Tomorrow's trading on the ASX?

[eskys]

Iron Ore: What Recession?​

Iron ore prices have been green in 18 of the last 23 trading sessions. It's pretty extraordinary to see prices run so hot amid downbeat data from China:

• Steel production in October hit a 5-year low
• Iron ore prices have pushed steel margins to near all-time low (i.e. steel mills are not incentivised to produce more)
• China house prices fell the most in eight years in October
• China housing starts are sitting around 15 year lows

There's no doubt a lot of expectations for stimulus and we've started to see a few trickle through. On Tuesday, the first major Chinese builder reached a restructuring agreement to overhaul its debt. Shares in Sunac jumped as much as 21% to a two-month high.
Fortescue (ASX: FMG) is within an arms reach of all-time highs and trading at levels similar to when iron ore prices were US$200 a tonne back in July 2021. I guess there's two ways to look at this:

• Half full: If iron ore is trading at US$130 a tonne with the above economic data. What will things look like when these data points bottom and begin to turn?
• Half empty: Iron ore and miners are running into areas of clear resistance. They need to take a breather at the very least.

Fortescue weekly chart (Source: TradingView)​

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: Nufarm (NUF) – $0.05, US Student Housing REIT (USQ) – $0.005
• Dividends paid: Brickworks (BKW) – $0.42
• Listing: None

Economic calendar (AEDT):

• 7:35 pm: RBA Bullock Speech
• 12:30 am: US Durable Goods Orders

 

[eskys]

MARKETS​

• S&P 500 finished higher in a relatively rangebound session ahead of the US Thanksgiving Day holiday
• Nasdaq closed higher but off best levels due to weakness from heavyweights Nvidia (-2.5%) and Tesla (-2.9%)
• Volatile session for oil prices, down 1.4% from a session low of -5.1% after US crude oil inventories increased more than expected
• Market narrative remains relatively unchanged: Seasonality tailwinds, peak Fed and falling yields, strong earnings from Nvidia (but expectations and positioning elevated into the result), sustained CTA buying
• Hedge funds short sellers suffer an estimated $43bn of losses in sharp rally in recent days (FT)
• RBC joins BofA in expectations for S&P 500 to reach 5,000 in 2024 (Yahoo)
• OPEC delays November 26-30 policy meeting without providing a reason (CNBC)
• Saudis in difficult talks with other members about their production levels (Bloomberg)
• Goldman Sachs says OPEC will use its pricing power to keep prices between US$80-100 a barrel and sees a 35% likelihood of deeper production cuts

STOCKS​

• Nvidia's revenue guidance tops expectations as AI chip boom powers on (Bloomberg)
• Sam Altman returns to OpenAI as CEO (Reuters)
• Bezos expected to aggressively sell more shares of Amazon (CNBC)
• John Deere says higher borrowing costs will hit demand, guides to weaker-than-expected 2024 profit outlook (Reuters)
• HP forecasts downbeat first quarter profit amid slow PC market recovery (Reuters)

CENTRAL BANKS​

• Fed minutes stress careful approach, does not rule out more hikes (Reuters)
• BOJ reduces JGB purchases at its regular buying operations, yields rise (Reuters)
• ECB's Lagarde say can't declare victory on inflation until 2% goal met (Bloomberg)
• ECB's Schnabel says disinflation process projected to slow (Bloomberg)
• RBA's Bullock says board seeks to cool demand, maintain employment (Bloomberg)

GEOPOLITICS​

• Israel agrees to four-day truce with Hamas, 50 hostages to be released (FT)
• Biden's diplomatic breakthrough on Israeli hostage release after weeks of talks brokered by Qatar, US and Egypt (FT)
• Russian parliament approves spending bill to allocate more on defense than social services for first time in decades (AP)

CHINA​

• Chinese government advisers to seek 2024 GDP growth target 4.5% to 5.5% (Reuters)
• China state bank purchases said to be accelerating, yuan gains (Reuters)
• Evergrande chairman's mansions seized by company creditor (Bloomberg)
• Sunac China project secures loan from government-backed asset manager (Bloomberg)

