Anyone who has been in broking will tell you that the Morning Meeting is how all brokers start the day. The format is to have a quick look at the overnight markets, consider what's coming up in the day ahead, hear from the analysts, share ideas and get set up for the day's stock market activity.
Why not sign up for a free trial? Get access to expert insights and independent research and become a better investor.
Anyone who has been in broking will tell you that the Morning Meeting is how all brokers start the day. The format is to have a quick look at the overnight markets, consider what's coming up in the day ahead, hear from the analysts, share ideas and get set up for the day's stock market activity.
Why not sign up for a free trial? Get access to expert insights and independent research and become a better investor.
DISCLAIMER:
Marcus Today offers information that is only general in nature. It does not take into account your personal financial situation, needs or objectives. Nor does it take into account the financial needs of any specific person. You should consider your own personal financial situation and needs or seek financial advice before making any decisions based on this information. For more information please see our Financial Services Guide.
*PLEASE NOTE: Transcripts are autogenerated and may contain errors, especially Stock Codes and Names.
SPEAKERS
Tom Wegner, Ben O'Leary, Layton Membrey
Ben O'Leary 00:14
Are you ever on Wednesday the 18th of May running a bit of a skeleton crew this morning with Marcus up in Sydney visiting Emery and Crystal stuck at home with COVID. But we will progress the Dow posted its third consecutive winning session overnight and strong retail sales data for April also taking comments from Fed chair out in its stride it was up 431 points or 1.34% s&p 500 was a little better up 2.02% and the NASDAQ was up 2.76%. European markets were all stronger mostly at one to one and a half percent. All sectors were higher in the US except for consumer staples, financials and materials were the best up around 3% Eight consumer discretionary is tech and industrials also posted gains of 2% or better as I mentioned, there was US retail sales that did boy the market a bit a 0.9% rise in April which was slightly short of the 1% gain expected by economists. But it was paired with a higher revision on the march number and it was also the fourth consecutive monthly gain. So I did paint a bit of a picture of a healthy US economy despite the high inflation and the concerns around that other economic data saw us industrial production at 1.1% in April, which was ahead of expectations and there was some commentary from Fed Chair Powell that didn't help market but it also didn't hurt it. He said there could be some pain for Americans as the Fed moves to bring inflation under control. He didn't note however, there are several plausible paths to having a soft ish landing emphasis on the issue. We do know that the raising of rate to stifle inflation is an attack on growth on the other side of it. So is that growth verse inflation battle that we have been talking about that we're going to keep watching play out elsewhere. We saw some better headlines out of China, which also contributed to the positive sentiment Shanghai COVID trends going the right way and some speculation that Beijing will dial back regulatory crackdown among a couple of others. Interestingly, the Bank of America's may global fund manager survey showed the highest cash levels since September 11 2001, the biggest short position on tech stocks since August 2006. And the biggest equity underweight since May 2020. Well, they say about when everyone's bearish bias and what happens there elsewhere, US Treasuries came under pressure, the 10 year yield remained under 3%. The US Dollar was stronger against the yen but weaker against all other majors. Tom, you're saying this morning that the US dollar and the euro are almost at parity, which has not happened quite a while?
Tom Wegner 02:28
Yeah, since 20 years goes at parity see interesting development that doesn't speak well for European economy. Really?
Ben O'Leary 02:35
Yes. Another thing to watch out the gold was up 0.3% Bitcoin futures were up 2% WTI crude oil was down 1.6%. And after all, that our local assets open slightly ahead of the 70 points that were being pointed to by futures with an 80 point or 1.1% gain bomb what's happening below the surface there.
Tom Wegner 02:53
Thank you, Ben. Well, our mark is lifting for fourth day in a row today, miners and tech stocks are outperforming consumer staples that only sector in negative territory Coles and Woolworths are both slipping James Hardy J Hx is up 5% on some broker upgrades BlueScope Steel VSL is also 4.1% Higher after upgrading guidance for the second half otter SKU is improving on news Twiggy will run the iron ore business for the first time since 2011 and baarle, and eagles automotive VLD and a PE are both down after warning on performance Eagles automotive pointing to semiconductor issues and how that's flowing into their business and creating some headwinds there. We also have the wage price index still to come this morning. And that's about it Ben.
Ben O'Leary 03:42
Very nice. Thank you Thomas. Layton, what's happening in broken land?
