Evening Wrap: ASX 200 dips despite Nasdaq success as tech rebound fails to balance weaker property, telco, and industrial shares

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Today marked the fifth down move for the S&P/ASX 200 out of the last seven. Australian stocks are performing a cautious descent from last Tuesday's all time high, not enough to spook investors – but also just enough to frustrate the pants off them!

Where's our Santa Claus Rally!? Keep your pants on, there's still plenty of December to go! 🎄

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, I have detailed technical analysis on the NASDAQ Composite and the Russell 2000 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 23.3 points lower at 8,330.3, 0.67% from its session high and just 0.04% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by 103 to 173 – not quite the 1 to 2 dismal performance we’ve seen over the last 3 trading sessions, but not far from it!

Today marked the fifth down move for the S&P/ASX 200 out of the last seven. The two ups in there were hardly that. Each day we’re seeing a different sector/group of sectors bearing the brunt of investor uncertainty (and probably a great deal of malaise).

The was a mini-sector rotation in there where the tables were turned on 2024’s best and worst. But that didn’t last long and there have been few clear driving themes one way or another.

In summary, it’s been a frustrating and tedious decline since last Tuesday’s record close of 8495.2.

Today’s best were sectors bouncing from recent sharp sell-offs, the “rotate-ees” let’s call them, in Information Technology (XIJ) (+0.40%) and Financials (XFJ) (+0.08%). Gains were modest, with mixed performances within each sector.

Take the XIJ for example, there were some great gains (e.g. Block (ASX: SQ2) (+4.4%), Megaport (ASX: MP1) (+3.0%), Appen (ASX: APX) (+2.7%)) versus some nasty falls (e.g. Audinate Group (ASX: AD8) (-2.9%), Iress (ASX: IRE) (-2.4%)).

Today's best performing stocks from the best performing ASX sectors

The “rotate-ors”, i.e., Energy (XEJ) (-0.04%) and Resources (XJR) (-0.26%) – this year’s lousiest sectors – were back in the losers list today. Everything else was a bit all over the place…particularly yesterday’s biggest gainer-now-today’s-biggest-loser in Real Estate Investment Trusts (XPJ) (-1.1%).

When will the apathy towards ASX stocks give way to a renaissance of the fabled Santa Claus Rally? If you're long NASDAQ stocks right now you wouldn't even be asking this question. It took out 20k for the first time last night and looks brilliant (as per ChartWatch below).

In my experience, the bull market usually finds a way, and it usually finds a way in December. So, buck up...that next big white candle is just around the corner! Ho ho ho! 🎅

Today's worst performing stocks from the worst performing ASX sectors

ChartWatch

NASDAQ Composite Index

Plenty to celebrate 🎉🎈

The last time we covered the Comp was in ChartWatch in the Evening Wrap on 2 December.

In that update, I noted:

I’m going to say this is a boring chart. Boring but…(sighs in trend follower admiration) beautiful. You know all of those “experts” who have complained this year about overvaluation in the stock market, about lost senses of investor reality, and of course about the inevitable day of impending reckoning: “This cannot possibly gooooo ooonnnn…!!!!” Well, you never heard it from me. All you’ve gotten from me in 2024 is the straight dope: Don’t fight the trend!

Today’s commentary is simple: Don’t fight the trend!

Russell 2000 Index (RUT)

That's not right....right? 🤔

The last time we covered the RUT was in ChartWatch in the Evening Wrap on Evening Wrap on 2 December.

In that update, I noted that things remained “very solid” here too.

But, unlike the COMP, since then, the RUT hasn’t soared to new highs. Instead, the heart of corporate America, the far more democratic US stock index (the RUT far less concentrated than the COMP when it comes to its top 10 constituents) suggests a modestly less rosy assessment of the strength of US stocks.

I trust you’ve already drawn a line between our recent lousy performance and the corresponding last few candles on this chart. It's no coincidence. This is the one we follow.

Still, the short term uptrend ribbon appears to be doing it’s job of providing dynamic demand support. The pullback from the major point of supply at the 2459 all time high is orderly and gradual. It’s not uncommon for long-standing all time highs to have such an influence on proceedings.