ECONOMY​

• US short-term inflation expectations climbed to a 7-month high in Nov (Bloomberg)
• US weekly jobless claims fall more than expected (Reuters)
• US durable goods orders fall on weakness in transportation equipment (Reuters)
• Japan downgrades economic assessment for first time in 10 months (Reuters)

Industry ETFs​

Thu 23 Nov 23, 8:22am (AEDT)

Name	Value	% Chg
Commodities
Uranium	28.81	+0.35%
Gold Miners	29.25	+0.14%
Steel	68.68	-0.19%
Silver	21.66	-0.51%
Copper Miners	34.44	-0.61%
Lithium & Battery Tech	48.8	-1.29%
Strategic Metals	57.7	-1.72%
Industrials
Aerospace & Defense	118.0	+0.72%
Global Jets	16.75	+0.66%
Construction	55.15	+0.57%
Agriculture	22.075	-0.47%
Healthcare
Biotechnology	118.72	+0.64%
Cannabis	5.4	-

Name	Value	% Chg
Cryptocurrency
Bitcoin	18.9903	+2.26%
Renewables
CleanTech	9.73	+0.52%
Solar	46.05	+0.02%
Hydrogen	6.34	-0.78%
Technology
FinTech	21.35	+1.04%
Sports Betting/Gaming	16.4799	+1.01%
E-commerce	19.23	+1.00%
Cloud Computing	20.22	+0.45%
Semiconductor	515.07	+0.32%
Video Games/eSports	55.46	+0.27%
Cybersecurity	25.89	+0.12%
Electric Vehicles	22.94	+0.09%
Robotics & AI	26.25	-0.04%

 

[eskys]

Lithium Prices are Spiraling Lower​

China's most-traded lithium carbonate futures contract tumbled 7% on Wednesday to a record low of 124,000 yuan a tonne.
The VanEck Rare Earths/Strategic Metals ETF (-1.55%) and Lithium & Battery Tech ETF (-1.3%) were also the worst performing ETFs in the above table.
Pilbara Minerals (ASX: PLS) shares tumbled 3.8% on Wednesday, not far off 7-month lows.

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: ALS (ALQ) – $0.196, Cobram Estate Olives (CBO) – $0.033
• Dividends paid: None
• Listing: None

Economic calendar (AEDT):

• 9:00 am: Australia Manufacturing and Services PMI
• 8:00 pm: Eurozone Manufacturing and Services PMI

 

[eskys]

MARKETS​

US markets closed for Thanksgiving – All US-related data above is from Wednesday

• Pan-European STOXX 600 up 0.27% to a fresh two-month high
• Energy was the best performing sector, up 1.3% bouncing from previous sharp losses
• European bonds fell after Germany suspended debt limits for a fourth consecutive year, adding to concerns over more borrowing as the Eurozone economy slows (Bloomberg)
• Slim majority of market watchers expect new highs for global equities (Reuters)
• Low-cost and active ETFs attracted US$39bn in October while costly passive ETFs suffered a net US$bn in outflows (FT)
• OPEC+ meeting delayed amid dispute over output quotas (Bloomberg)
• Iron ore rally continues as China policy support spur hopes of property recovery (AFR)

CENTRAL BANKS​

• ECB's Nagel says peak rate is close but cannot exclude another move (Bloomberg)
• Increasing attention on BOJ operations after trimmed JGB purchases (Nikkei)
• Sweden's central bank keeps rates and QT unchanged (Bloomberg)
• South African central bank opts for another hawkish hold (Reuters)

GEOPOLITICS​

• Four-day Israel-Hamas ceasefire has been delayed until Friday (Bloomberg)
• Dutch right wing populist Geert Wilders wins parliamentary elections (Bloomberg)
• US and Chinese working to increase flights between two countries (Bloomberg)
• Inter-Korean tensions ratchet higher after Pyongyang scraps military accord (FT)

CHINA​

• China steps up efforts to revive property sector with measures aimed at plugging industry funding shortfalls (Bloomberg)
• China seen to hold MLF rate steady for rest of 2023 (Bloomberg)
• Country Garden leads rally in China property following support headlines (Bloomberg)
• One of China's largest shadow banks warns it's "severely insolvent" (Bloomberg)