Layton Membrey 03:45
Thanks Ben. As you sign Tom James Hardy is out this morning on some broker comments but the brokers have lowered their target prices following results they have James Hardy is up on broker comments as you were saying Tom but just noting that the brokers have actually lowered their target prices but they have returned bullish recommendations with strong growth and a historically low valuation multiple the average target price is $50.70 Which implies a 35% upside and also having a look at South 32. This morning management estimate production to increase by 20%. Over the next two years. Macquarie believes earnings upgrade momentum remains strong and buyback extensions will assist shareholder returns the broker has returned. It's our form recommendation and target price of $6.90 which implies a 54% upside. Thanks, Ben.
Ben O'Leary 04:33
Very nice. Thank you. Layton. As I mentioned, we have a few absentees this morning so I'll just give a rundown on what the boys have done today. Henry is taking a couple of nibbles on some oversold targets as the market bounces as corporate travel in his sights as a way to play the corporate travel rebound off the United Airlines CEO to the corporate travel is back last he's having a look at one stock that's fallen hard and fast. It's solid bounce potential. You have to check out Henry's tape to see what stock that is also Got his Hot Tub Time Machine and a link to register for us and analysts on Friday at 5:30pm. And Bruce has his chart of the day as Whitehaven coal in his trading section today. He's got a little write up on that. Make sure you check that out. And Tom, back to you for strategy today.
Tom Wegner 05:15
Thank you Ben. I'm on strategy. Looking at our market ASX 200 is moving further off the bottom of its sideways trading range headlines done to pick up on more positive events. We also have a look at the Chinese market and how that is improving and helping sentiment especially with our miners notice that the Aussie dollar is back above us 70 cents indicating some growth fears have left the market growth. It's still one of the big overhang concerns but some of the fears have left our market match showing in our currency. We also have wages data today, which offers some upside risks to the Aussie dollar and could put a 40 basis point I bet on the RBAs radar. And we saw this Tuesday, the RBA considered a 40 basis point hike or their most recent monetary policy decision. Thanks, Ben.
Ben O'Leary 05:59
Good stuff. Thank you, Thomas. And we'll round it out with a question of the day as always simple one today. Is it game over for Crypto? Layton?
Layton Membrey 06:07
No, Ben, it's not game over? I don't think but I do think there's going to be a lot more caution just surrounding the whole crypto world. I think myself included and a lot of people don't really know much about it, and sort of just thought that it was this pretty safe, untouchable sort of Haven with Bitcoin up so much. But as we've seen, even the big ones can fall very, very quickly.
Ben O'Leary 06:27
Yeah we did see, it was Luna, was a top 10 in size of the crypto coin and it fell 99.99% In the matter of two days. Yeah. And very, very quickly fell 90 or 95%. So there was not really an exit chance to that people and you see screenshots doing the rounds of people's accounts gone from 1 million to $1,000 in the space of an hour. It's pretty scary stuff. And it does show the volatility of the asset class of cryptocurrency and something to be taken seriously Tom?
Tom Wegner 06:55
I think Bitcoin will be around for a little bit longer than Luna, I will make the point that Bitcoin it was labelled and looked at goal 2.0. And the correlation between with Bitcoin and equities, and in particular, the NASDAQ, we putting this out at the start of the week has become a lot stronger. And the reason people hadn't allocation for it was because they thought it offered some store of value in the same way gold did with its non fungibility and finite number units, I guess. And now the correlation is sort of changing or the correlation with gold, it's moving more to equities. So that might force some people to reconsider what that allocation of cryptocurrency is doing for their portfolio and why they have it.
Ben O'Leary 07:37
Good point there. Tom. I think the Bitcoin has potentially is transforming into a slightly different things what we thought it might have been be interesting to say the conversations in the house in Venezuela after they decided to adopt the currency into their system and now down 50% from its highs, so not what you really want in a currency that is playing an integral role in your country's financial system. So I think it may well turn into be a different sort of investment or asset than what we thought it was in might be that yeah, that NASDAQ having like a big tech stock really well, it's a sentiment thing, isn't it? So it's always the fear and greed index, just in a in one price. So it's very interesting. I think it's probably game over for a few turning over for Luna, the irrational exuberance was behind their creation and will be behind that demise as it comes out. I think at this point, there is still plenty to play out in the Bitcoin story and some of those bigger ones that do have a bit more of a purpose or they're just in some utility. Yeah, exactly. So continue to watch it play out as always. Thanks, guys. Thank you. See you tomorrow.