Evening Wrap: ASX 200 can't back a winner ahead of this week's biggest race

The S&P/ASX 200 closed 32.8 points lower, down 0.40%.

All 11 of the major ASX sectors plus the Gold sub-index were down today – but only the gold sector fell by more than one percent. There were no major themes driving local stocks today in lacklustre RBA, Melbourne Cup, and looming US presidential election trade.

It feels like everything is on hold until later this week...but if something even half-interesting did happen, you can be sure it's covered in tonight's Evening Wrap...so click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all of the key upcoming economic data in tonight's Evening Wrap.

Also (Warning: Super Interesting!!!), I have detailed technical analysis on Chinese stocks and High Grade Copper in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 32.8 points lower at 8,131.8, 0.41% from its session high and just 0.23% from its high/low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a rather dismal 89 to 186.

All 11 of the major ASX sectors plus the Gold (XGD) (-1.1%) sub-index were down today – but only the gold sector fell by more than one percentage. There were no major themes driving local stocks today in lacklustre RBA, Melbourne Cup, and looming US presidential election trade.

I've got full details of the RBA's "won't rule anything in or out" cash rate-hold in the Economy section below, and for a fascinating deep dive on potential US presidential election outcomes you might want to check out this article.

Otherwise, I got the feeling that everything is also on hold for local shares until later this week, so I’ll just do the best and worst performers tables today…

Today's best performing stocks

Today's worst performing stocks

ChartWatch

FTSE China A50 Index Futures

Time for the next round

The last time we covered China A shares was in ChartWatch in the Evening Wrap on 8 October.

In that update, supply had finally arrived to pour cold water on one of the most stunning and vertical rallies you’ll see in any market – the September stimulus-juiced fling.

How did we know supply had arrived? It’s called a bleeding big black candle ⬛🕯️.

China A shares have not printed higher than the top of that candle since.

The destination was perhaps not surprisingly (for long-suffering readers of this section of the Evening Wrap), the dynamic demand we have come to expect at the short term trend ribbon. It’s held up its part of the bargain as a zone of excess demand – and by logical extension – it's also held up Chinese stock prices.

The last 3 candles have a growing demand-side tinge to them, and assuming today’s still-live candle can close here or better – they will potentially signal we’re ready for the next leg up here.

It’s a big "if". You’ll have to check in later this evening to see if that white candle is still white, and the candle close is at or very near the session’s high. Obviously, any extra price increase from here is further evidence of even greater growing demand-side control =✅.

Extrapolate this out to your favourite Aussie resources stocks any way you wish…(I know you already have!)

Hang Seng China A Properties Index

The only thing better than China A shares going up is China A Property shares going up!

Perhaps this chart will assist in your extrapolations. If Chinese property stocks were the root of the problem for the broader Chinese economy and stock market, then this is a very encouraging chart. I would go so far as to say this is now clearly a demand-side market with a strongly rising short term trend ribbon, rising peaks and rising troughs, and a predominance of demand-side candles (i.e., those with white bodies and or downward pointing shadows).

High Grade Copper Futures (Front month, back-adjusted) COMEX

Thanks China, luv ya work!

The last time we covered high grade copper was in ChartWatch in the Evening Wrap on 22 October.

In that update, copper’s own September stimulus-juiced fling had fizzled out and I proposed it was “make or break here at the long term uptrend ribbon”. Fortunately for copper devotees, the long term uptrend ribbon held up its part of the bargain just like China A shares short term uptrend ribbon – you know – acting as dynamic demand and all that…

You don’t have to be Nobel Prize laureate in Economics to draw a line between the above two charts and this one. So, heads up copper bulls, China is again potentially riding to your rescue.

Today’s candle is live, so the close above the 4.457 point of demand is not concrete yet. If it ends up that way – and if like we’re also hoping for the current candle in the Chinese stock indices charts – we get a strong candle close – then the technicals are going to swing back to indicating likely demand-side control here.

A close above 4.499 would be an even stronger indication, and dare I say would confirm the resumption of the short term uptrend. The next logical point of supply from there is the critical 4.762-4.79 zone – but let’s not get ahead of ourselves.

Demand remains at the long term uptrend ribbon, and just below it at 4.274-4.291.

Economy

Today

• 14:30 AUS RBA Cash Rate announcement, Monetary Policy Statement, and RBA Statement

  • No change to the Cash Rate as forecast at 4.35%

  • Governor Bullock press conference comments:

    • "We do think that there are still some risks on the upside. There's still a significant amount of demand in the system [with respect to underlying services inflation still running at around 5% p.a.]...that suggests demand is still above supply, and we still have a labour market that still looks on the tightish side...That's why we can't rule anything in or out."