ECONOMY​

• US short-term inflation expectations climb to 7-month high in November (Bloomberg)
• US mortgage rates fall to lowest level since September at 7.29% (Bloomberg)
• Eurozone PMI shows stabilisation in November (Bloomberg)
• UK services sector supports economy in November (Bloomberg)
• French business confidence weakens further in November (Reuters)
• Germany PMIs fall more slowly than previous month (Reuters)

 

[eskys]

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: Ci Resources (CII) – $0.05
• Dividends paid: Wotso Property (WOT) – $0.03
• Listing: None

Economic calendar (AEDT):

• 10:30 am: Japan Inflation Rate
• 8:00 pm: Germany IFO Business Climate

 

[eskys]

MARKETS​

• Major US benchmarks were little changed in a shortened Friday trading session
• S&P 500 and Nasdaq cap off fourth-straight week of gains
• S&P 500 is up 8.7% so far in November, the best November since 1957 (ex-Covid)
• S&P 500 VIX Index falls to 12.5, the lowest since January 2020
• US bond yields bounced to 1-2 week highs, with the 2-year almost back at 5.0%
• Gold reclaims US$2,000 level as US Dollar Index nears 3-month low
• Risk sentiment continues to ramp up on easing financial conditions, disinflation momentum, growing soft landing expectations and peak Fed narratives
• Nasdaq launches zero day options across Treasury and commodity markets (FT)
• Investors sell US dollar at fastest pace in a year (FT)
• Investors stashing cash in money market funds may be bullish sign for stocks (WSJ)

STOCKS​

• OpenAI turmoil exposes threat to Microsoft's investment (FT)
• Nvidia will delay new AI chip designed to comply with US export restrictions (CNBC)
• Coinbase shares rally as Bitcoin briefly tops US$38,000 (CNBC)
• Amazon set to win unconditional EU approval for $1.4bn bid for iRobot (Reuters)
• Mastercard SpendingPulse says Black Friday sales rose 2.5% year-on-year (Reuters)

CENTRAL BANKS​

• ECB's Villeroy says ECB won't raise rates again, excluding surprises (Bloomberg)
• BoE chief economist Pill warns of vigilance in inflation fight (FT)

GEOPOLITICS​

• Israel and Hamas set to begin four-day truce on Friday (FT)
• Israeli intelligence 'dismissed' detailed warning of Hamas raid (FT)
• North Korean rocket stage exploded after satellite launch (Reuters)
• US and EU trade meeting was due to take place next month but now expected to slip to early next year (Bloomberg)
• Argentina's new President Milei quickly toning down aggressive rhetoric toward largest trading partners (Bloomberg)

CHINA​

• China likely to wait until early next year to cut policy rates (Bloomberg)
• WHO asks China for information on child pneumonia outbreak (Bloomberg)
• China says multiple pathogens are behind spike in respiratory illness (Bloomberg)
• China's labor market seen as weaker than official data shows (Bloomberg)
• Beijing investigating shadow bank Zhongzhi as it faces US$37bn shortfall (FT)

ECONOMY​

• Analysts cut holiday spending estimates on weaker Black Friday traffic (Reuters)
• Resilient consumer spending continuing to support broader US economy (Bloomberg)
• Black Friday ecommerce spending rose 7.5% to record US$9.8bn but sales likely to taper off from here, according to Adobe Analytics (CNBC)
• Japan manufacturing PMI flags deeper contraction, services marginally firmer (Reuters)
• Japan core inflation slightly misses, service prices hit 30-year high (Bloomberg)
• German Q3 GDP slightly shrinks (Reuters)
• New Zealand retail sales surprise higher (Bloomberg)
• US PMIs steady in November (Reuters)

 

[eskys]

Industry ETFs​

Mon 27 Nov 23, 8:21am (AEDT)

Name	Value	% Chg
Commodities
Silver	22.27	+2.77%
Uranium	29.07	+0.90%
Strategic Metals	58.06	+0.45%
Gold Miners	29.32	+0.24%
Copper Miners	34.49	+0.15%
Lithium & Battery Tech	48.81	+0.02%
Steel	68.59	-0.13%
Industrials
Aerospace & Defense	118.49	+0.45%
Construction	55.3705	+0.40%
Global Jets	16.81	+0.36%
Agriculture	21.74	-1.50%
Healthcare
Cannabis	5.56	+2.96%
Biotechnology	119.36	+0.54%

