Evening Wrap: Did the ASX 200 just restart the Santa Claus rally?

We may look back at this trading session in a few weeks and say: "That was the turning point". Today was a modest, but decisive swing back to the demand-side, with a broad-based move higher. Tech and Financials were the major winners as Origin was again the main culprit behind another loss in Utilities.

Let's dive in.

Markets

ASX 200 Session Chart

Stuck in the middle, lackluster S&P/ASX 200 price action today (Source: Market Index)

The S&P/ASX200 (XJO) finished 52.0 points higher at 7,087.3, smack-bang on its session high. When a stock or index closes on its high, it speaks of unfulfilled excess demand in the system. This bodes well for the next trading session. Confirming this bullish bias, advancers beat decliners by 193 to 75 in the broader-based S&P/ASX 300 (XKO).

Information Technology (XIJ) +1.3%, Financials (XFJ) +1.2%, and Consumer Staples (XSJ) +1.2% were the best performing sectors today, but as suggested by the advance/decline line, gains were broad-based.

Tech and financial companies are major beneficiaries of the continued decline in local and overseas long term bond yields, but all boats are likely to be lifted by this rising (on declining yields!) tide. Indeed, I like the look of the S&P/ASX 200 chart here.

The two key levels for the S&P/ASX 200 is 6985 and 7126

I reckon, as long as we don't close below 6,985 we're going to be OK. I'm even prepared to go further out on my limb and suggest that if we can close above 7,126, we could all be very pleasantly surprised by what the local bourse could do by the end of this year.

Tech shares love it when long term bond yields fall

Doing it tough again today was the Utilities (XUJ) -1.0%, which feels like a perennial loser in our Evening Wrap. The main driver here was a 1.9% fall in Origin Energy (ASX: ORG) after the Origin board rejected Brookfield and EIG's 'Plan B' takeover offer.

Economy

Manufacturing and Services sectors Purchasing Managers Index data released today showed China's economy remains under immense pressure with the second straight month of contraction in Manufacturing.

The Manufacturing PMI was 49.4 for November, down from October's 49.5, and below the key 50 mark which delineates contraction from expansion. Economists had forecast 49.8.

China Non-Manufacturing PMI trend. Source: Forex Factory

The Non-Manufacturing PMI, which represents services businesses, managed to eke out some growth in November at 50.2, but this was down from October's 50.6 and well below economists forecast of 50.9.

What to watch out for...

It's a data deluge tonight! The big one is undoubtedly the USA Core PCE Price Index at 12:30am AEDT, i.e., the Federal Reserve's preferred measure of inflation. Economists are expecting price rises in the US economy to moderate to +0.2% in October for an annualised gain of 3.5% p.a. versus September's +0.3% and 3.7% p.a.

Also watch out for USA Weekly Unemployment Claims (consensus: 219,000, previous: 209,000), Personal Incomes (consensus +0.2%, previous +0.3%) and Personal Spending (consensus +0.2%, previous +0.7%) all due at 12:30am AEDT.

Interesting news and movers

Trading higher

• +14.9% Iress (IRE) - Strategy Update Presentation

• +9.9% Temple & Webster Group (TPW) - No news since 29-Nov 2023 AGM Presentation

• +6.6% Zip Co. (ZIP) - No news

• +4.8% Imugene (IMU) - AGM Presentation

• +4.7% Codan (CDA) - No news since 29-Nov Acquisition Announcement

• +4.6% Imdex (IMD) - Appendix 3B & CEO Share Activity Update

• +4.6% Mirvac Group (MGR) - Strong property sector on declining long term bond yields

• +4.5% Harvey Norman Holdings (HVN) - No news since 29-Nov Trading Update

• +4.4% Vicinity Centres (VCX) - Strong property sector on declining long term bond yields

• +4.2% Telix Pharmaceuticals (TLX) - No news

• +4.2% Skycity Entertainment Group (SKC) - Auckland Car Park Concession Agreement High Court Judgment

Trading lower

• -10.4% Cettire (CTT) - Change in substantial holding

• -8.9% Arafura Rare Earths (ARU) - No News

• -8.8% Ioneer (INR) - Weaker lithium sector as lithium minerals prices continue to fall

• -6.4% Healthco Healthcare and Wellness Reit (HCW) - No News

• -6.3% Vulcan Energy Resources (VUL) - Weaker lithium sector as lithium minerals prices continue to fall

• -5.5% Omni Bridgeway US Prohibited (OBL) - No News

• -4.3% Brainchip Holdings (BRN) - No News

• -3.8% Judo Capital Holdings (JDO) - No News

• -3.4% Core Lithium (CXO) - Weaker lithium sector as lithium minerals prices continue to fall

Broker notes

• ANZ Group Holdings (ANZ) retained at neutral UBS; Price Target: $25.00

• AUB Group (AUB) initiated buy at Ord Minnett; Price Target: $32.20

• Bendigo and Adelaide Bank (BEN) retained at sell UBS; Price Target: $9.17

• Bank of Queensland (BOQ) retained at sell UBS; Price Target: $5.00

• Breville Group (BRG) retained at neutral Macquarie; Price Target: $25.30

• Bluescope Steel (BSL) retained at buy UBS; Price Target: $24.00 from $19.90

• Commonwealth Bank of Australia (CBA) retained at neutral UBS; Price Target: $105.00

• Codan (CDA) retained at outperform Macquarie; Price Target: $9.10 from $8.48

• Core Lithium (CXO) downgraded to sell from neutral at Citi; Price Target: $0.29 from $0.38

• Harvey Norman Holdings (HVN) retained at neutral UBS; Price Target: $3.73

• Macquarie Group (MQG) retained at buy UBS; Price Target: $185.00

• MMA Offshore (MRM) initiated buy at Shaw and Partners; Price Target: $2.30

• National Australia Bank (NAB) retained at sell UBS; Price Target: $26.00

• Temple & Webster Group (TPW) upgraded to buy from overweight at Jarden; Price Target: $8.56 from $6.59

• Westpac Banking Corporation (WBC) retained at sell UBS; Price Target: $21.00 from $20.00

Scans