    • "I'm not going to be drawn into another forward guidance. What I would say is that I think at the moment we have the right settings. I think that monetary policy is restrictive and that's showing up in a number of parts of demand. We will continue to assess the indicators coming through, and we will try to make sure that we're tuned in enough that if things start to turn down more than expected we are ready to act, but we don't know."

    • "We're not predicting a big recession. [Recent economic strength / unemployment rate of 4.1%] is a remarkable outcome and yes we're watching, and it is softening and I don't see a massive turnaround...but we will be alert to it."

    • "We still see the risks as balanced on both sides here. What will it take for us to change our mind on the downside? It might be that consumption doesn't perform. We expect consumption to pick up, but if that doesn't eventuate, then demand isn't going to be quite as strong. On the other hand, if productivity doesn't pick up and the supply side of the economy is still constrained, that might mean that there's more inflationary pressures on that side as well."

Later this week

Wednesday

• 02:00 USA ISM Services PMI October (53.4 forecast vs 54.9 in September)

• All Day USA US Presidential & Congressional Election

Thursday

• 12:00 CNY Trade Balance October (RMB 560 billion forecast vs RMB 583 billion September)

• UK Bank of England (BOE) Official Bank Rate announcement and Monetary Policy Summary

Friday

• 06:00 USA FOMC Meeting and Federal Fund Rate announcement (-0.25% forecast to 4.50-4.75%)

• 06:30 USA Federal Reserve Chairman Jerome Powell press conference

Saturday

• 02:00 USA University of Michigan Consumer Sentiment Index (70.6 forecast vs 70.5 previous)

• 12:30 CHN Consumer Price Index (CPI) October y/y (+0.3% p.a. vs +0.4% p.a. in September)

• 12:30 CHN Producer Price Index (PPI) October y/y (-2.5% p.a. vs -2.8% p.a. in September)

Latest News

Interesting Movers

Trading higher

• +10.1% Avita Medical (AVH) - No news, rise is consistent with prevailing short term uptrend, closed above long term trend ribbon 🔎📈

• +8.5% Appen (APX) - No news, rise is consistent with prevailing long term uptrend, closed back above short term trend ribbon with a healthy white candle 🔎📈

• +7.7% Lifestyle Communities (LIC) - Becoming a substantial holder from HMC - weirdly only 2.69% (usually disclosures are made for stakes equal or greater than 5%), but an interesting development nonetheless…because why would HMC disclose their interest so soon? 🤔

• +7.1% The Star Entertainment Group (SGR) - Notification of ceasing to be a substantial holder-Perpetual, on first pass hardly a reason to rally, but could indicate a major overhang is nearly out of the way (suggest this wasn't a very happy investment for Perpetual!)

• +5.2% Chalice Mining (CHN) - No news, rise is consistent with prevailing short term uptrend, long term uptrend is transitioning from down to up, bounced perfectly off both short and long term trend ribbons 🔎📈

• +4.1% Mineral Resources (MIN) - No news, three brokers retained BUY-equivalent ratings today (see Broker Moves section below for more details)

• +3.1% Metals X (MLX) - Rentails Mineral Resource Update - D Dam, rise is consistent with prevailing short and long term uptrends, has been a recent regular in ChartWatch Daily ASX Scans Uptrends lists 🔎📈

Trading lower

• -6.3% Domino's Pizza Enterprises (DMP) - Announcement regarding CEO, fall is consistent with prevailing short and long term downtrends, one of the most Featured stocks in ChartWatch Daily ASX Scans Downtrends lists 🔎📈

Domino's Pizza Enterprises (DMP) chart (click here for full size image)

• -4.2% Capricorn Metals (CMM) - No news, generally weaker ASX gold sector today on subdued gold price

• -3.4% Ora Banda Mining (OBM) - No news, ditto struggling ASX gold sector

• -3.1% Paladin Energy (PDN) - No news, continued weakness in ASX uranium sector on subdued uranium price

• -3.0% West African Resources (WAF) - WAF Grade Control Returns 18m at 6.3 g/t gold at Kiaka, ditto struggling ASX gold sector

• -3.0% Data#3 (DTL) - No news, fall is consistent with prevailing short and long term downtrends, has been a recent regular in ChartWatch Daily ASX Scans Downtrends lists 🔎📈

• -3.0% Guzman y Gomez (GYG) - No news, fall is consistent with prevailing short and long term downtrends, has been a recent regular in ChartWatch Daily ASX Scans Downtrends lists 🔎📈