Name	Value	% Chg
Cryptocurrency
Bitcoin	19.11	+0.63%
Renewables
Hydrogen	6.39	+0.79%
CleanTech	9.63	-1.03%
Solar	45.48	-1.26%
Technology
FinTech	21.59	+1.12%
Electric Vehicles	23.15	+0.92%
Cybersecurity	26.1	+0.81%
Sports Betting/Gaming	16.5603	+0.44%
E-commerce	19.3	+0.36%
Cloud Computing	20.27	+0.25%
Semiconductor	515.44	+0.07%
Robotics & AI	26.24	-0.04%
Video Games/eSports	55.18	-0.50%

---

Sectors to Watch: Gold​

US markets continued to grind higher in a relatively quiet and shortened trading session. Most of the above sector ETFs finished slightly higher notably Fintech (+1.1%), Uranium (+0.9%) and Cybersecurity (+0.8%).
The VanEck Gold Miners ETF (+0.2%) logged a smaller overnight gain as gold prices closed above the key US$2,000 level. The ETF has recently marked a higher high and testing key levels such as the 200-day moving average and the $30 level.
Gold is rallying off the back of a falling US dollar, peak yields and rising geopolitical conflicts. The yellow metal is also exposed to secular forces such as rising US government debt, volatile inflation and economic headwinds which make it attractive for the medium-to-long term.

VanEck Gold Miners ETF (Source: TradingView)​

 

[eskys]

Bullish Times Ahead?​

Here are three interesting tidbits about recent market drivers: Peak Fed, equity inflows and the strong November.
#1 Peak Fed: "For all of the oddities of this cycle, S&P has basically done exactly what it should have done following the peak of inflation (this analog goes back to the 1950s)," says Goldman Sachs.

Source: Goldman Sachs​

#2 Buyers are back: US retail investors bought US$4.8bn of equities last week. This coincides with the peak Fed narrative as well as the sharp pullback in bond yields. Cash is being deployed from safe havens as equities become slightly more attractive.

Source: JPMorgan​

#3 A massive November: The S&P 500 is on track for one of its best November gains on record. The Index has gained more than 8% fewer than 10 times since 1928. Of these standout Novembers, all but one had more gains the following year.

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: Red Hill Minerals (RHI) – $0.10, Whitefield Industrials (WHF) – $0.102
• Dividends paid: None
• Listing: None

Economic calendar (AEDT):
No major economic announcements.

 

[eskys]

CommSec

@CommSec
·
19m

Profits at China's industrial firms fell 7.8% in the first 10 months of 2023 from a year earlier, data showed on Monday, as a shaky post-pandemic economic recovery struggles to gain momentum. The slide followed a 9% profit decline in the first nine months to September.

 

[eskys]

MARKETS​

• S&P 500 traded in a tight range, finished lower and near worst levels
• Quiet session coming out of the Thanksgiving-shortened session
• US bond yields notably weaker across the curve, with the 10-year down 9 bps to a fresh 2-month low of 4.39%
• Market narrative remains relatively unchanged, driven by disinflation momentum, peak Fed, soft landing traction, elevated cash on the sidelines, seasonality tailwinds, falling oil prices and low volatility
• Deutsche Bank sees 12% upside to S&P 500 through 2024-end (Reuters)
• BMO sees solid US gains ahead, S&P 500 ending 2024 at 5,100 (Reuters)
• Investors sit on record $5.7tn in money market funds, which could be bullish tailwind for risk assets (WSJ)
• Gold hits six month high amid soft landing optimism (WSJ)
• OPEC+ members including Iraq and Russia resist Saudi Arabia’s call to reduce oil output quotas to shore up global markets (Bloomberg)

STOCKS​

• iRobot shares plummet after EU regulator said Amazon's planned $1.7bn acquisition raises competition concerns (CNBC)
• Okta downgraded by JPMorgan after last months cybersecurity breach ‘significantly degraded’ the company’s brand (CNBC)
• Albemarle shares slide 6% as battery metal prices continue to plummet (Bloomberg)