Whilst those last two weeks of candles are small, they are decisively supply-side in nature. So I suggest that while we’re going to continue to back the immaculate long term uptrend here, we’re going to be respectful of this “gentle” pullback – watching for price action and candles that might suggest it’s growing less so.

Ideally we don’t close below the short term uptrend ribbon, the bottom of which is presently tracking at approximately 2354. Even more ideally, tonight yields a great big long white candle with a close well into the critical 2442-67 supply zone.

One of those two scenarios is likely to happen. Nothing you do is going to change which it is. So, all we can do, all we can ever do as technical analysts, it await that next candle and all the information it conveys.

Economy

Today

• AUD Employment Change & Unemployment Rate November

  • Full-time employment increased by 52,600 while part-time employment decreased by 17,000 for a net gain of 35,600 jobs

  • This was substantially stronger than economists were predicting (+26,000 jobs), particularly given it was lead by a surge in full-time employment, and well ahead of October's 12,100 gain

  • Unemployment rate remained at 4.0%

  • Participation rate remained at 67.1%

  • Net result will be a paring back of RBA rate cut expectations, albeit a modest one in light of Tuesday's more dovish than expected Board meeting

Later this week

Friday

• 00:15 EUR ECB interest rate decision (3.15% forecast vs 3.40% previous)

• 00:30 USA Core PPI (+0.3% m/m forecast vs +0.2% m/m previous)

Latest News

Interesting Movers

Trading higher

• +11.1% Insignia Financial (IFL) - Change in substantial holding (increase), but unrelated to that news, there were media reports today (see the AFR) that private equity group Bain Capital is exploring a takeover of the company.

• +9.9% Beach Energy (BPT) - No news since 9-Dec Perth Basin Site Visit, but there were several broker updates today including Citi upgrading the stock to neutral from sell and raising its price target for the stock to $1.20 from $1.10.

• +6.2% Pacific Current Group (PAC) - Pacific Current Group Update on Proposed Buy-Back, rise is consistent with prevailing short and long term uptrends 🔎📈.

• +5.6% Immutep (IMM) - Immutep Reports Promising New Data in Head and Neck Cancer, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up 🔎📈.

• +4.8% Resolute Mining (RSG) - No news, has been extremely volatile since 11-Nov Company Statement regarding Mali.

• +4.4% Block (SQ2) - No news, tacked its US-listed counterpart as the NASDAQ Composite cracked 20k for the first time, rise is consistent with prevailing short and long term uptrends. A regular Feature chart in ChartWatch ASX Scans Uptrends list 🔎📈.

• +4.1% Vault Minerals (VAU) - No news, has perked up since this.

• +4.0% IPH (IPH) - Commencement of on-market share buy-back (they had to do something!) 🔎📉.

• +4.0% Pilbara Minerals (PLS) - Change of Director's Interest Notice (on market purchase for $1.1 million 💰). Go Dale! 💪 Why did he wait until the short sellers (who were supposed to cop it!) were largely out the door!? 🤔 Is this the big sign PLS shareholders and the market was waiting for!!!??

• +3.8% HMC Capital (HMC) - Change in substantial holding for LIC.

Trading lower

• -28.3% Syrah Resources (SYR) - Balama force majeure (it was just starting to look half-decent again yesterday! 🤦).

• -22.6% Ventia Services Group (VNT) - ACCC proceedings against Ventia, fall is consistent with prevailing short term downtrend, closed below long term uptrend ribbon 🔎📉.

• -12.0% Clarity Pharmaceuticals (CU6) - No news, it's being added to the S&P/ASX 200 on 23-Dec…does this mean more attention from short sellers!? I ran this in ChartWatch ASX Scans Downtrends list based on 9-Dec and 11-Dec candles 🔎📈.

• -10.7% Peter Warren Automotive (PWR) - Trading Update, fall is consistent with prevailing short and long term downtrends 🔎📈.

• -7.1% Alpha HPA (A4N) - Alpha Sapphire Update, closed below long term downtrend ribbon 🔎📉.

