Evening Wrap: ASX 200 bounces, Woodside closes at a 4-year high, US futures inch higher

The S&P/ASX 200 closed 37 points higher, up 0.54%.

The local sharemarket finishes the week on a positive note as miners and oil shares rally, Australian retail sales increase for a fourth-straight quarter, the US dollar snaps an almost six day winning streak and all eyes on the US jobs report tonight.

Let's dive in.

Markets

The ASX 200 shrugged off a weak open, where it tumbled -0.41%. The index rallied from 11:30 am AEDT onwards, closing around session highs. The ASX 200 managed to finish the week 1.57% higher.

• Resources led to the upside as the US dollar snapped an almost six day winning streak where it rallied 3.0%. The weaker dollar inspired broad-based gains across energy and metal prices

• Energy headlined the gains after Woodside rallied 3.9% to levels not seen since October 2018

• Materials trailed closely behind as depressed iron ore prices bounced during market hours. BHP, Rio Tinto and Fortescue closed between 1.5% to 3.9% higher

• Tech might be a surprising sector to see showing signs of strength. Its worth noting that many large cap tech names like Altium, Xero and WiseTech rallied quite strongly intraday on Thursday

• 52% of the top 200 advanced

Economy

Australia retail sales rose 0.2% in the September quarter.

• A fourth consecutive quarterly increase, but the smallest since lockdowns ended in October 2021

• “Sales volumes reached a new record level in the September quarter 2022, but growth slowed to just 0.2 per cent following 1.0 per cent quarterly rises in the June and March quarters.” - Ben Dorber, ABS Head of Retail Statistics

• “While volumes growth eased, retail prices climbed a further 2.0 per cent in the September quarter 2022, reflecting the strong rise seen in last week’s Consumer Price Index.”

Commodities 

Energy and base metal prices extended gains during market hours as the US dollar snapped an almost six day winning streak where it rallied 3.0%. A strong US dollar has traditionally weighed on commodity prices, that are priced in dollars.

• Singapore iron ore futures rose 3.5% to US$86.3 a tonne

  • Futures on China's Dalian Commodity Exchange rallied 4.2%

Latest news

Post market brief

The ASX 200 found some support around that key ~6,820 level we've been talking about. This move was supported broad-based strength across Energy and Materials stocks, which helped offset the weakness among Financials and Health Care.

Still, the market remains in a vulnerable and volatile state. But at least its managed to defend the lows from Thursday.

US payrolls and unemployment data is due tonight, which could see some more fireworks on Wall Street. Its interesting to note that job growth has beaten estimates in 10 of the last 12 months. The stronger-than-expected jobs data on 7 October resulted in a -2.8% selloff for the S&P 500.

Could we see another better-than-expected figure, which then reinforces the Fed's hawkish stance, driving yields and the dollar higher and the markets lower?

Charts of interest

S&P/ASX 200: A bounce from ~6,820. The short-term moving averages (20-day and 50-day) are positive sloping. The 200-day is flattening. Do we see some consolidation around these levels? Or will overnight US market performance say otherwise?

XJO chart (Source: TradingView)

S&P/ASX 200 Energy: Big weekly close, highest since January 2020

XEJ chart (Source: TradingView)

 S&P/ASX 200 Tech: Tightening with higher lows and lower highs. Is tech poised for a big move?

XIJ chart (Source: TradingView)

A few individual large cap charts of interest.

Woodside: Breakout mode. Didn't even need oil back at US$100 a barrel.

Woodside chart (Source: TradingView)

WiseTech: Is one of several tech names that have held up pretty well in the face of a tumbling Nasdaq and hawkish Fed. Can these consolidating names break out?

WiseTech chart (Source: TradingView)

Pilbara Minerals: Haven't seen sideways action in this lithium heavyweight in a long time.

Pilbara Minerals (Source: TradingView)

Major announcements

Large caps (>$1bn)

• Block (ASX: SQ2) +10.9% generated gross profits of US$1.57bn, up 38% year-on-year in the third quarter of 2022 

• CSR (ASX: CSR) +3.5% posted 27% net profit growth in 1H22 to $110m. The building products segment posted 15% EBIT growth, reflecting “good execution across end markets, price discipline and cost management.”

• PWR Holdings (ASX: PWH) +3.5% held its AGM. No specific FY23 guidance was provided, but the company said it expects “moderate revenue growth for FY23” for key segments including Motorsports, Automotive OEM and Aerospace & Defence

• Pendal (ASX: PDL) -0.2% posted 17% profit growth to $194.2m for its financial year ended 30 September against a “backdrop of significant challenges that are buffeting the asset management sector.” 

• GPT Group (ASX: GPT) -0.7% reaffirmed its 2022 guidance of approximately 32.4 cents per share. “Office lease enquiry improved over the quarter, although leasing conditions remain subdued with elevated market vacancy,” notes GPT

• Magellan Financial (ASX: MFG) -2.4% posted its monthly funds under management update. Total FUM rose 0.2% month-on-month in October to $51bn   

Mid-to-small caps

• Integral Diagnostics (ASX: IDX) +1.1% said YTD October 2022 revenues grew by 3.1% compared to the prior period but cost inflation is exerting pressure on margins 

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