CENTRAL BANKS​

• Inflation gauges in the US and Eurozone at 2021 lows which may support end of Fed, ECB rate hikes (Bloomberg)
• BoE Governor Bailey warns of tough battle to bring down inflation (Bloomberg)
• Australia to bill giving RBA experts more responsibility for setting rates (Reuters)
• Bank of Korea likely to keep policy rate steady (Yonhap)

CHINA​

• China's industrial profits growth slows, prompting calls for policy support (Reuters)
• Beijing Stock Exchange limiting sales by major shareholders (Reuters)
• China sees signs of ebbing pneumonia in children (Bloomberg)

ECONOMY​

• Cyber Monday deals getting snapped up by price-sensitive US consumers (Reuters)
• Mastercard SpendingPulse says US retail sales on Black Friday up 2.5% year-on-year, eCommerce sales up 8.% year-on-year (Mastercard)
• US new home sales down 5.6% month-on-month on higher mortgage rates (Reuters)
• US gasoline prices down for 60-straight days to US$3.25 national average or 60 cents below recent peak (Bloomberg)

Industry ETFs​

Tue 28 Nov 23, 8:21am (AEDT)

Name	Value	% Chg
Commodities
Gold Miners	29.79	+1.60%
Silver	22.56	+1.30%
Steel	68.96	+0.54%
Uranium	29.03	-0.14%
Copper Miners	33.99	-1.45%
Lithium & Battery Tech	47.66	-2.36%
Strategic Metals	56.42	-2.82%
Industrials
Construction	55.3	-0.13%
Aerospace & Defense	117.97	-0.44%
Agriculture	21.59	-0.69%
Global Jets	16.6	-1.25%
Healthcare
Biotechnology	118.57	-0.66%
Cannabis	5.45	-1.98%

Name	Value	% Chg
Cryptocurrency
Bitcoin	18.4	-3.72%
Renewables
Hydrogen	6.39	-
CleanTech	9.515	-1.19%
Solar	44.63	-1.87%
Technology
E-commerce	19.47	+0.88%
FinTech	21.78	+0.88%
Cybersecurity	26.23	+0.50%
Cloud Computing	20.28	+0.05%
Robotics & AI	26.25	+0.04%
Video Games/eSports	55.13	-0.09%
Semiconductor	514.72	-0.14%
Sports Betting/Gaming	16.4314	-0.78%
Electric Vehicles	22.96	-0.82%

 

[eskys]

VIX Near 4-Year Lows: Bullish or Bearish​

Complacency is traditionally a dangerous thing in financial markets. One way to determine whether participants are feeling complacent is to look at the Volatility Index – Sometimes called the VIX or the Fear Gauge.

That fear gauge is currently at the lowest levels in nearly four years – Driven by an expectation the US Federal Reserve is done raising interest rates and a resilient corporate earnings picture.

S&P 500 VIX Chart (Source: TradingView)​

The Morning Wrap has talked about a lot of other indicators bouncing from extreme levels in late October, including:

• CNN's Fear & Greed Index – Which is nearing 'Extreme Greed'

Source: CNN​

• Bank of America's Bull & Bear Indicator – Which has only just exited 'Extreme Bearish' levels as of last Friday, 24 November

Source: BofA Global Investment Strategy​

• AAII Investor Sentiment Survey – In the first week of November, 24.3% of respondents were 'Bullish' vs. a historical average of 37.5%. It's now back up to 45.3%.

Source: AAII Investor Sentiment Survey​

• Currency markets – The Australian Dollar is at a three-month high against the US Dollar and the US Dollar Index, a classic risk-aversion indicator, is hovering at lows not seen since August.

US Dollar Index chart (Source: TradingView)​

Most indicators have returned to neutral or bullish levels. They're not at extreme levels yet, which might provide more fuel in the tank and coincides with the traditional end-of-year seasonality factors. But what happens when the Fear & Greed Index enters 'Extreme Greed' or the US Dollar Index hits extreme oversold levels?

