Overnight: In Memoriam

World Overnight
SPI Overnight (Jun) 6461.00 – 2.00 – 0.03%
S&P ASX 200 6451.90 – 4.10 – 0.06%
S&P500 2826.06
Nasdaq Comp 7637.01
DJIA 25585.69
S&P500 VIX 15.85
US 10-year yield 2.32
USD Index 97.74 + 0.13 0.13%
FTSE100 7277.73
DAX30 12071.18 + 60.14 0.50%

By Greg Peel

Party’s Over

It was always a good chance the ASX would see a quiet session yesterday with Wall Street closed, the UK closed and random tweets unlikely as The Donald played nice in Tokyo. And indeed it was a low volume day.

A little-moved index nevertheless belied some notable sector movements beneath.

Profit-taking continued in the banks (-0.5%) suggesting the election gloss continues to fade away. The exit of Suncorp’s ((SUN)) CEO was also worth -2.1%.

That money appeared to flow into the rarefied air in which the iron ore miners are currently flying, with no immediate sign of a pullback in the iron ore price. Materials rose 0.8%. Watch this space today.

Speaking of switching, it seems if you wanted to get in ahead the highly conditional takeover bid by the Swedes for Vocus Group ((VOC)) the best place for funding was Telstra. Vocus jumped 17% but the telcos sector fell -1.0% as Telstra dropped -2.8% after initially rallying.

Consumer staples had another down-day (-0.8%) with Woolworths ((WOW)) again in the frame. That stock fell another -1.2% after announcing the completion of its buyback.

Energy might have expected more after the oil price bounced back but a -1.1% fall for Oil Search ((OSH)), following the announced retirement of the PNG prime minister, squared things up for a flat close.

Healthcare also closed flat despite a weak earnings report from Fisher & Paykel Healthcare ((FPH)) sent that stock down -3.2%.

With the futures down -2 points again this morning it looks like we’re in for more of the same, but for the fact the iron ore price has shot up another 4% and Brent crude is up 1% to boot.

Commodities

Spot Metals,Minerals & Energy Futures
Gold (oz) 1284.60 0.00 0.00%
Silver (oz) 14.56 + 0.03 0.21%
Copper (lb) 2.68 0.00 0.00%
Aluminium (lb) 0.80 0.00 0.00%
Lead (lb) 0.82 0.00 0.00%
Nickel (lb) 5.60 0.00 0.00%
Zinc (lb) 1.23 0.00 0.00%
West Texas Crude 59.21 + 0.22 0.37%
Brent Crude 70.16 + 0.92 1.33%
Iron Ore (t) futures 108.00 + 4.35 4.20%

Russian oil production trended lower in May due to a contamination issue at a major pipeline. The downturn in May finally brings Russia in line with the production cuts it agreed upon with OPEC.

The news sent Brent oil in particular over a percent higher.

The LME was closed overnight so no base metal price movements. Gold was open for trade but is unchanged despite the US dollar index rising 0.1%.

Iron ore was well and truly open for trade.

The Aussie fell -0.1%.

Today

The SPI Overnight closed down -2 points.

China releases April trade numbers today while tonight the US checks out consumer confidence.

Galaxy Resources ((GXY)) holds its AGM today.

The Australian share market over the past thirty days…

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
ABC ADELAIDE BRIGHTON Upgrade to Outperform from Neutral Macquarie
AGL AGL ENERGY Downgrade to Underperform from Neutral Macquarie
Downgrade to Sell from Buy UBS
ANN ANSELL Upgrade to Outperform from Neutral Credit Suisse
BSL BLUESCOPE STEEL Downgrade to Neutral from Buy UBS
CLW CHARTER HALL LONG WALE REIT Upgrade to Buy from Hold Ord Minnett
COL COLES GROUP Downgrade to Neutral from Buy Citi
CSR CSR Upgrade to Outperform from Neutral Macquarie
Downgrade to Sell from Neutral Citi
EHE ESTIA HEALTH Downgrade to Neutral from Buy UBS
EVN EVOLUTION MINING Downgrade to Hold from Accumulate Ord Minnett
ILU ILUKA RESOURCES Upgrade to Buy from Neutral Citi
KDR KIDMAN RESOURCES Downgrade to Hold from Buy Ord Minnett
NST NORTHERN STAR Downgrade to Hold from Accumulate Ord Minnett
OSH OIL SEARCH Downgrade to Underperform from Neutral Credit Suisse
OZL OZ MINERALS Upgrade to Add from Hold Morgans
PLS PILBARA MINERALS Downgrade to Lighten from Hold Ord Minnett
QBE QBE INSURANCE Downgrade to Neutral from Outperform Credit Suisse
SHL SONIC HEALTHCARE Downgrade to Sell from Neutral UBS
SUL SUPER RETAIL Upgrade to Overweight from Equal-weight Morgan Stanley
TNE TECHNOLOGYONE Downgrade to Sell from Neutral UBS
WOW WOOLWORTHS Downgrade to Sell from Neutral Citi
Greg Peel

About Greg Peel

Greg Peel joined Macquarie Bank in 1986 and acquired trading experience in equities, currency, fixed income and commodities derivatives, ultimately being appointed director of equity derivatives trading. He later published In With The Smart Money (a plain English guide to the mysterious world of financial markets and derivatives) and acted as a consultant to boutique investment funds. In 2004 Greg joined FNArena as a contributing writer. He is now a director and principal of the company. Greg compliments the journalistic background of the FNArena team with lengthy experience as a financial markets proprietary trader.

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