Morning Market Wrap:
Overnight Markets:
US Cash session saw the Nasdaq bounce back from what I think was about 4 days in a row of losses. Finishing up with the Dow slightly down and SPX showing a reasonable gain, so kind of positive and kind of mixed:
- Nas: +1.64%
- SPX: +0.7%
- Dow: -0.11% (Call it almost flat)
FANG stocks pushed well, as did NVDA, with TSLA up 8.47% and 7.33% respectively. No real economic data overnight to attribute the move to, but I will say that all this was in the face of rising yields again, with yields popping their heads just above that October 22 high of around 4.342... So... that's something to be very aware of. Markets have sold off by some 250-300 points in the last few weeks through August, so it'll be interesting to see how they handle an even higher yield if it keeps pushing. Jackson Hole Symposium is later on this week, with Fed Powell set to give a speech at the end of it (Friday). This could provide some color on their thoughts going forward, so watch out for that. Markets might be a little timid going into that later in the week.
Metals and Macro:
Among the precious metals, silver got the better bid of the two, closing on its session highs at 23.34, at about a 2-week high, breaking out of a little bit of a 10-day base range. Gold still looks rather unimpressive but is at the top of its recent 3-day range. It's still sitting with an 18 handle, closing at 1893 USD. Yields (as discussed above).
Base Metals:
We saw an early sell-off (after Aus close) in Aluminum, where it dropped to the level I was talking about for about 2 weeks, but it bounced back with the peers and the market soon after to get back into its range, closing at 2145 USD/t. Nickel remained flat, up +0.04%, and copper held a similar pattern to gold at the top of about a 4-day range, up +0.58%.
Energy:
Natural gas closed back up 2.51%, basically bouncing back all that it lost the prior day. NEWC Coal Active month (Sept) closed at 162, up +1.25%. Oil rolled a bit, but only lost -0.43% on the WTI contract. So, I would say there's a continued positive tone in the energy sector this morning among the commodities. However, we did see the Energy sector in the US close down 0.64% on the session... Maybe they had outperformed over that bounce period. Iron ore continued higher late in the Aus session, reaching a 3-week high, but was pushed back down just below it in the late evening session, closing at 777 CNY. Uranium remained steady after the 3-day push, with the indicative price mid-point still sitting at 58.27. Uranium stocks got a solid bump in the US, with CCJ up 3.98%, UUUU bouncing back up 7.69%, and the sector as a whole having a solid move. Our names led with that yesterday, but the late market-wide sell-off in US futures and PSI saw them all sell off into the close. It will be interesting to see how they trade today; again, probably a sector I will be watching/trading closely. Lithium Futures also saw a big bounce, closing up by around 7%, at 221 CNY, hitting a 10-day high. The move was kind of out of nowhere, and we saw the Australian lithium names get a boost from that as well, with a similar continuation move in the US names overnight, with ALB and SQM up 2.55% and 2.35% respectively.
Local:
SPI has a positive 17-point lead-in this morning, with the relatively positive move in the US overnight. Again, we tried to push that move yesterday early, but the late sell-off was pretty annoying, to say the least. Sectors again in focus, as mentioned above. CXO has its Cap raise shares allotment today, so there will be 250m shares hitting its register. Be aware of that. The question is how much of that cap raise was short covering of the 200m shares' short interest - I'll update in a few days when the data is released.
Data:
Again, a quiet day on the data front, with no real notable data to be super cautious of. Existing home sales from the US at midnight (Aus Sydney time) is really all there is to keep abreast of. Most of the market will be cautious of the Fed Powell speech on Friday after the late-week Jackson Hole meeting. So, maybe brush up on that, as last year's speech gave the market a bit of a jolt. It's crazy to think it was this time last year that the market was trying to price in the Fed pause narrative! Goes to show the market is not the economy!
Have a great day, everyone.