Energy stocks weighed on the market overnight with oil falling Brent falling 2.75%, and WTI falling below US$90, the Dow finished down 85 points (-0.26%). Technology stocks continued their rise, the Nasdaq gained 0.41%. SPI Futures are up six points, indicating a slow day of trade ahead.
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Henry Jennings 00:00
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Henry Jennings 00:59
Good morning, and welcome to the Marcus Today Breakfast Briefing. My name is Henry Jennings It is Friday, the fifth of August. And as usual, with all the information contained in this briefing, it is general advice only. So please do your own research. Contact your own financial advisor regarding any of the thoughts, ideas or insights in this briefing, if you need to, you can pause the slideshow here and read the disclaimer in full. And if you're listening to this on a podcast, wherever you are in this wonderful world of ours, whether you're in the car, the tram, the train the bus, or just out there walking the dog, then you can head on over to marcustoday.com.au at your leisure. And read the disclaimer there. Plus, of course, you can sign up for a free trial if you're not yet a member of that wonderful community. And also, you can check out all the other wonderful goodies that are on the Marcus Today website. It's not just about the newsletter or the email. It is all about the site as well.
Henry Jennings 01:51
All right, well, last night in the US we closed down 86 points on the Dow Jones 32,727. But of a meandering kind of day, a lot of push me pull you things coming out at the moment, a bit of a Dr. Doolittle day, we have the threat of recession on the one hand, we have the threat of interest rates on the other hand, and if you had three hands, then we would have corporate earnings on that last hand. So a lot of conflicting signals coming out at the moment in terms of where the market is going. So as a result, it's tending to trend sideways. Focusing on results, we did get blocked after hours, which looked pretty disappointing. That was down around 7% After Hours also, Warner Brothers not so good either. But Kellogg's have just come out and they look as if they're quite good. And they are upgrading guidance. But we do have the big jobs number on Friday. So Friday us time. So that is the big number 250,000 is the number you should be looking for in terms of job creation in the US. So not sure whether we want a good number or a bad number in terms of the market. But that will be the big swing factor this week.
Henry Jennings 03:02
So s&p 500 Barely registering a pulse yesterday down three points 4152. and the NASDAQ up point four 1% 52 points to 12 721. That s&p in the middle for digital as is always the vix index, coming under some pressure again down one point or 2.32%. If I was trading, the vix index and trading volatility, I'd be starting to buy some of that vix index at the moment. US can be a little bit thin and less liquidity during the summer season. But of course, that summer season is coming to an end result season is coming to an end. And we could be in for a big autumn in northern hemisphere or the fall, as they say, in the US. So I'd be starting to look at that vix index, certainly, there's no reason no justification, I guess, for it to be quite so low at the moment 18 as the long term average. But you would have to say that given the risks for the soft landing, given the risks geopolitically, after Nancy Pelosi went to Taiwan, then there are more elevated risks than the VIX is showing that may be a function of just disinterest at the moment, Spy futures up six points, so not showing an awful lot of interest today. 6891.
Henry Jennings 04:18
Heading to commodities, we saw oil under pressure, Brent crude 9412, down to dollar 66 2.75% WTI, now below 90 bucks, which is where it was before Russia went into Ukraine. Also notice the French Right Wing Leader, Marine LePen saying that sanctions that the Europeans have imposed on Russia should be withdrawn because they're not doing much good. And all that's happening is Europe is suffering as a consequence of that. She was called out for that. But certainly, there are some I guess that feel that the sanctions really aren't working. And the Russian economy hasn't collapsed, as some had predicted, mind you that is because the oil price was so elevated and of course the Russian oil industry and gas industry doing very well out of those oil prices. But if we didn't see the oil price come off a little bit. It may put a little bit more pressure on Mr. Putin. So we'll see how that pans out. But 2.34% down for WTI last night.
