Investment Ideas From the Edge of the Bell Curve
The ASX 200 finished up 0.7% to close at 7,124.7, with 9 out of the 11 sectors in the green.
The best performers were interest rate-sensitive Tech (+1.90%), and Real Estate (+1.55%), which saw broad rallies.
In tech, we saw WiseTech add 1.9% to $67.43, while Xero rose 1.7% to $102.80.
Meanwhile, Utilities (-2.52%) and Energy (-1.26%) fell as oil continued to slide. WTI Crude fell by -0.70% to $78.33.
Large miners also gained today, with BHP gaining +1.7% to $47.14, and Rio Tinto increased 1.6% to $126.92.
Top performers on the ASX 200 were Star Entertainment (+6.86%), Genesis Minerals (+6.48%), and Bellevue Gold (+5.52%) also saw strong gains today.
The latest ANZ-Indeed Australian Job Ads show a decline in listed job advertisements by 8.4% over the last three months.
While this is still at a level that is higher than historical averages, the pace of decline could become a concern.
The numbers here are seasonally adjusted to account for the usual hiring seasons (which could be a factor in the drops in the last three months).
Moving into the new year, this leading indicator will be significant to keep an eye on to see if the Jan-Feb hiring hits expectations.
ANZ-Indeed Aus Job Ads has declined 8.4% over the last three months, but remains high compared to historical levels. The biggest declines in job ads has been in the therapy, sales and software development categories. @MadelineDunk @CallamPickering @cfbirch @arindam_chky #ausecon pic.twitter.com/GDtmerLjxc
— ANZ_Research (@ANZ_Research) December 4, 2023
The ACCC is ‘divorced from reality, ‘ lawyers of ANZ said today about the competition watchdog’s efforts to block its $4.9 billion acquisition of Suncorp’s banking segment.
In a tribunal hearing today, ANZ lawyers argued that mortgage brokers, aggregators, apps and regulatory changes had all lifted price transparency and boosted competition in banking already.
Ruth Higgins, ANZ’s Senior council, argued today:
‘Competition has changed in a manner that will not regress,’ she said. ‘These are changes of technology and consumer awareness, and there is no reason to believe this will collapse into consumer or competition inertia.’
The ACCC had argued in its decision in June that the acquisition by ANZ would ‘further entrench an oligopoly,’ and hurt competition in agribusiness and SME lending, particularly in Queensland.
Here’s a great collection of graphs from the Melbourne Institute showing last month’s inflation figures.
The deceleration of inflation seems to be picking up, giving investors more assurance that a raise is well and truly off the books for December.
Inflation gauge for November continues decelerating relatively sharply… pic.twitter.com/duyXg7W25V
— Alex Joiner 🇦🇺 (@IFM_Economist) December 4, 2023
Results from the Origin Energy [ASX:ORG] shareholder vote are in for the proposed $20 billion takeover by Canadian private equity consortium Brookfield and EIG.
66.97% voted in favour of the deal, while 31.07% voted against it.
Shares in the company have taken a further hit from it today, now down nearly -4%.
ASX 200 is up 0.65% at 7,119.4 as Aussie miners push up the benchmark.
Top performing sectors are Tech (+1.94%) and Materials (+1.39%), while depressed oil prices and Origins takeover bid chances are weighing on Energy (-1.90%) and Utilities (-2.25%).
Top performers on the ASX 200 today so far are Star Entertainment Group, up 7.35% and Bellevue Gold +4.94%.
‘For markets, it was not only the favourable inflation prints, but it’s a combination with a shift in Fed communication that brought an enormous boost in sentiment,’ said Christian Keller Barclays’ head of economics research.
Gold has hit record prices, up 1.78% to US$2,108.94, as softening US economic data and dovish talking points from the Federal Reserve officials have spurred investors to bet on early rate cuts.
Traders are fully pricing in a rate cut in June, with the chance of a reduction in May, priced at about 80%, according to swap market data.
Gold has now passed the all-time high set in August of 2020 in the middle of the pandemic.