• -6.4% Firefly Metals (FFM) - No news since yesterday's FireFly to dual list on Toronto Exchange.

• -6.0% Downer EDI (DOW) - Spotless to defend ACCC legal proceedings.

• -5.8% 29METALS (29M) - Continued negative response to 3-Dec Gossan Valley Investment Decision, fall is consistent with prevailing short and long term downtrends, watch out for this one in tomorrow's ChartWatch ASX Scans Downtrends list 🔎📈.

Broker Notes

• 29METALS (29M)

  • Retained at sell at Citi; Price Target: $0.25

• Alpha HPA (A4N)

  • Retained at outperform at Macquarie; Price Target: $1.43 from $1.40

• BHP Group (BHP)

  • Retained at buy at Citi; Price Target: $46.00

• Beach Energy (BPT)

  • Upgraded to neutral from sell at Citi; Price Target: $1.20 from $1.10

  • Retained at buy at Ord Minnett; Price Target: $1.80 from $1.65

• Champion Iron (CIA)

  • Retained at buy at Bell Potter; Price Target: $7.10

  • Retained at buy at Citi; Price Target: $7.40 from $6.80

• Capstone Copper Corp. (CSC)

  • Initiated at buy at Citi; Price Target: $13.60

• Deterra Royalties (DRR)

  • Retained at neutral at Citi; Price Target: $4.20 from $4.10

• Endeavour Group (EDV)

  • Retained at buy at Goldman Sachs; Price Target: $5.50

• Fortescue (FMG)

  • Retained at neutral at Citi; Price Target: $21.00 from $19.40

• Helloworld Travel (HLO)

  • Retained at buy at Shaw and Partners; Price Target: $3.50

• HMC Capital (HMC)

  • Retained at equal-weight at Morgan Stanley; Price Target: $12.98 from $10.35

• Iluka Resources (ILU)

  • Retained at outperform at Macquarie; Price Target: $7.10

  • Retained at buy at Ord Minnett; Price Target: $6.00 from $6.30

• Arcadium Lithium (LTM)

  • Retained at neutral at Macquarie; Price Target: $8.70

• Liontown Resources (LTR)

  • Retained at buy at Bell Potter; Price Target: $1.40

• Mirvac Group (MGR)

  • Retained at neutral at Citi; Price Target: $2.20 from $2.25

• Medibank Private (MPL)

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.80

• National Australia Bank (NAB)

  • Retained at overweight at Morgan Stanley; Price Target: $38.40

• New Hope Corporation (NHC)

  • Upgraded to buy from neutral at Citi; Price Target: $5.50 from $5.00

  • Retained at sell at Goldman Sachs; Price Target: $3.90 from $4.30

• NIB (NHF)

  • Retained at equal-weight at Morgan Stanley; Price Target: $6.20

• Pro Medicus (PME)

  • Retained at buy at Goldman Sachs; Price Target: $278.00 from $221.00

• Retail Food Group (RFG)

  • Retained at buy at Shaw and Partners; Price Target: $4.00

• Rio Tinto (RIO)

  • Retained at neutral at Citi; Price Target: $123.00 from $134.00

• South32 (S32)

  • Downgraded to neutral from buy at Citi; Price Target: $3.90

• Sandfire Resources (SFR)

  • Retained at neutral at Citi; Price Target: $10.50

• Stockland (SGP)

  • Retained at buy at Citi; Price Target: $5.80 from $6.00

• Stanmore Resources (SMR)

  • Retained at buy at Citi; Price Target: $3.40

• Southern Cross Electrical Engineering (SXE)

  • Retained at buy at Shaw and Partners; Price Target: $2.10

• Sayona Mining (SYA)

  • Retained at outperform at Macquarie; Price Target: $0.04

• Titomic (TTT)

  • Retained at buy at Shaw and Partners; Price Target: $0.30

• Viva Leisure (VVA)

  • Retained at buy at Ord Minnett; Price Target: $2.90 from $3.20

• Whitehaven Coal (WHC)

  • Retained at buy at Citi; Price Target: $8.30 from $8.00

Scans