25.15 an ounce.

Oil was up $0.09 or 0.1 per cent to US$80.88 a barrel.

Currencies

One Australian Dollar at 8:15 AM has strengthened from yesterday, buying 73.46 US cents 54.81 Pence Sterling, 83.87 Yen and 64.65 Euro cents.

Investor event

The last event for the year is today with four companies presenting from financial services, wireless technology to pharmaceutical companies. Make your way to fnn.com.au to reserve your free online spot.