Evening Wrap: ASX 200 holds breath ahead of Fed meeting, as health, tech and property stocks firm on rate cut expectations

The S&P/ASX 200 closed 4.6 points lower, down 0.06%.

It was another slowish trading session today as we grind closer to the Christmas-New Year break. Fund managers are jostling for their desired positions ahead of the half-year close. Trim this, add that...

Today they trimmed Financials, Consumer, and Gold stocks, and added Health Care, Utilities, Technology and Property stocks – the latter being the so called group of "interest rate sensitives".

And that could be a very good sign ahead of a critical Federal Reserve meeting in the USA tonight. Most economists are predicting a 0.25% cut in the Fed's official cash rate.

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 Crude Oil and Thermal Coal in today's ChartWatch.

Before we get into it – The ASX 200 has climbed 15% this year to ~8,500. Will it hit +9500 by the end of 2025? Have your say and be the first to get top picks, prediction, and exclusive expert insights for 2025. Complete Outlook Series Survey Now!

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 4.6 points lower at 8,309.4, 0.40% from its session high and just 0.16% from its low. Reflecting the dour headline performance of the benchmark, in the broader-based S&P/ASX 300 (XKO), advancers only just pipped decliners by 141 to 136.

It was another slowish trading session today as we grind closer to the Christmas-New Year break. Fund managers are jostling for their desired positions ahead of the half-year close. Trim this, add that...

Today they trimmed Financials (XFJ) (-0.58%), Consumer (Discretionary (XDJ) (-0.30%) and Staples (XSJ) (-0.14%)), and Gold (XGD) (-0.20%).

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

They added Health Care (XHJ) (+0.69%), Utilities (XUJ) (+0.44%), Technology (Technology (XIJ) (+0.30%) and Communication Services (XTJ) (+0.36%)), and Real Estate Investment Trusts (XPJ) (+0.43%) – i.e., the so called group of "interest rate sensitives".

I also note that for the second day straight – a particularly rare occurrence – the broad-thematic-based Industrials (XNJ) (+0.78%) sector was the top performer among the major ASX sector indices.

It wasn't a terrible day, it just wasn't the follow through day we were hoping for after yesterday's nice pop...😢

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

ChartWatch

Brent Crude Oil Futures (Front month, back-adjusted) ICE

Stuck in the middle with crude...🎵🎶 (click here for full size image)

The last time we covered Brent crude was in ChartWatch in the Evening Wrap on 19 November.

In that update, nearly a month ago now, I noted: “There’s still nothing here for a trend follower”.

Guess what?

Yep, still nothing! Which is kinda why I haven’t covered it more often: No trend = no interest. That’s a great adage to stick in your Trading Adage Toolkit.

I did, however, want to cover off on a couple of energy commodities today given just how terrible the local XEJ has been lately – and indeed all year. I covered uranium for you in yesterday’s Evening Wrap – it’s trend is far clearer (to the downside).

The woes in the XEJ aren’t so much coming from this one, although in an environment that's so decidedly neutral – it’s going to be impossible to generate the FOMO required to drive a commodity to new highs. Without that possibility, there is also very little reason to FOMO into XEJ oil stocks...

And I suggest it’s most likely going to remain that way (in the absence of any major news event that could break Brent out of what is becoming one of the best-entrenched trading ranges in recent memory).

A close above 75.70 would be interesting, but then likely well-capped by 78.83-80.27 (and beyond that, by 84.61-86.62).

Alternatively, a close below 69.05 would be interesting, but then likely well-supported by 64.77-67.10.

It's ranges within ranges within ranges...like that Leonardo DiCaprio movie...you know the one...it went on forever...

Like Brent's trading range. 😴💤

The long term downtrend ribbon is likely to be less influential in defining trend here – as in if we can close above and hold it – probably not such a big deal as it would be in other situations…Still, it would be a modest positive if this were to occur.

Newcastle Coal Futures (Front month, back-adjusted) ICE

You just don't mess with the long term downtrend ribbon...🪦 (click here for full size image)

The last time we covered thermal coal was in ChartWatch in the Evening Wrap on 28 November.

In that update, I noted the same short term and long term downtrends and falling peaks and falling troughs you can see have persisted above.

I also suggested the thermal coal price would probe 129.50. It did, and so far, it's bouncing from there (it is a point of demand after all!)

I have no reason to believe this bounce will last very long, though, nor that the downtrends will prevail once again. If they do, then a close below 129.50 would set thermal coal up for a probe of the historical point of demand at 116.10.

129.50 is a critical level. It’s the 2024 low. It’s where demand came in to trigger a enough of a rally to last the better part of 11 months. If it goes, the angle of attack of the short term trend could steepen.

Do I even bother with potential upside scenarios here? Yes, I should – because no matter how well entrenched a trend is – the future is unknown. Anything can happen.

So, in this case, consider a close back above 138.50 as a signal the demand-side is again working strongly back into the market. Ideally, this is accompanied by a return to rising peaks and rising troughs (a sign of supply removal and demand reinforcement).

This is yet another poor indictment of the XEJ's chances going forward...

