Market Wraps

Morning Wrap: ASX 200 to fall, S&P 500 slips + Ramsay Health Care, Karoon results

Thu 29 Feb 24, 8:39am (AEST)

ASX 200 futures are trading 3 points lower, down 0.04% as of 8:30 am AEDT.

Major US benchmarks pulled back slightly as the market awaits PCE inflation data – Otherwise known as the Fed's preferred inflation measure, Bitcoin briefly hits US$60,000, Klarna eyes an IPO as soon as Q3, US GDP rose slightly less than expected in Q4 and the last day of February reporting season!

Let's dive in.

Overnight Summary

Thu 29 Feb 24, 8:27am (AEST)

Name Value % Chg
Major Indices
S&P 500 5,070 -0.17%
Dow Jones 38,949 -0.06%
NASDAQ Comp 15,948 -0.55%
Russell 2000 2,040 -0.77%
Country Indices
Canada 21,244 -0.35%
China 2,958 -1.91%
Germany 17,601 +0.25%
Hong Kong 16,537 -1.51%
India 72,305 -1.08%
Japan 39,208 -0.08%
United Kingdom 7,625 -0.76%
Name Value % Chg
Commodities (USD)
Gold 2,043.0 +0.19%
Iron Ore 125.84 -0.21%
Copper 3.825 -0.16%
WTI Oil 78.38 -0.41%
Currency
AUD/USD 0.6496 -0.73%
Cryptocurrency
Bitcoin (AUD) 92,488 +5.67%
Ethereum (AUD) 5,061 +1.12%
Miscellaneous
US 10 Yr T-bond 4.274 -0.95%
VIX 13.69 +1.94%

US Sectors

Thu 29 Feb 24, 8:27am (AEST)

SECTOR % CHG
Real Estate +1.28%
Financials +0.35%
Consumer Discretionary +0.32%
Utilities +0.30%
Industrials +0.30%
Materials +0.22%
SECTOR % CHG
Consumer Staples +0.09%
Energy -0.20%
Health Care -0.51%
Information Technology -0.55%
Communication Services -0.92%

S&P 500 SESSION CHART

S&P 500 intraday
S&P 500 lower in relatively uneventful trade (Source: TradingView)

ASX TODAY

  • ASX 200 to slip after a slightly weak lead from Wall Street and continued weakness across key commodities (namely iron ore)

  • February reporting season is coming to an end – Companies reporting today include Atlas Arteria, Karoon Energy, Ramsay Health Care, Southern Cross Media, Cromwell Property and more

  • European Lithium and Sizzle Corp to merge to create Critical Metals Corp (8-K Filing)

  • Flight Centre upgraded to Buy from Overweight at Jarden and target increased to $23.50 from $22.00

  • Genesis Minerals initiated Neutral at UBS with $1.75 target

  • Kelsian Group upgraded to Buy from Outperform at CLSA but target decreased to $7.0 from $7.50 due to valuation

  • Johns Lyng Group downgraded to Outperform from Buy at CLSA and target cut to $7.20 from $7.25

  • Worley upgraded to Neutral from Underweight at JPMorgan and target increased to $15.35 from $13.50

OVERNIGHT MARKETS

  • S&P 500 slightly lower, off worst levels amid relatively uneventful trade

  • Small-cap Russell 2000 lagged (-0.77% vs. S&P -0.17%) after Tue-Wed outperformance

  • Equal-weight S&P 500 was little changed reflecting strength across ex-tech/resources

  • A quiet session with no major drivers behind the slight weakness – Current market themes including the hawkish repricing of Fed rate cut expectations, stretched positioning and potential month-end selling from pension funds

  • Bitcoin briefly climbs above US$60,000, nearing 2021 record high (FT)

INTERNATIONAL STOCKS

  • EU set to fine Apple ~€500M (US$543m) next week over Spotify streaming case (Reuters)

  • eBay beats earnings estimates on strong US holiday spending (Reuters)

  • Klarna working on IPO as soon as Q3, seeking US$20bn valuation (Bloomberg)

  • Meta to release AI language model Llama 3 in July (Reuters)

  • Stripe tender offer values company at US$65bn, up 30% from a year ago but down from US$95bn in 2021 (FT)

  • Toyota gives no answer to union demands at second round of wage talks (Reuters)

  • Beyond Meat shares soar more than 40% on revenue beat (CNBC)

  • Country Garden received winding-up petition in Hong Kong (Bloomberg)

CENTRAL BANKS

  • Risk of rising inflation prompting out-of-the-box thinking at the Fed (Reuters)

  • ECB awaiting data before starting to cut interest rates (Reuters)

  • RBNZ issues dovish hold, dials back hawkish bias (Reuters)

GEOPOLITICS

  • Leaked Russian military documents reveal Russia has simulated the use of tactical nuclear weapons in hypothetical conflict with China (FT)

  • French President Macron breaks taboo of suggesting potential "boots on the ground" in Ukraine, triggering pushback from EU allies (Telegraph)