 

[eskys]

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: Beacon Minerals (BCN) – $0.001
• Dividends paid: Champion Iron (CIA) – $0.11, Embark Early Education (EVO) – $0.02, Silk Laser Australia (SLA) – $0.10
• Listing: None

Economic calendar (AEDT):

• 11:30 am: Australia Retail Sales (Oct)
• 6:00 pm: Germany Consumer Confidence (Dec)

 

[eskys]

MARKETS​

• Major US benchmarks finished slightly higher, down from best levels
• S&P 500’s intraday range over the last two trading days has been the narrowest since December 2019, according to Bespoke Investment Group
• US bond yields continued to ease across the curve, the 2-year yield sold off 15 bps to the lowest levels since July 2023
• US Dollar Index extends its losing streak to four, marks lowest close since August 2023
• Gold prices continue to rally, now up 12% since early October and on par with previous peaks in May 2023, March 2022 and August 2020
• Market strategists warn that contrarian the positioning and sentiment tailwind has faded, corporate buyback activity is near its peak
• One options trader positioning for 250 bps of Fed cuts in 2024 (Bloomberg)
• Strategists optimistic on S&P 500 in 2024 with potential top of 5,000 (Bloomberg)
• Citi says S&P 500's best on record November rally running out of steam (Bloomberg)

STOCKS​

• Several high-profile IPOs are in the pipeline for 2024 including eCommerce company Shein, social media site Reddit, Kim Kardasian-backed Skims and Microsoft-backed cloud company Rubrik (Bloomberg)
• PPD Holdings, the parent of Pinduoduo and Temo, reported a 94% year-on-year jump in revenue in the third quarter (CNBC)
• Affirm shares surge after Jefferies upgraded the stock to Hold from Underperform (CNBC)

CENTRAL BANKS​

• Global central banks brace for uncertain future as inflation era persists (Bloomberg)
• Fed’s Waller says if inflation goes down, there is no reason to insist interest rates remain “really high” and the Fed’s response should be to lower rates (Bloomberg)
• BoE leads central bank chorus on need for restrictive policy (Reuters)
• PBOC, Chinese authorities urge banks to boost lending to private sector (Nikkei)
• PBOC bank pledges to support domestic demand (Reuters)
• PBOC ramps up liquidity to rein in surge in short-term rates (Nikkei)
• ECB's Lagarde mulls early end to bound purchases to accelerate balance sheet reduction (FT)

GEOPOLITICS​

• Israel and Hamas extend truce by two days (Bloomberg)
• US warns Israel over southern Gaza offensive, must not worsen refugee crisis (FT)

ECONOMY​

• Cyber Monday sales forecast to hit to record (FT)
• US consumer confidence rebounds more than expected in November (Reuters)
• US gasoline prices have fallen for 60-straight days (Bloomberg)
• Japan's underlying inflation measures mostly ease, but data still support BOJ case for normalising monetary stimulus (Reuters)
• GfK German consumer sentiment barely higher heading into holiday season (Reuters)
• Eurozone M3 money supply growth continues to contract, down 1.0% in October (Reuters)

 

[eskys]

Industry ETFs​

Wed 29 Nov 23, 8:30am (AEDT)

Name	Value	% Chg
Commodities
Gold Miners	31.23	+4.83%
Copper Miners	34.72	+2.21%
Silver	22.92	+1.60%
Strategic Metals	57.29	+1.54%
Lithium & Battery Tech	48.21	+1.15%
Steel	69.21	+0.36%
Uranium	28.87	-0.55%
Industrials
Agriculture	21.95	+1.67%
Global Jets	16.6618	+0.37%
Aerospace & Defense	117.933	+0.06%
Construction	54.53	-1.39%
Healthcare
Biotechnology	118.21	-0.30%
Cannabis	5.32	-2.39%

Name	Value	% Chg
Cryptocurrency
Bitcoin	19.2284	+4.50%
Renewables
Solar	45.23	+1.34%
CleanTech	9.54	+0.26%
Hydrogen	6.39	-
Technology
FinTech	22.19	+1.88%
E-commerce	19.8151	+1.77%
Cloud Computing	20.49	+1.04%
Video Games/eSports	55.35	+0.40%
Electric Vehicles	23.0	+0.17%
Cybersecurity	26.25	+0.08%
Sports Betting/Gaming	16.37	-0.32%
Robotics & AI	26.16	-0.34%
Semiconductor	511.71	-0.58%

