Market Wraps

Morning Wrap: ASX set to tumble as Dow plunges 1,123 points; Bain eyes higher offer for Insignia; Macquarie considers $5 billion asset sale

Thu 19 Dec 24, 8:43am (AEDT)

ASX 200 futures trading up 6 points, or (+0.07%), to 8,203, as of 8:30AM

The Morning Wrap will be finishing up next Tuesday 24 December 2024. It will return on Monday 6 January 2025.

The ASX is expected to fall after a sharp drop in US markets, driven by the Federal Reserve's forward guidance following a 0.25% rate cut. The Fed now projects rate reductions of only 50 basis points in 2025, down from its earlier forecast of 1%.

Macquarie Group is reportedly exploring a $5 billion sale of its US telco, Altafiber, as larger American carriers target fiber-optic assets to expand beyond wireless services and address surging data demands.

Insignia Financial will draw attention today, with reports indicating Bain Capital may raise its bid to $4.20–$4.30 per share after its initial $4 offer was rejected. Major shareholder Tanarra Capital, holding 14%, backs Bain’s $2.7 billion proposal.

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Overnight Summary

Thu 19 Dec 24, 9:42am (AEDT)

Name Value % Chg
Major Indices
S&P 500 5,872 -2.95%
Dow Jones 42,327 -2.58%
NASDAQ Comp 19,393 -3.56%
Russell 2000 2,233 -4.33%
Country Indices
Canada 24,557 -2.24%
China 3,382 +0.62%
Germany 20,243 -0.02%
Hong Kong 19,865 +0.83%
India 80,182 -0.62%
Japan 39,082 -0.72%
United Kingdom 8,199 +0.05%
Name Value % Chg
Commodities (USD)
Gold 2,608.1001 -1.99%
Iron Ore 105.58 +0.16%
Copper 4.1035 -0.99%
WTI Oil 69.99 -0.24%
Currency
AUD/USD 0.6229 -1.64%
Cryptocurrency
Bitcoin (USD) 100,976 -5.27%
Ethereum (AUD) 5,937 -5.91%
Miscellaneous
US 10 Yr T-bond 4.494 +2.49%
VIX 22.88 +44.54%

US Sectors

Thu 19 Dec 24, 9:42am (AEDT)

SECTOR % CHG
Health Care -1.38%
Consumer Staples -1.44%
Utilities -2.39%
Energy -2.61%
Industrials -2.82%
Materials -2.89%
SECTOR % CHG
Information Technology -2.99%
Financials -3.03%
Communication Services -3.16%
Real Estate -3.97%
Consumer Discretionary -4.74%

S&P 500 SESSION CHART

SPX Wed 18 Dec 2024
The S&P 500 was in a holding pattern and then declined 2.95% after the Fed provided guidance that dissapointed markets (Source: TradingView)

OVERNIGHT MARKETS

  • US equities were lower in Wednesday trading as stocks ended near worst levels following the FOMC decision. S&P 500 posted worst session since early August (yen/VIX event), Nasdaq worst since early August, Russell 200 worst since Jun-22. Dow Jones posted 10th straight decline, longest since 1974.

  • All sectors lower, though Big tech a key drag; NVDA not as bad but TSLA today's big decliner. EVs, REITs, Regional banks, credit cards, life insurance, PE, precious metals, toys, restaurants, software, capital goods, trucking, food, pharma, biotech, E&Ps among worst performers.

  • Fed dials back rate cut expectations for 2025, market now pricing in two 25bp cuts (from four 25bp cuts). Chair Powell said slower pace of rate cuts reflects expectations of higher inflation, though also noted inflation story still "broadly on track." Also emphasised Fed can be more cautious in reducing rates amid economic strength.

  • US Treasuries under pressure with curve bear flattening; 2Y back above 4.35%, highest since late November.

  • US Dollar index up up 1.1% as greenback proves defensive amid market volatility.

  • Gold finished down 0.3%.

  • Bitcoin futures down 5%.

  • WTI crude settled up 0.1%

STOCKS

  • Honda and Nissan will reportedly begin merger talks on Monday of next week (Nikkei)

  • Amazon postpones return to office mandate for thousands due to lack of space (Bloomberg)

  • Barclays to increase annual bonuses by as much as 20% for traders and bankers (Bloomberg)

  • Merck purchases rights to experimental weight loss pill from Chinese drugmaker in up to $2B deal (CNBC)

  • AMD invests in cloud provider Vultr at a $3.5B valuation (CNBC)

  • Microsoft exec sees broad potential for generative AI, though says core pieces missing in the tech (FT)

  • Apple halts work on a project to build an iPhone hardware subscription service (Bloomberg)

MARKETS

  • Treasuries slide and US dollar jumps to highest since 2022 on more hawkish than expected Fed SEP (Bloomberg)

  • BofA says sharp inflow into US equities may be sign to sell global equities (Bloomberg)

ECONOMY

  • Commercial real estate facing 2025 headwinds as high rates make refinancing increasingly difficult (Bloomberg)

  • Analysts expect US new auto sales to achieve best growth next year since 2019 (CNBC)

Industry ETFs

Thu 19 Dec 24, 9:44am (AEDT)

Name Value % Chg
Commodities
Strategic Metals 40.56 -3.04%
Uranium 27.75 -3.34%
Silver 26.85 -3.45%
Lithium & Battery Tech 41.93 -3.50%
Steel 61.535 -3.52%
Copper Miners 38.09 -4.20%
Gold Miners 34.5204 -4.61%
Industrials
Agriculture 27.825 +0.42%
Global Jets 24.37 -2.71%
Aerospace & Defense 142.92 -3.34%
Construction 76.945 -4.03%
Healthcare
Biotechnology 132.32 -3.88%
Name Value % Chg
Cryptocurrency
Bitcoin 25.82 -5.84%
Renewables
CleanTech 6.86 -2.70%
Solar 33.45 -3.41%
Hydrogen 23.29 -4.20%
Technology
Electric Vehicles 23.06 -3.15%
Robotics & AI 32.06 -3.20%
Semiconductor 215.59 -3.70%
E-commerce 28.48 -3.72%
Video Games/eSports 83.18 -4.09%
Sports Betting/Gaming 19.11 -4.11%
Cloud Computing 24.24 -4.49%
FinTech 31.97 -4.82%
Cybersecurity 32.22 -4.90%

BROKER MOVES

  • Morgans upgrades Sigma Healthcare (ASX: SIG) to ADD with $2.98 price target (from $2.21)

  • Morgans downgrades Percheron Therapeutics to REDUCE with $0.01 price target (from $0.24)

  • Canaccord Genuity initiates Clarity Pharmaceuticals (ASX: CU6) at BUY with $8.06 price target (50% upside)

  • Ord Minnett downgrades SRG Global (ASX: SRG) to ACCUMULATE with $1.32 price target (increased from $1.13)

  • Jeffries downgrades Peter Warren Automotive Holdings (ASX: PWR) to HOLD with $1.45 price target (from $1.95)

Key Events

Stocks trading ex-dividend: 

  • Mon 30 Dec: Rural Funds Group (ASX: RFF) (1.7%), Charter Hall Group (ASX: CHC) (1.61%), APA Group (ASX: APA) (3.7%), Transurban (ASX: TCL) (2.48%), Goodman Group (ASX: GMG) (0.42%)

Economic calendar (AEDT):

  • Today: Australian private sector credit

  • Tonight: Bank of England interest rate decision

  • Overnight: US GDP and unemployment claims

Written By

Vishal Teckchandani

Senior Editor

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