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The Morning Report is updated each weekday morning and is freely available to all site visitors. It provides a brief snapshot of both overnight global financial markets and the local share market from the previous day, including top 5 and bottom 5 movers, open corporate actions, and upcoming dividends. Also provided are quotes on indices, commodities and currencies, plus an Economic Diary.

20.10.2021

The Morning Report

Overnight global markets, Aussie market wrap, and research updates


Last Updated: Wednesday 20/10/2021

GLOBAL MARKET WRAP

The S&P 500 rose 33pts overnight to close 0.7% higher at 4,520, as investor sentiment remained upbeat amid continuing strength in company earnings. The Health sector was the strongest performer (+1.3%). The US 10-year treasury yield rose 4bps to 1.64%, while the USD Index fell 0.2% to close at 93.78 this morning.

Coronavirus update – New research by the US government suggests the Pfizer/BioNTech coronavirus vaccine is 93% effective in preventing hospitalisation among 12-18 year old’s. The US Centres for Disease Control and Prevention study was conducted between June and September when the Delta strain was the most dominant variant.

Eurozone: CPI is expected to increase 0.5% in September, following on from 0.4% growth in August whilst the yearly rate is expected to rise 40bps to 3.4%.

UK: CPI is expected to rise 0.4% in September after increasing 0.7% in August, with the yearly rate expected to remain unchanged at 3.2%.

Japan: The trade deficit is expected to narrow to ¥519.2 billion in September, down from ¥635.4 billion in August, with expectations imports and exports will rise 34.4% and 11.0%, respectively.

Canada: CPI is expected to grow 0.1% in September with the yearly rate expected to increase 20bps to 4.3%.

 

LOCAL MARKET WRAP

The ASX 200 fell 6pts yesterday to close 0.1% lower at 7,375, with the Resources sector the weakest performer (-1.5%). The SPI Futures Index is trading 41pts higher this morning at 7,383. The 10-year treasury yield fell 2bps to 1.73% and the AUDUSD rose 0.9% to 0.7474 this morning.

Coronavirus update – As at 18 October 2021, 85.1% of people aged over 16 years old have had at least one dose of a COVID-19 vaccine and 69.2% are fully vaccinated.

Brambles Limited (BXB) provided a trading update yesterday with 1Q22 sales from continuing operations up 9% ccy to US$1,292.1 million, reflecting rollover pricing benefits from the prior year and ongoing commercial discipline to recover inflation and other cost-to-serve increases across all regions. Volumes were broadly in line with the prior corresponding period as net new business growth of 2%, primarily in the European pallets and Australian RPC businesses, was offset by lower like-for-like volumes in North America primarily due to pallet availability constraints. BXB provided FY22 guidance with expectations of sales growth of 5-7% and underlying profit growth of 1-2%, reflecting short-term transformation costs. BXB shares rose 0.2% to close at $10.17.

Northern Star Resources Limited (NST) released its quarterly activities report yesterday, generating revenue of $848 million from gold sales of 386,160oz at an average realised price of $2,345/oz. NST achieved a group AISC of $1,594/oz, driven by continued solid performance at Yandal which sold 109,844/oz at an AISC of $1,345/oz. NST outlined it is currently on track to deliver FY22 guidance of 1.55-1.65Moz at an AISC of $1,475-1,575/oz, with production weighted towards the second half, benefitting from increasing grades at Yandal and increasing mining rates at Pogo whilst AISC is expected to decline over the year. NST shares fell 0.1% to close at $9.40.

The RBA minutes for its October meeting revealed little evidence of a potential change in policy with the bank reaffirming it will not increase the cash rate until actual inflation is sustainably within the 2-3% range, which is not expected to be met until 2024. The board noted that underlying inflation pressures in Australia were more moderate than in other advanced economies, reflecting a range of factors including the relatively slower rate of wages growth in Australia.

 

ASX 200 TOP MOVERS

Company Name Close Price Change (%)
Nuix Ltd (NXL) $2.80 7.7
a2 Milk Company Ltd (A2M) $6.97 5.3
Zip Co Ltd (Z1P) $7.10 5.2
Appen Ltd (APX) $10.26 4.6
Polynovo Ltd (PNV) $1.86 3.6

ASX 200 BOTTOM MOVERS

Company Name Close Price Change (%)
Uni-Bail Rodamco (URW) $4.78 -5.7
Codan Ltd (CDA) $12.39 -4.5
Chalice Mining Ltd (CHN) $6.82 -3.7
BlueScope Steel Ltd (BSL) $20.03 -3.5
Virgin Money UK PLC (VUK) $3.68 -3.4

ASX 200 COMPANY EVENTS

Company Name Event
Super Retail Group Ltd (SUL) Full Year 2021 AGM
Flight Centre Travel Group Limited (FLT) Full Year 2021 AGM

ECONOMIC DIARY

Country Event Date AEST
Australia Westpac/MI Leading Index 20/10/2021 10:30
Germany PPI 20/10/2021 17:00
United Kingdom CPI 20/10/2021 17:00
Eurozone CPI 20/10/2021 20:00
United States EIA Petroleum Status Report 21/10/2021 01:30
Australia NAB Quarterly Business Survey 21/10/2021 11:30
United States Philadelphia Fed Business Outlook 21/10/2021 23:30
United States Initial Jobless Claims 21/10/2021 23:30

OPEN ASX 200 CORPORATE ACTIONS

NameCODEEVENTLonsec RecommendationCLOSING DATE
Centuria Industrial REITCIPUnit purchase planSee CA Journal22/10/2021
Aristocrat Leisure LtdALLEntitlement OfferUnder review08/11/2021

Members can view the latest Corporate Action Journal in the "Latest Research" section for details on Lonsec's recommendations on these corporate actions.

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