• -2.9% Champion Iron (CIA) - No news, fall is consistent with prevailing short and long term downtrends, has been a recent regular in ChartWatch Daily ASX Scans Downtrends lists 🔎📈

Broker Notes

• Life360 (360)

  • Retained at overweight at Morgan Stanley; Price Target: $23.00 from $20.50

• Audinate Group (AD8)

  • Downgraded to neutral from outperform at Macquarie; Price Target: $10.20 from $14.60

• Avjennings (AVJ)

  • Retained at buy at Bell Potter; Price Target: $0.45

• Brazilian Rare Earths (BRE)

  • Retained at buy at Ord Minnett; Price Target: $7.00

• Champion Iron (CIA)

  • Retained at buy at Goldman Sachs; Price Target: $7.50 from $7.30

  • Retained at outperform at Macquarie; Price Target: $6.80 from $7.00

• Capstone Copper Corp. (CSC)

  • Retained at outperform at Macquarie; Price Target: $12.80

• CSL (CSL)

  • Retained at accumulate at Ord Minnett; Price Target: $320.00

• Domain Australia (DHG)

  • Retained at buy at Citi; Price Target: $3.65

• Domino's Pizza Enterprises (DMP)

  • Retained at neutral at Macquarie; Price Target: $35.00

• Emerald Resources (EMR)

  • Retained at hold at Ord Minnett; Price Target: $4.00 from $3.90

• Firefly Metals (FFM)

  • Initiated at buy at RBC Capital Markets; Price Target: $1.55

  • Retained at buy at Shaw and Partners; Price Target: $1.90

• GPT Group (GPT)

  • Retained at buy at Citi; Price Target: $4.90

  • Retained at overweight at Morgan Stanley; Price Target: $6.15

• Insurance Australia Group (IAG)

  • Retained at outperform at Macquarie; Price Target: $8.00

• Lifestyle Communities (LIC)

  • Retained at neutral at Citi; Price Target: $9.50

• Lynas Rare Earths (LYC)

  • Downgraded to neutral from outperform at Macquarie; Price Target: $7.80

  • Retained at accumulate at Ord Minnett; Price Target: $7.80

• Meteoric Resources (MEI)

  • Retained at buy at Ord Minnett; Price Target: $0.20

• Mineral Resources (MIN)

  • Retained at buy at Bell Potter; Price Target: $61.50

  • Retained at overweight at Morgan Stanley; Price Target: $58.00

  • Retained at accumulate at Ord Minnett; Price Target: $44.00 from $42.00

• Medallion Metals (MM8)

  • Initiated at buy at Morgans; Price Target: $0.27

• Medibank Private (MPL)

  • Retained at neutral at Macquarie; Price Target: $3.85

• Macquarie Group (MQG)

  • Retained at sell at Citi; Price Target: $177.00 from $176.00

• NIB (NHF)

  • Retained at neutral at Macquarie; Price Target: $6.30

• Premier Investments (PMV)

  • Retained at neutral at Macquarie; Price Target: $34.20 from $31.90

• QBE Insurance Group (QBE)

  • Retained at buy at Citi; Price Target: $19.30

  • Retained at neutral at Macquarie; Price Target: $17.10

• Retail Food Group (RFG)

  • Retained at buy at Shaw and Partners; Price Target: $0.10

• Ramsay Health Care (RHC)

  • Retained at hold at Ord Minnett; Price Target: $42.40

• Rio Tinto (RIO)

  • Retained at overweight at Morgan Stanley; Price Target: $135.00

• Rox Resources (RXL)

  • Retained at buy at Canaccord Genuity; Price Target: $0.55

• Suncorp Group (SUN)

  • Retained at neutral at Macquarie; Price Target: $17.00

• Westpac Banking Corporation (WBC)

  • Retained at sell at Citi; Price Target: $26.25 from $24.75

  • Retained at neutral at Jarden; Price Target: $30.00 from $29.20

  • Retained at underweight at JP Morgan; Price Target: $26.10 from $25.80

  • Retained at underperform at Macquarie; Price Target: $26.50 from $26.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $30.00 from $29.70

  • Retained at hold at Morgans; Price Target: $27.66 from $27.04

  • Retained at hold at Ord Minnett; Price Target: $27.00

  • Retained at neutral at UBS; Price Target: $33.00

• Woolworths Group (WOW)

  • Retained at hold at Morgans; Price Target: $31.60 from $35.95

• Xero (XRO)

  • Retained at buy at Goldman Sachs; Price Target: $201.00

Scans