Australian Market Preview 24 September


A snapshot of overnight moves and a look to the upcoming Australasian session for 24 September.



Market Moves

2020-09-24_Market_Moves
 
Wrap
US markets stumbled again as investors remembered about all the negatives looming on the horizon. President Trumps comments weren't a great help. Before US markets opened he accuesed China of unleashing Covid-19 on the world, and then later in the day, he remarked that the US Presidential Election would most likely end up in the Supreme Court. Additionally, investors once again fretted about the impact of the Covid-19 pandemic in Europe. 

The tech-heavy NASDAQ paced losses, it closed down 2.37%, as Tesla (TSLA) fell 10%, and stalwarts like Apple (AAPL), Amazon (AMZN) and Netflix (NFLX) each fell around 4%. The benchmark S&P500 was down 2.37%, and the blue chip-laden Dow Jones Industrial Index lost 1.92%. 

Metals prices on the LME were sharply weaker. Falls of up to 3% were not uncommon, and Copper was nearly 4% lower in New York. Iron Ore prices are 0.52% lower in early trading on the Chinese Dalian Exchange, and 0.85% lower in the Singapore-based $US price.

Looking at precious metals, Spot Gold got hammered as the US continued its recent resurgence. It fell 2.38% to US$1855/oz, whilst Silver lost 9.22% to US$22.25/oz.

Energy commodities were modestly weaker in comparison to other risk-on markets. West Texas Crude dipped 0.51% to US$39.46/barrel, Brent lost 0.67% to US$42.26/barrel. Natural Gas was the notable exception, as it powered 15.92% higher.

In currency moves, the Australian Dollar plunged another 1.4% to 0.7066 as the US Dollar Index advanced 0.43%.

Interestingly, risk off bonds were lower as well. The yields on the US 10 year Treasury Note rose 0.6bp to 0.675%.

So, with a number of risk on and risk off assets deteriorating overnight, where did the ASX200 Share Price Index end up? Well, it had a lacklustre session, closing at 5850 compared to an overnight session high of 5947 and a low of 5844.

That's a 73.9 point discount to yesterday's ASX 200 close of 5923.9, and predictive of approximately a 1.5% fall at the open for the S&P ASX200. 

 

AU Companies

Ex-Dividend Stocks
Capitol Health (CAJ) $0.005 fully franked
Countplus Limited (CUP) $0.0125 fully franked
Ebos Group Ltd (EBO) $0.324053 95.77% franked
Fonterra Share Fund (FSF) $0.039091 unfranked
Glennon Small Companies Ltd (GC1) $0.02 unfranked
Heartland Group (HGH) $0.022999 85% franked
Lindsay Australia (LAU) $0.005 fully franked
Lycopodium Limited (LYL) $0.05 fully franked
Mastermyne Group Ltd (MYE) $0.04 fully franked
Swick Mining (SWK) $0.003 fully franked
Vita Life Sciences (VLS) $0.015 fully franked
 
Broker Moves
News Corporation NWS Credit Suisse raises News Corporation (NWS) price target from $23.25 to $25.00. Retains outperform rating. Is pleased with investor briefing comments.
Nufarm NUF Credit Suisse raises Nufarm (NUF) price target from $5.04 to $5.07. Retains outperform rating. Reviews FY20 results. Sees as modestly positive.
Nufarm NUF Macquarie raises Nufarm (NUF) price target from $4.26 to $4.50. Retains neutral rating. Notes FY20 results slightly better than expected.
Nufarm NUF UBS raises Nufarm (NUF) price target from $4.87 to $5.25. Retains buy rating. Reacts positively to FY20 results, better than expected.
Treasury Wine Estates TWE Credit Suisse upgrades Treasury Wine Estates (TWE) rating from neutral to outperform. Retains $12.30 price target. Sees increased value on the back of recent share price falls.

 

Macro Economy

There aren’t any major economic data releases scheduled locally for today. Later this evening, US Fed Chairman Jerome Powell will complete his 2-day speech to US lawmakers, and we'll also see US weekly unemployment benefit claims.

Below is a summary of the key macroeconomic data releases from the past 24 hours.
 
USA
Data from IHS Markit showed that the growth of US business activity edged slightly lower in September. The flash U.S. Composite PMI Output Index fell to 54.4 from 54.6 in August. A reading above 50 indicates growth in the sector surveyed. This shows that business activity continued to expand, but at a slower rate.

Gains at factories offset a slowdown in services industries. The flash manufacturing PMI increased to 53.5 from 53.1 in August, whilst the services sector flash PMI fell to 54.6 from 55.0.

Chris Williamson, chief business economist at IHS Markit said "The question now turns to whether the economy's strong performance can be sustained into the fourth quarter. Risks therefore seem tilted to the downside for the coming months."



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