ASX Futures (SPI 200) imply the ASX will open 52 points higher, up 0.71%.
US indices bounced back in early trade - only to close flat, European gas prices spike as Russia cuts gas to Poland and Bulgaria, and investors juggle another batch of mixed US corporate earnings.
Let’s dive in.
Thu 28 Apr 22, 8:28am (AEST)
|US 10 Yr T-bond||2.818||+1.66%|
Major US indices faded into close after getting smashed on Wednesday - not a good look. At their intraday highs, they were up:
Dow Jones +1.37%
S&P 500 +1.57%
The usual suspects are weighing on the market including fears that an aggressive Federal Reserve will push the economy into recession, mixed corporate earnings, worries about China’s covid outbreak and tensions surrounding the war in Ukraine
Russia’s Gazprom, one of the world’s largest natural gas producers, said it is halting gas deliveries to Bulgaria and Poland after the two failed to pay in rubles
5 out of 11 US sectors were green
Energy, materials, tech and staples outperformed
Real estate, utilities, healthcare and financials underperformed
53% of US stocks declined
69% of US stocks trade below their 200-day moving average (69% on Wednesday, 59% a week ago)
Robinhood (-4.9%) chief executive Vlad Tenev announced plans to cut 9% of the company’s workforce
Visa (+6.5%) announced 17% purchase volume growth on its network as consumers continue to spend despite omicron and the suspension of Russian operations
Chipotle (+2.6%) reported better-than-expected first quarter earnings as cost inflation was passed onto customers
Meta (+19.6% in after hours) daily active users, which declined in the December quarter for the first time, bounced back slightly from 1.93bn to 1.96bn. The overall result was mixed as Facebook topped expectations for average revenue per user, but missed almost every other key metric
PayPal (+5.5% in after hours) lowered its full-year profit view, signalling that payments volumes could take a hit from surging inflation
US earnings to watch this week:
Thurs: Twitter, Mastercard, McDonalds, Amazon, Intel, Apple
Fri: ExxonMobil, AstraZeneca, Shevron
Australia’s March quarter inflation was 5.1% on-the-year
The most significant contributors were fuel (+11%), tertiary education (+6.3%) and new dwellings (+5.7%)
Consensus was expecting a rise of 4.6%
US trade deficit in goods jumped 17% in March to a record US$125.3bn as ports unload a huge backlog of imported goods and rising prices tied to inflation
US pending home sales, a leading indicator of housing activity, declined in March for a fifth month in a row
Iron ore is showing signs of stabilising around US$150 a tonne
Oil had a lot to digest after Germany signalled they are ready to support a gradual ban on Russian oil, the US Energy Information Agency crude oil inventory report posted a small build in stockpiles and the US dollar continues to weigh on commodity prices
Gold fell sharply as US stocks tried to rebound and as the US dollar continued to rally
Thursday, 28 April 2022
Thursday, 28 April 2022
|Lithium & Battery Tech||61.71||+4.25%|
|Aerospace & Defense||106.16||-0.81%|
|Robotics & AI||23.83||-0.50%|
There wasn't too much to unpack for the overnight session. Some sectors that were almost addressable include:
Tech: flat close, failing to bounce from oversold levels
Copper: ETF rose but looks like local miners had already bounced (or tried to) on Wednesday
Uranium, travel: ETFs both posted small gains of less than 1%
The market is now in a vulnerable position where it needs to try and stabilise. As US trader Mark Minervini said this morning:
"With the market in correction this is where the willingness to exercise "sit out power" is key. Remember, while you do nothing... less experienced, lesser disciplined and less skilled investors lay the groundwork for your success. They build the bases, I buy the breakouts."
Gold got smashed overnight as the attempted bounce in equities dampened demand for safe haven assets. The US dollar continued to rally, rising above the pandemic peak, which also weighed on commodity prices.
"Gold is very vulnerable to another slide if risk appetite gets another boost on optimism that China could be ready to relax some of its lockdowns," said Oanda senior market analyst, Ed Moya.
The Rare Earth/Strategic Metals ETF rallied 3.8% after a strong session for Chinese players, many of which jumped by daily limits of 10%.
In the March quarter, Ganfeng Lithium, one of the world's largest lithium miners and battery developers reported:
Revenue of 5.4bn yuan, up 234%
Net profit of 3.53bn yuan, up 640%
The company addressed the recent decline in lithium prices, saying that future earnings will remain positive due to a lag in price adjustment.
Pilbara Minerals (ASX: PLS) also finished its fourth spodumene concentrate auction last night, held via its Battery Materials Exchange. Bids for 5,000 dry metric tonnes (dmt) of spodumene reached $5,650 dmt.
Strong earnings and spot prices sounds like a winning recipe to drive some positive flow for local lithium names.
Although, the Rare Earth ETF closed well below session highs of 5.5%, rejecting the previous area of support (red band).
ASX corporate actions occurring today:
Ex-dividend: ACF, GCI, KAT, KKC, PCI, QRI, SST, TCF
Dividends paid: CAM, CLV, COG, IMA, SRG
Listing: None today
Issued shares: AGR, AGY, BMN, BXB, CAR, EMR, EOL, ERM, FZO, GBZ, HVY, IRE, LNY, LOT, LRS, MFF, MGF, NBI
Things of interest (AEST):
US GDP Growth Rate (March Quarter) at 10:30 pm
Finance Writer & Social Media
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