 

[eskys]

Australia's Monthly CPI Print​

Hi! Hans here making a rare Wednesday appearance. We have an important inflation read out at 11:30 am AEDT – The Monthly Inflation Indicator for October.
It's not an all-encompassing print but it has become a tool in the RBA's decision-making process around interest rates. Here is your preview:

• Consensus forecast: 5.2% headline year-on-year, according to a Bloomberg survey
• Highest forecast: Market Economics' Stephen Koukoulas at 5.5%.
• Lowest forecast: HSBC's Paul Bloxham at 4.9%.
• Inflation was at 5.6% in September

An upside surprise, even marginally, could add at least one more rate hike to the rates curve. Equally, a downside surprise ,even marginally, could reinforce the global disinflation narrative and send equities far north.

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: Infratil (IFT) – $0.05, Graincorp (GNC) – $0.30, 360 Capital Mortgage REIT (TCF) – $0.03, Liberty Financial Group (LFG) – $0.12, Newmont Corp (NEM) – $0.42, KKR Credit Income Fund (KKC) – $0.01
• Dividends paid: HomeCo Daily Needs REIT (HDN) – $0.02, HealthCo Healthcare and Wellness REIT (HCW) – $0.02
• Listing: None

Economic calendar (AEDT):

• 11:30 am: Australia Construction Work (Q3)
• 11:30 am: Australia Monthly CPI Indicator (Oct)
• 12:00 am: Germany Inflation (Nov)
• 12:30 am: US GDP (Q3)

 

[divs4ever]

those lunatics at Commsec are at it again , the portfolio is up MTB up , HVST down a full half an hour before open

( and neither stock has officially traded yet )

 

[eskys]

CommSec

@CommSec
·
2h

For the month, the headline CPI fell by 0.3% in October, driven by declines in petrol, rent and holiday travel. #ausecon #auspol
@CommSec
Quote








CommSec

@commsec
·
2h
Australia, monthly Consumer Price Index (CPI) indicator (October 2023): Annual headline print: 4.9% (survey: 5.2%, prior: 5.6%). #ausecon #auspol @commsec

 

[farmerge]

View attachment 166407
CommSec
@CommSec
·
2h

For the month, the headline CPI fell by 0.3% in October, driven by declines in petrol, rent and holiday travel. #ausecon #auspol
@CommSec
Quote






View attachment 166408

CommSec

@commsec
·
2h
Australia, monthly Consumer Price Index (CPI) indicator (October 2023): Annual headline print: 4.9% (survey: 5.2%, prior: 5.6%). #ausecon #auspol @commsec

What no haircuts, dining out or takeaway food. This has to be the reason for the CPI drop not the realistic things like petrol, rent and the like !!!!!

 

[eskys]

MARKETS​

Our overnight tables are experiencing some issues. They will be back tomorrow

• S&P 500 finished slightly lower, down from session highs of 0.72%
• US bond yields sold off for a third-straight session, 2-year yield down 31 bps in the last three sessions to lowest level since 14 July
• Market now expects the first Fed cut to take place in May 2024 with nearly 100 bps in easing seen for the full year (two months ago, it only expected 50 bps of easing)
• Investors Intelligence bulls jumped to 55.7% in latest survey, marks the highest level since late July’s 57.1% and enters the ‘caution zone’ (major indices tumbled more than 10% in September)
• Insiders snap up company shares, signals rally has room to run (Bloomberg)
• Bill Ackman bets Fed will begin cutting rates as soon as the first quarter of 2024, sooner than markets are expecting (Bloomberg)
• Derivatives markets positioning for aggressive Fed easing in 2024 (Bloomberg)
• OPEC+ continuing to hold talks on 2024 policy, with no delay to a meeting scheduled for Friday (Reuters)

STOCKS​

• Apple to end credit card partnership with Goldman Sachs (Bloomberg)
• 3M and DuPont win forever chemicals class action lawsuit (Reuters)
• Micron raises guidance but below analyst expectations (Bloomberg)
• CrowdStrike sees strong Q4 on resilient cybersecurity demand (Reuters)
• GM sees US$9.3bn hit from labour deals, outlines US$10bn buyback (Reuters)
• Hewlett Packard beats quarterly profit estimates but forecast falters (Reuters)
• Lineage Logistics eyes US$30bn valuation in IPO next year (Bloomberg)