Meanwhile, on the digital frontier, Bitcoin hit US$40,118, up 1.64%. Its the first time since May 2022 that the crypto has surpassed the 40k mark.
Investors are increasingly convinced the Federal Reserve is done with rate hikes as inflation cools, turning the focus to the likely cuts next year. The changed backdrop has fuelled a rally across global markets.
It’s worth remembering why those cuts will take place; however, it is likely due to a quick deterioration of economic conditions that underly markets.
It will be a good test of these two assets to see how they react to any potential economic deterioration and the extent to which they are correlated to wider indices.
Liontown Resources [ASX:LTR] announced today that it had signed a long-term port services & access agreement with Mid West Ports Authority (MWPA).
The agreement will help the lithium miner export lithium spodumene concentrate from its Kathleen Valley Project via the Port of Geraldton.
The offtake partners for this export are LG Energy Solution, Tesla, and Ford.
Liontown’s Managing Director and CEO, Tony Ottaviano, said:
“Approval by WA Ports Minister Hon. David Michael of the port agreement represents the final step in securing our supply chain to export lithium ore from Kathleen Valley. The Port of Geraldton is a world-class facility with future growth aspirations, and Liontown is pleased to support the diversification of critical minerals exports out of the port for at least the next 20 years.”
Shares in LTR are up today, but the company has struggled this year after the failed takeover by Albermarle.
The chemicals giant withdrew $6.6 billion bid, citing ‘growing complexities’ after Australia’s richest person Gina Rinehart bought a 19.9% stake in Liontown in order to block or shape the deal.
Wholesale distributor Metcash [ASX:MTS] has seen its shares rise by 3.11% in early morning trading as the company released its half-year results.
The company saw a 1.6% improvement in revenue, which totalled $9.0 billion. The company declared an interim dividend of 11 cents per share.
The company said its performance was due to strong sales in the current market, with food sales increasing in supermarkets by 6% and 5.2% in convenience stores.
They did note that the cost of living problems meant shoppers were decreasing average items per basket. This has been balanced out by higher foot traffic as customers hunt for more bargains.
Source: MTS
Origin Energy [ASX:ORG] is falling again today, down -2.56% this morning, as the writing appears to be on the wall for the upcoming shareholder vote today.
Shareholders are expected to reject the proposed $20 billion buyout of the energy giant by Canadian outfit Brookfield and EIG.
The hurdle that has been too high to jump has been the majority shareholder AustralianSuper, who has opposed the deal from the start, saying the offer is substantially too low.
The voting will commence at 2pm so stay tuned in the afternoon for any word from the vote.
Good morning all, Charlie here
The ASX 200 opened up +0.89% to 7,136.1 this morning as markets are poised for a strong day on optimism of no rate hikes likely in December, fuelling Wall Street which finished its fifth week of straight gains.
The Santa rally appears to be in full swing, but longer-term concerns are still present enough to declare clear skies just yet. Some indicators show headwinds are still present in global markets. The Goldman Sachs Financial Conditions Index had one of its steepest drops in recent weeks, all while many declare the soft landing imminent.
For now, traders have completely written off the idea of any rate hikes in December, so the path into the new year looks clear for gains in markets.
US Dollar and bond yields continue to sell off on the bet that the Fed has finished raising rates.
Wall Street: Dow +0.82%, Nasdaq +0.55%, S&P 500 +0.59%
Overseas: FTSE +1.01%, STOXX +0.82%, Nikkei -0.17%, SSE flat
The Aussie dollar fell -0.43% to US 66.19 cents.
US 10-year bond yield -13bps to 4.20%. Australian 10-year bond yields flat at 4.41%.
Gold is up 1.8% to US$2,072.39. Silver is flat at US$25.47
Bitcoin rose +1.80% to US$40,097. Ethereum rose +2% to US$2,206
Oil Brent fell -0.86% to US$79.56, while WTI Crude fell -2.08% to US$74.38.
Iron ore is up +1.2% to US$131.15 a tonne.
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Investment ideas from the edge of the bell curve.
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