Wall St closes mixed after inflation hit 3-decade highs, iron ore rebounds amid news that Beijing may loosen their grip around rules on domestic bond issues by Chinese property developers. ASX 200 falls for 4th day on jobs report. Servcorp’s rating gets upgraded as per UBS.
The Australian sharemarket is set to lift with the SPI futures pointing to a gain of 0.4 per cent
US stocks close mixed after inflation hit 3-decade highs
US stocks closed mixed with the Nasdaq and the S&P 500 snapping its 2-day losing streak. The Dow continued to fall for its third straight day dragged down by Disney.
Disney closed almost 7.0 per cent lower after showing slower growth for its streaming service missing Wall St expectations. Park revenue grew not enough to offset the slow growth across the subscriber numbers.
Shares in Tesla fell 0.4 per cent after CEO Elon Musk sold around US$5 billion shares to meet a tax bill. Over the five days, the share price has fallen over 13 per cent.
Rival EV-truck maker Rivian surged over 22 per cent after its made its debut on the Nasdaq yesterday. The company is backed by Amazon and is considered one of the world’s biggest initial public offerings this year.
Oil falls as OPEC cuts demand forecasts
OPEC has cut its oil demand forecasts for the rest of the year noting weaker demand from China and India and higher energy prices. Demand was revised down by 330,000 barrels per day to 99.49 million. The group also raised its supply forecast from U.S. shale producers next year, a potential headwind in an effort to balance the market.
It will be interesting to see if the group will review increasing output in the next meeting given the acknowledgement of higher prices.
Wall St mixed as bond market close
At the closing bell, the Dow Jones lost 0.4 per cent to 35,921, the S&P 500 added 0.1 per cent to 4,649 while the Nasdaq closed 0.5 per cent higher at 15,704.
Across the S&P 500 materials was the best performer, followed by information technology, and energy while utilities was the laggard.
Inflation concerns pushed bond yields higher yesterday. The bond market was closed for Veterans Day so the yield on the 10-year Treasury is at 1.57 per cent as of yesterday. Gold rose against a stronger greenback.
European markets rally on miners
Across the Atlantic, European markets closed higher. Paris added 0.2 per cent, Frankfurt gained 0.1 per cent and London’s FTSE added 0.6 per cent lifted by miners.
Miners leapt while oil players fell. BHP jumped 3.9 per cent, Rio gained 3.4 per cent, BP dropped 0.8 per cent, Shell lost 0.5 per cent.
BP and engineering company Aker jointly sold five per cent of their combined 70 per cent stake in Norwegian oil firm Aker BP. Shares tumbled 10.7 per cent. Catalytic converter maker Johnson Matthey crashed over 17 per cent after announcing plans to exit its battery materials business citing that they’re too far behind its rivals. Burberry tumbled 5.2 per cent after they reported lower sales in Europe and Japan due to reduced tourist numbers.
Asian markets rally on renewed hope in property
Asian markets closed higher on optimism that Beijing may loosen their grip around rules on domestic bond issues by Chinese property developers amid new bank lending beating estimates for October.
Tokyo’s Nikkei added 0.6 per cent as investors await economic stimulus. Hong Kong’s Hang Seng gained over 1.0 per cent as property shares after embattled Evergrande managed to rustle up the funds to meet its obligations after a 30 day period ended for bonds worth to value of $200 million. China’s Shanghai Composite rose 1.2 per cent.
ASX 200 falls for 4th day on jobs report
Yesterday, the Australian sharemarket closed 0.6 per cent lower at 7,382 sliding for the fourth straight day, its worst one-day fall in the past seven days as investors digested the jobs data on the local bourse after an inflation jump on Wall St.
Employment fell 46,300 jobs against a market expectation of a fall of 50,000 while the participation rate rose by 0.1 basis point to 64.7 per cent. The unemployment rate to 5.2 per cent.
The weaker data, given that it is retrospective and is a reflection of when NSW and Victoria were in lockdown. That said, economists expect employment to rebound quite strongly, the unemployment rate tobe lower as the country continues to reopen as we head towards Summer.
Back in the winner’s corner was materials rising 2.3 per cent after being the worst performer on Wednesday but the winner the day before. Communication services marginally rose 0.8 per cent while the others closed in the red. The biggest pressure was information technology down 2.5 per cent with healthcare and energy falling near the 2.0 per cent mark.
