ASX News Live | ASX 200 to Fall for Start of Final Quarter of the Year; Stocks to Watch; PEB, SYM, TIE

The ASX 200 closed down by 0.22% today, trading at 7033.2 after a depressed day of trading as investors await the RBA’s interest rate decision due tomorrow.

Although rates are widely forecasted to remain on hold tomorrow, investors were still wary to hear from Michele Bullock and the RBA board to see how long rates are likely to remain at these levels.

NAB has come out predicting that the RBA will keep interest rates on hold tomorrow but says that the RBA will likely raise rates to 4.35% in November.

Economists are warning that the combination of El Nino, higher food and fuel costs, plus a weak dollar could help push rates higher, according to a quarterly survey by AFR.

The survey has economists now saying they expect the first interest rate cut to August 2024.

The worst performing sectors today were Health Care (-1.34%) and Staples (-1.05%), while the best performers were Utilites (+0.64%) and Materials (+0.55%).

Eight of the 11 sectors were in the red at the closing bell today, with Sayona Mining (+12.90%) the best performer of the ASX200 and Coronado Global Resources (-4.37%) the worst performer after revising its production guidance down for the second time in FY23.

Qantas is facing further struggles as its WA workers will strike for 24 hours on Wednesday amid wage negotiations that were sparked by the $24 million exit package given to Alan Joyce after his early retirement amidst collective scandals rocking the airline.

Here’s an update from one of our Editors at Money Morning, Ryan Dinse.

He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur.

He is walking through why investing in tech sure beats buying it.

Simply put, if you look around, everything is moving into the realm of technology.

• The technology sector is one of the fastest-growing industries in the world. This is due to the increasing adoption of technology in all aspects of our lives, from the way we work and communicate to the way we shop and entertain ourselves.
• Tech companies are often highly innovative and disruptive. They are constantly developing new products and services that can have a major impact on the way we live and work. This gives them the potential to generate significant revenue growth and profits.
• Tech companies are often well-positioned to benefit from long-term trends. For example, the growth of e-commerce, cloud computing, and artificial intelligence are all creating new opportunities for tech companies.

If you want to find out more, click the link below.

https://www.moneymorning.com.au/20231002/mm-mon.html

 

It’s been a tough quarter for global markets. Equities saw their first-quarter declines this year while bond yields continued to rise.

Concerns are being raised about the impact of falling bond prices and the escalating risk from the global destruction in the collateral value of fixed-income securities in a highly leveraged economy.

Fixed-income securities, often in the form of bonds, are popular investment options worldwide. They are considered relatively stable compared to equities due to their regular interest payments and the promise of principal repayment at maturity. These securities are widely used as collateral in financial transactions, providing a sense of security to lenders. Collateral value refers to the worth of these securities when used as a guarantee for loans or other financial obligations.

Despite US banks passing stress tests at the end of June, some are raising concerns about their ability to lend in the current bond environment.

Source: Wolfstreet.com

Here’s an interesting discussion with billionaire Barry Sternlict, predicting the potential of a Christmas slowdown. Do you think he’s overly pessimistic?

"The Fed should stop," says billionaire Barry Sternlicht. "What they're injuring is the balance sheet of the United States. The economy is going to slow. The regional banks do not have money." pic.twitter.com/lFKopsJlNr

— Win Smart, CFA (@WinfieldSmart) September 30, 2023

Gold prices have taken a tumble in September, with some of its biggest losses seen on the Chinese markets.

The Shanghai exchange saw its biggest drop in three years as the Chinese enjoy the ironically named ‘Golden Week’, which has seen people on holiday and Chinese tourists flood Thailand as visa waivers open up there.

Globally, the gold price has seen heavy pressure recently as bond yields move into previously unthinkable territory, nearing 5% yields on 10-year treasury notes.

Source: BullionVault

‘While gold technically is oversold‘ – now down 4.1% for the month of September in Dollar terms –’there is not much on the horizon for a large bounce,’ says a note from the trading desk at Swiss refiners and finance group MKS Pamp.

‘China is out for Golden Week [until Monday 8th October], removing a potential big bid, and while physical demand in other regions has returned (US retail investors, Middle East and Far East), that is supportive, not outright bullish.’

 

Markets are flat around midday, with the ASX 200 at -0.03%, 7,046.7.

The worst hit is the Health Care (-0.86%) and Energy (-0.65%) Sectors, while Real Estate (+0.65%) and Materials (+0.63%) see the biggest gains.