  • Hamas plays down suggestions an agreement on cease-fire is near (NY Times)

  • Hezbollah and Houthis signal they will halt attacks if Gaza truce reached (Reuters)

ECONOMY

  • US GDP rose 3.2% in Q4, slightly below consensus expectations (Reuters)

  • Australian monthly inflation unchanged near two-year low (Reuters)

  • China vows to break down barriers to aid economic recovery but call continues for stronger stimulus (SCMP)

Industry ETFs

Thu 29 Feb 24, 8:27am (AEST)

Name Value % Chg
Commodities
Strategic Metals 50.745 +2.12%
Lithium & Battery Tech 44.47 +0.50%
Silver 20.55 -0.10%
Gold Miners 25.79 -0.92%
Steel 70.38 -1.21%
Uranium 27.515 -1.77%
Copper Miners 35.58 -1.82%
Industrials
Aerospace & Defense 128.17 +1.42%
Construction 68.31 +0.06%
Global Jets 20.115 -0.47%
Agriculture 22.17 -1.20%
Healthcare
Cannabis 5.15 +0.78%
Biotechnology 139.42 -1.04%
Name Value % Chg
Cryptocurrency
Bitcoin 28.47 +5.72%
Renewables
CleanTech 8.88 -0.22%
Hydrogen 5.43 -1.09%
Solar 42.03 -1.25%
Technology
E-commerce 22.73 -0.09%
Sports Betting/Gaming 17.751 -0.16%
Cybersecurity 30.2 -0.40%
Electric Vehicles 23.79 -0.50%
FinTech 26.35 -0.53%
Cloud Computing 21.72 -0.55%
Robotics & AI 30.81 -1.06%
Semiconductor 634.89 -1.12%
Video Games/eSports 60.83 -1.23%

Australian Inflation Holds at Two Year Lows

Australian consumer price inflation unexpectedly held at a two-year low of 3.4% in January despite expectations of an uptick to 3.6%.

According to the ABS, the most significant contributors to the January annual increase were:

  • Housing (+4.6%)

  • Food and non-alcoholic beverages (+4.4%)

  • Alcohol and tobacco (+6.7%)

  • Insurance and financial services (+8.2%)

  • This was partially offset by declines in recreation and culture (-1.7%) due to declines in holiday travel and accommodation sub segments.

Some other interesting movers in the inflation report include:

  • Housing rose 4.6% year-on-year in January, down from 5.2% in December

  • New dwelling prices rose 4.8% as builders passed through higher costs

  • Rents rose 7.4% reflecting a tight rental market and low vacancy rates

  • Annual electricity prices rose 0.8% (Energy Bill Relief Fund rebates rolled out in July 2023, excluding the rebate, prices would have increased 15.3% in January)

  • Food and non-alcoholic beverages rose 4.4%, up from 4.0% in December

As far as the ASX 200 is concerned – Things were all over the place. A brief 0.12% rally as the data came out followed by a sharp move down by 11:55 am and an equally sharp rally by 12:30 pm. The ASX 200 finished the session -0.03% lower.

XJO 2024-02-29 07-59-20
ASX 200 intraday chart for Wednesday, 28 February (Source: TradingView)

Key Events

ASX corporate actions occurring today:

  • Trading ex-div: Ebos (EBO) – $0.47, Corporate Travel (CTD) – $0.17, Pengana International (PIA) – $0.014, Ventia Services (VNT) – $0.094, Beacon Lighting (BLX) – $0.041, Gold Road Resources (GOR) – $0.01, Jumbo Interactive (JIN) – $0.27, Capral (CAA) – $0.35, Pro Medicus (PME) – $0.018, Vulcan Steel (VSL) – $0.112, Suncorp (SUN) – $0.34, Dalrymple Bay Infrastructure (DBI) – $0.05, Shape Australia (SHA) – $0.08, Medibank (MPL) – $0.07, Integral Diagnostics (IDX) – $0.025, AUB Group (AUB) – $0.20, Arn Media (A1N) – $0.036

  • Dividends paid: Cryosite (CTE) – $0.05, Aspen Group (APZ) – $0.0425, Abacus Group (ABG) – $0.0425, Stockland (SGP) – $0.08, Charter Hall (CGC) – $0.22, Growthpoint Properties (GOZ) – $0.09, GPT (GPT) – $0.125, Dexus (DXS) – $0.125, Charter Hall Retail REIT (CQR) – $0.123, Mirvac (MGR) – $0.045, Scentre Group (SCG) – $0.08, Abacus Storage King (ASK) – $0.03 

  • Listing: None

Economic calendar (AEDT):

  • 11:30 am: Australian Housing Credit (Jan)

  • 11:30 am: Australian Retail Sales (Jan)

  • 6:45 pm: France Inflation (Feb)

  • 11:00 pm: India GDP (Q4)

  • 12:00 am: Germany Inflation (Feb)

  • 12:30 am: Canada GDP (Q4)

  • 12:30 am: US Core PCE (Jan)

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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