Nearmap (ASX:NEA) tumbled after presenting their annual contract trading guidance as they held their AGM indicating growth at a slower pace. The aerial mapping provider guided to an annual contract value of $150 million to $160 million for financial year 2022, a growth of 17 to 25 per cent. However, when you compare this to the previous year, it is at a slower rate of 26 per cent that was achieved.
Xero (ASX:XRO) posted a disappointing first-half financial year 2022 result as international subscriber growth slowed over the period after investing more into its sales, marketing and product development. The company also showed a slow down in growth in one of their key metrics, which is the average revenue per user in the Australasian market which makes up almost 60 per cent of their sales.
Fortescue Metals (ASX:FMG) took the limelight after chief executive Elizabeth Gaines gave a strong impression on funding over its clean energy unit, Fortescue Future Industries and list of green energy projects. Rio Tinto (ASX:RIO) added 1.9 per cent while BHP (ASX:BHP) surged 2.6 per cent after holding their AGM.
Chalice Mining (ASX:CHN) surged again taking its three-session gain to 48 per cent amid brokers raising its target price following its platinum-nickel-copper deposit discovery in Western Australia.
The best-performing stock in the S&P/ASX 200 was Chalice Mining (ASX:CHN) closing 9.6 per cent higher at $10.01, followed by shares in Fortescue Metals Group (ASX:FMG) and Regis Resources (ASX:RRL).
The worst-performing stock in the S&P/ASX 200 was Nearmap (ASX:NEA) closing 12.3 per cent lower at $1.89, followed by shares in Xero (ASX:XRO) and Zip Co (ASX:Z1P).
To find out how Ansell (ASX:ANN), Orica (ASX:ORI), Nine Entertainment (ASX:NEC), and Ramsay Health Care (ASX:RHC), click here.
UBS downgraded Servcorp’s (ASX:SRV) rating to neutral from a buy with a raised target price of $4.60. The office workspace provider reaffirmed financial year 2022 guidance noting that operating conditions are improving. Occupancy rates in September were slightly below June which the broker believes reflects recent restrictions in Australia. UBS considered the stock a recovery trade as it is highly leveraged to improving market dynamics. The post-pandemic environment is also likely to be structured more favourably as competitors face significant challenges. The stock has rallied almost 34 per cent since unveiling its full year results in August. The rating is downgraded but the target price is raised by 11 per cent to $4.60. Shares in Servcorp (ASX:SRV) closed flat at $4.50 yesterday.
There are 3 companies trading ex-dividend today.
Dicker Data (ASX:DDR) is paying 9 cents fully franked
Maas Group Holdings (ASX:MGH) is paying 3 cents fully franked
SSR Mining Inc (ASX:SSR) is paying 5.0349 cents unfranked
There are two companies set to pay eligible shareholders dividends today.
CTI Logistics (ASX:CLX)
Katana Capital (ASX:KAT)
There are 8 companies set to meet with eligible shareholders today.
Adore Beauty Group (ASX:ABY)
Alterity Therapeutics (ASX:ATH)
Boadicea Resources (ASX:BOA)
Godolphin Resources (ASX:GRL)
LendLease Corporation (ASX:LLC)
Prescient Therapeutics (ASX:PTX)
Stavely Minerals (ASX:SVY)
There is one company set to make their debut on the ASX today. Keep an eye out for APM Human Services International (ASX:APM), they are set to list with a $3.3 billion market cap after raising $982 million. APM is a disability services provider with their customer based being mainly government agencies.
Iron ore has gained 5.3 per cent to US$94.20. Its futures point to a 0.5 per cent gain.
Gold continued to rally after the price surged after hot inflation figures sitting at 3 decade highs. Yesterday we saw gold, bond yields and the greenback all rise, something you don’t see that often but signs that market participants are looking for a rate hike sooner rather than later.
Gold gained $16.60 or 0.9 per cent to US$1865 an ounce, silver was up $0.56 or 2.3 per cent to US$25.33 an ounce.
Oil was down $0.22 or 0.3 per cent to US$81.12 a barrel.
One Australian Dollar at 8:15 AM has weakened from yesterday, buying 72.92 US cents, 54.58 Pence Sterling, 83.20 Yen and 63.69 Euro cents.
The last event for the year is coming up next Tuesday 16 of November 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.