ASX market movers:

• Coronado shares have dropped 4.24% after the coal producer revised down its full-year production guidance due to disruptions at its Buchanan mine in Virginia.
• Syrah Resources shares have soared 12.75% on the back of improved natural graphite demand in the most recent quarter.
• Superloop shares have gained 1.5% after the company let its bid for fellow ASX-lister Symbio lapse due to a competing buyout offer from Aussie Broadband. Symbio shares jumped 14.77%.
• De Grey Mining shares are down 1.12% after the gold miner completed a $300 million share placement priced at $1.05 a share. Shares last traded at $1.09.
• Pacific Edge shares are down 16% after the company warned that proposed changes to US Food and Drug Administration guidelines could result in more red tape for its bladder cancer diagnostic device, Cxbladder.
• Megaport shares are up 2% after the cloud provider confirmed its new CFO, Leticia Dorman, who has stepped up from her interim position there.

As disgraced head Sam Bankman-Fried was denied temporary release from prison before his trial, crypto markets are on the move.

Meanwhile, millions in Ether tied to an FTX hacker are on the move. FTX was hacked hours after declaring bankruptcy in November 2022.

Big gains have been seen across the board as markets react to shaky equities markets and sky-high bond yields with surprising enthusiasm.

BTC’s relative strength index (RSI) sits at a whopping 81.74, showing high buying pressure and a short-term bullish trend.

In a recent update from the DFA (Digital Finance Analytics) survey and modelling, it has been revealed that mortgage stress in Australia reached a record high in cash flow terms by the end of September.

This raises concerns among economists, policymakers, and everyday Australians as the Reserve Bank meets tomorrow with new Governor Michelle Bullock at the helm.

It’s almost unanimously agreed that the RBA will keep rates on hold tomorrow, but the biggest question is when they will next come down.

CoreLogic housing data showed prices rose 0.8% nationally in September, led by Adelaide, Brisbane and Perth, where housing supply remains about 40% below the five-year average.

The median price of a home is now $1,110,660 in Sydney, $776,716 in Melbourne and $691,591 in Adelaide.

The DFA’s report is a stark reminder of the impact that rising interest rates are having on Australian households.

Surging immigration has also been raised as a concern for many renters within Australia’s cities as rents skyrocket.

Flash Report. Mortgage Stress end September at record high in cash flow terms via the DFA survey and model. "It's stress Jim, but not as we know it…"!! pic.twitter.com/XDfYQf242u

— Martin North (@DFA_Analyst) October 1, 2023

• ASX 200 opens down -0.28% at 7,028.6
• $AUD flat -0.07% at 64.29 US cents
• ASX futures flat -0.05% to 7,048.5
• S&P 500 down -0.27%
• NASDAQ up +0.14%
• DOW down -0.47%
• FTSE flat +0.08%
• STOXX flat +0.07%
• SSE up +0.10%
• Bitcoin up +3.58% to $US 27,985.54
• Spot gold down -0.46% to $US 1,846.54
• Iron ore flat -0.04% to $US 120.79
• Brent Crude up +3.41% to $US 95.34pb

All figures shown are from 10:10am AEST

Good morning,

We’re back in the office after a great long weekend.

Big congratulations to Collingwood for their tight win versus the Lions.

For the markets, we start a new month and the start of the final quarter of CY2023.

The quarter finished in typical September weakness for many stock markets.

‘September has lived up to its reputation as being a weak seasonal period for stocks,’ LPL Financial chief technical strategist Adam Turnquist said. ‘The S&P 500 is coming into month end with a loss of over 4 per cent and a decent amount of technical damage.’

The S&P 500 finished the month down -4.87%, its biggest pullback since last December.

The ASX 200 was down -1.88% for the past month, mirroring weakness seen in global markets.

Gold was down for the fifth consecutive session to its lowest since March.

The indicator for many investors recently has been Bond yields. The US 10-year note was flat but sat at 4.579%, uncomfortably high for many who now see it in striking distance of the once unthinkable 5%.

Australian 10-year Treasury sits at 4.48%, up 48 bps in the last month alone.

This put pressure on equities along with a strong dollar and threats of further contagion from China’s property woes after Evergrande again showed signs of crisis as it again failed to pay a bond note and saw its ex-CEO and ex-CFO were arrested by Chinese authorities, sending markets there in a tailspin.

In the US, a last-minute deal was reached in Congress to avoid a Government shutdown. Republican leadership led by House Speaker Kevin McCarthy faced a direct threat to his leadership for his compromise to avoid shutdown, with some seeing him losing the game of chicken.