Henry Jennings 05:22
Gold big big mover last night maybe on the back of Jim Cramer from Mad Money on CNBC saying that gold had reached a turning point and was now set to benefit and go higher. That's usually Jim Cramer is completely wrong. But in this case, it looks as if he's called it at least a little bit right short term anyway. $30.50 up 1806 spot nine zero at 1.72%. So our gold sector today will be buoyant, to say the least. Iron ore though unfortunately that's going to affect BHP and Rio aren't always down 3.52% $3.88 106 50 I suspect that some of the geopolitical politics that is happening at the moment with Taiwan and China is to blame for that iron ore. And of course, we still got that draconian lockdowns restrictions in China, although we haven't heard quite so much about that in recent days, but certainly China will need to do something to stimulate their economy coming out of COVID in other commodities last night copper was up point six of a percent nickel down point for Aluminium up 1% zinc had a really big night last night at 5.5% lead up 1% And Tin 1.4%.
Henry Jennings 06:36
In terms of international mining stocks. Last night bhp was down point two of a percent in ADR terms so no change really from the fall yesterday. Rio Dow was up point two 4% Freeport McMoRan up at point two four. We had Alcoa down 1.3 tech up 1.5 Anglo up 3.2 Glencore up 3.1 Valet up half a percent and Albemarle down 1.9% In the US.
Henry Jennings 07:07
Aussie dollar 6965 at the moment. Here you can see the s&p 500 not doing much meandering around for most of the day trying to digest earnings. And that all important jobs number which is coming out tonight. So we did get a little bit of data from the US last night as well. But mainly the focus is on that jobs number and that will probably dictate Tin the market goes. Although, given that the data we've seen recently has failed to even move the dial an awful lot. It may be that we see a pretty Jonnie kind of reaction to that jobs number. We did see the doubt last night had a particularly pathetic trading range. The high was up 17 points the low was down 160 closing it down at six. So very little volatility there No wonder people aren't buying the VIX because it's expensive to hold option premium if the markets not doing anything. It does cost you money every day to hold those bets. In terms of US stocks last night Apple was down point one 9% meta up 1% Google, up point one Microsoft up point for Amazon up 2.2 Tesla up point for Netflix at 1.4 Twitter at point one five US banks were easier. So maybe our banks will be a little easier today JP Morgan 1.1% down on Wells Fargo was down 1.9% block was up nearly 1.9% in normal trade but results after hours. I think they were down around seven and a half percent after hours so don't expect great things from block today did look as if those results were slightly underwhelming and we will get to those in a minute.
Henry Jennings 08:49
Major stories last night the US dollar down that's why gold is going up bond yields up equities hardly changed. We did see a rise in US weekly jobless numbers, which does suggest that we are seeing a slowing and a softening of that labour market which is after all, what the Fed wants to see but job losses nowhere near recession levels from 2001 and eight. The all eyes though will be on that US jobs numbers tonight non farm payrolls expected to be plus 250,000. So that is the number when you wake up at three o'clock in the morning grasping for your Bloomberg. That is the number that you were wanting to see all drops on recession fears and it is now back to those pre Ukraine invasion levels and the Bank of England raised rates by the most since 1995. As despite the recession risks they put up rates by half a percent to 1.75%. Inflation is now on track in the UK.
Henry Jennings 09:49
To top what to be 13.3% in the last quarter of the calendar year. 13.3%. That is a big big rise
Henry Jennings 09:59
Then we'll talk about energy prices because they're going to see a massive increase in energy costs in October. In fact, the average UK household will be paying a vast amount of money. In terms of their heating bill nearly 6000 kangaroo dollars for gas and electricity, the average household will be paying not just this year, not just next year, but also well into 2024. If forecasts are to be believed, the Bank of England has begun a $40 billion government bond sale in the second half. That is the opposite of quantitive. Easing. That's what they call in the UK, the gilt market. And China obviously firing a few missiles at Taiwan and a few live drills pretty close. The US trade deficit shrinks to 6.2% exports at a record high and suggesting no recession. So maybe we will see that soft landing. A little bit of weakening in jobs a little bit of weakening inflation would not hurt the US economy coin base up 10% on a tie up with Blackrock to offer institutional clients crypto trading and custody and meta was up around 1% on its first bond offering and in fed speak last night Mr. Sees rates a bit above 4%, mid 2023 higher than current market expectations and needs to see months of inflation declines before rates peak. So there we go.