CENTRAL BANKS​

• Fed officials signal December pause (Bloomberg)
• RBNZ on hold, warns of further rate hikes if inflation surprises (Bloomberg)
• Rising JGB yields drive BOJ's unrealized losses to 10.5 trillion yen (Nikkei)
• China-style quantitative easing emerges as property fix option (Bloomberg)
• Bank of Korea expected to leave rates unchanged Thursday (Bloomberg)

GEOPOLITICS​

• Hamas releases more hostages as CIA and Mossad meet (Reuters)
• Finland will close entire border with Russia until 13-Dec (CNBC)
• US Congressional leaders to drop China investment curbs from Defence Bill (Bloomberg)

ECONOMY​

• US economy grows 5.2% in the third quarter (Reuters)
• German inflation eases to 3.2% in November (Reuters)
• Spanish inflation falls to 12-month low of 3.2% in November (Reuters)
• Australian inflation cools by more than expected, strengthening case for December pause (Bloomberg)

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The Aussie Dollar Resurgence​

After a little while in the doldrums, the Australian Dollar is back at levels we haven't seen since early August. Earlier this week, the local currency also passed its 200-day moving average for the first time in four months (I am no technical aficionado, but I've been informed this is important). There are several reasons why the Australian Dollar has been on a good run:

• The US Dollar has fallen sharply as traders bet the Fed is done with rate hikes
• The front end of the US bond curve has also acted as a big depressant on Australian Dollar strength. Now that yields are coming down, the local unit has room to move higher
• Iron ore has been on a tear, with prices are up 10% in the past month and that has flown through to the local unit given we are widely perceived as a China and risk-on proxy
• The switch to gold and bonds as a safe haven takes away from the US Dollar and this has also, without a doubt, impacted the value of the reserve currency

Some traders argue the Australian Dollar would be on an even bigger run if it were not for fears of an intervention in the Chinese and Japanese currency markets by those respective central banks.

AUD/USD (Blue) vs. ASX 200 (Red) | Source: TradingView​

 

[eskys]

The JPMorgan Bull, Bear, and Base Case​

Marko Kolanovic, who was once one of Wall Street's most outspoken bulls, has been noticeably far more bearish in recent months. His bull, bear, and base case tables reveal some incredibly interesting storylines over the next three months.

Source: JPMorgan​

The base case at JPM is currently the bearish view, with Kolanovic's team arguing that "stocks should be an underweight in portfolios given a slowing economy, increasingly constrained consumer, margin compression, valuations, and the potential for Fed-induced economic destruction."
And before you think Kolanovic is a party pooper, you may want to award that title to BCA Research instead. The Montreal-based investment advisory firm is calling for a ~10% earnings downgrade cycle next year and an S&P 500 that could finish the year at just 3,700. If that pans out, that would be an 18% fall in the S&P 500... which also happens to be the gain for the S&P 500 this year. You can read more about the S&P 500 targets (and the wild, wild range between analysts here.)

Key Events​

ASX corporate actions occurring today:

• Trading ex-div: Aristocrat Leisure (ALL) – $0.34, Technology One (TNE) – $0.14
• Dividends paid: Bisalloy Steel (BIS) – $0.10, Rand Mining (RND) – $0.10, Copper Strike (CSE) – $0.02, Acrow (ACF) – $0.02, Kelly Partners (KPG) – $0.004, Janus Henderson (JHG) – $0.61, Tribune Resources (TBR) – $0.20, BlackWall (BWF) – $0.02, US Student Housing REIT (USQ) – $0.005
• Listing: Freedom Care Group (FCG) – 11:00 am

Economic calendar (AEDT):

• 11:30 am: Australia Building Permits (Oct)
• 11:30 am: Australia Housing Credit (Oct)
• 12:30 pm: China NBS Manufacturing and Services PMI (Nov)
• 9:00 pm: Eurozone Inflation (Nev)
• 11:00 pm: India GDP (Oct)
• 12:30 am: Canada GDP (Q3)
• 12:30 am: US Personal Consumption Index (Oct)