Economy

Today

• There weren't any major data releases in our time zone today

Later this week

Thursday

• 06:00 US Federal Reserve FOMC meeting (-0.25% to 4.50% forecast)

  • Plus FOMC Economic Projections

  • Plus FOMC / Chairman Jerome Powell press conference (06:30)

• TBA JPN Bank of Japan (BOJ) Policy Rate (no change at <0.25% forecast)

  • Plus BOJ Governor Kazuo Ueda press conference

• UK Bank of England MPC Official Bank Rate (no change at 4.75% forecast)

Friday

• 00:30 USA Final GDP September Qtr (+2.8% forecast vs +2.8% June Qtr)

• 02:00 USA Existing Home Sales November (4.11 million forecast vs 3.96 million in October)

• 12:15 CHN 1-yr & 5-yr Prime Rate (no change at 3.1% and 3.6% respectively)

Saturday

• 00:30 Core PCE Price Index November (+0.2% m/m and 2.9% p.a. forecast vs +0.3% m/m and 2.8% p.a. in October)

• 00:30 Personal Income & Personal Spending November (+0.2% m/m and +0.4% m/m in October & +0.5% m/m and +0.4% m/m in October respectively)

Latest News

Interesting Movers

Trading higher

• +50.3% Omni Bridgeway (OBL) - Secondary market transaction - Continuation Fund (selling bits of its bits!)

• +12.2% Cromwell Property Group (CMW) - Change of Director's Interest Notice - JP Callaghan (acquired some performance rights for nil cost - I don't think that's it, but there's not much else to explain the bounce here!)

• +12.1% Clarity Pharmaceuticals (CU6) - Novel FAP-targeted radiopharmaceutical, also initiated at buy at Canaccord Genuity with a price target of $8.06

• +9.1% Kogan.Com (KGN) - No news, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +8.1% Platinum Asset Management (PTM) - No news, rally after a massive fall following 9-Dec End of Regal discussions, special dividend & turnaround

• +7.2% Zip Co. (ZIP) - No news, rise is consistent with prevailing long term uptrend 🔎📈

• +6.4% Resolute Mining (RSG) - No news, consistent with massive volatility since 11-Nov Company Statement regarding Mali

• +5.8% Megaport (MP1) - No news, certainly enough to get it out of ChartWatch Scans Downtrends list contention…needs to deal with the long term downtrend ribbon next 🧐

• +5.5% Cobram Estate Olives (CBO) - No news, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +4.1% Droneshield (DRO) - Appointment of Joint Company Secretary

• +3.7% Siteminder (SDR) - Retirement of Les Szekely as Non-Executive Director

• +3.3% Redox (RDX) - No news, initiated at overweight at Morgan Stanley with a price target: $4.50

Trading lower

• -7.9% Credit Corp Group (CCP) - No news…possibly some positioning ahead of Fed interest rate meeting tonight…sometimes there's just no explanation (apart from more supply than demand!), fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down 🔎📉

• -7.4% Sayona Mining (SYA) - Change of Director's Interest Notice (on market purchase of 2.5 million shares for a consideration of $75,000) - But that's probably not the explanation for the big sell-off today! More likely, fall is consistent with prevailing short and long term downtrends, one of the most Featured stocks in ChartWatch ASX Scans Downtrends list this year! 🔎📉

• -4.3% Coronado Global Resources (CRN) - No news, weaker coal prices (see ChartWatch section above), regardless...fall is consistent with prevailing short and long term downtrends, one of the most Featured stocks in ChartWatch ASX Scans Downtrends list this year! 🔎📉

• -4.2% Insignia Financial (IFL) - IFL Rejects Indicative Non-binding Proposal

• -3.5% Nickel Industries (NIC) - No news, sharp fall in nickel price on London Metals Exchange Tuesday, fall is consistent with prevailing short term downtrend, closed below long term trend ribbon 🔎📉

• -3.3% Emerald Resources (EMR) - No news, fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down 🔎📉

• -3.1% Piedmont Lithium (PLL) - No news, fall is consistent with prevailing short term downtrend, fall is consistent with prevailing short and long term downtrends, one of the most Featured stocks in ChartWatch ASX Scans Downtrends list this year! 🔎📉

• -3.0% Metals Acquisition (MAC) - Sprott Amend Loan Agreement, also lower copper price on the London Metals Exchange Tuesday

Broker Notes

• Alpha HPA (A4N)

  • Retained at buy at Bell Potter; Price Target: $2.00

• Austin Engineering (ANG)

  • Retained at buy at Shaw and Partners; Price Target: $0.70

• APA Group (APA)

  • Retained at outperform at Macquarie; Price Target: $8.02 from $8.13

  • Retained at equal-weight at Morgan Stanley; Price Target: $8.58

  • Retained at hold at Morgans; Price Target: $7.13 from $7.66

• Bluescope Steel (BSL)

  • Retained at neutral at Citi; Price Target: $21.00 from $21.50

• Clarity Pharmaceuticals (CU6)

  • Initiated at buy at Canaccord Genuity; Price Target: $8.06

• Imdex (IMD)

  • Retained at sell at Citi; Price Target: $1.95

• Karoon Energy (KAR)

  • Retained at buy at Citi; Price Target: $2.00 from $2.20

  • Retained at outperform at Macquarie; Price Target: $2.00 from $2.15

  • Retained at buy at Ord Minnett; Price Target: $2.40

• Meeka Metals (MEK)

  • Retained at buy at Morgans; Price Target: $0.23 from $0.18

• Monadelphous Group (MND)

  • Retained at buy at Citi; Price Target: $16.20

• NRW (NWH)

  • Retained at buy at Citi; Price Target: $4.05

• Redox (RDX)

  • Initiated at overweight at Morgan Stanley; Price Target: $4.50

• Sigma Healthcare (SIG)

  • Upgraded to add from hold at Morgans; Price Target: $2.98 from $2.21

• Syntara (SNT)

  • Retained at buy at Bell Potter; Price Target: $0.12 from $0.10

• SRG Global (SRG)

  • Downgraded to accumulate from buy at Ord Minnett; Price Target: $1.32 from $1.13

Scans