Henry Jennings 11:26
More news from the Fed heads. In terms of our market today. The block numbers let's have a little look at those block reported $52.5 Billion US in transactions that missed the estimates of 53.4 7 billion cash app the the app which is used for sending money between individuals counted for roughly 48% of the gross profit. But it does look like those numbers for block did miss expectations. Credit Suisse Group is discussing slashing 1000s of jobs globally.
Henry Jennings 11:58
10 year yields in us 2.69 Australia 3.14 crept up a little bit yesterday Germany point eight of a percent the stocks 50 over in Europe the indices their stocks 58.6 and the footsie barely changing CAC up point six and DEC up point six It was a day of point sixes and global potash according to some forecasters will remain tight. The production will remain tight even as more buyers shed their fears of buying from Russia. And in Maya. Why are the stock code they're slowly lose creeping out the register now around 22% and Gen X power g n x is looking maybe at another rival bid after the knockback of Farquhar that stock file quote from Atlassian. The skip company that he has put in place to bid for Gen X, that bid got knocked back as far as our market goes today. Of course, we do have spy up six hole points. So not a huge amount to expect today, we might see a little bit of weakening in the banks. We did see the banks holding up relatively well yesterday. Yesterday, though, was a one point change. In the end, we gave back all those good gains we saw early in the morning. As resources, especially the iron ore space came under pressure, we'll expect to see a little bit of interest stirring in resource stocks. It wasn't all bad news and resource stocks yesterday lithium stocks were mixed in there were one or two base metals stocks doing well. So there is some risk appetite out there. Today, we will see the gold miners doing well, obviously on that big rise in the gold price. And we may see a little bit of money flowing back into commodity stocks ahead of that US jobs number. Just a bit of book squaring before the weekend. No one wants to have huge amounts of risk if they got a long or short position on a Friday ahead of a US job number. So that's something to bear in mind. So some of the winners this week may see a little bit of selling and some of the losers this week may see a little bit of buying.
Henry Jennings 13:55
Question of the day today. This is goes to what we were asking in our morning meeting yesterday is that question that day yesterday? What's your best source of information when you wake up first thing in the morning? I know that mine is Bloomberg that's the first thing I reached for and has been the first thing I reached for for some time. But what is your best information source? I'm not fishing for compliments about Marcus today. But apart from Marcus today, what do you look out for your best source of information? Well, that's it from me today. You can head on over to the markets today Facebook discussion group as usual. It's a fantastic group great insights, great thoughts and ideas from members over their members helping members we've got over 3800 members now on that Facebook book group. So no matter what question you have, as long as it's within the rules that we have for the group, ask away and someone or us will be able to answer that. If you're listening to this on a podcast and you want to listen to other podcasts in the markets today stable. There's the market strategy podcast which is our fly on the wall morning.
Henry Jennings 15:00
Eating podcast which is now behind a paywall. I know some of you are struggling to find it with various login issues with that, please persevere it is worth it and we are looking to make it as easy as possible and not put so many roadblocks in the way to get hold of that podcast. But we want to make it quality content for members of Marcus today it rather than giving it away. Talking and giving it away though on the couch is free as it is the morning meeting the morning updates with the breakfast briefing and of course the end of day podcast so you can subscribe to those streams and get all that wonderfulness there. And my on the couch podcast and I failed miserably this week to do a new one, but I promise next week, we'll do one. But that's it for me today. Thanks very much for listening. Have a great day and may the trading Gods be with you.