Global stocks claw their way back into positive territory as oil prices recovers, while investors buy the dip. Reporting season continues on the local bourse with earnings results leaving a mixed impression. The Australian sharemarket is set edge higher with the SPI futures pointing to an increase of 0.1 per cent.
Wall St rallies as Pfizer gets full FDA approvalWall St closed in a sea of green with the Nasdaq closing at a record high as Pfizer, energy and technology stocks boosted the major indexes. Oil prices climbed back after their steep decline last week.
Pfizer soared 2.5 per cent after the Food and Drug Administration granted their Covid-19 full-approval. The vaccine was administered in the U.S. under emergency use authorization. Investors' optimism grew as the full-approval could ease concerns around those who have been hesitant to get the shot. President Biden urged Americans to get the shot following the news.
Reopening stocks like American Airlines, Delta and cruise line companies jumped over 3 per cent. The FDA approval acted as a tail-wind for travel companies and also for the fight against the coronavirus.
Meanwhile, investors digested some economic news as the tune around the supply chain constraints and existing home sales continued.
Supply shortages and Covid-19 hinders sector recovery while existing home sales riseU.S. manufacturing sector continued to expand in August but at a slower pace than the month before. According to IHS Markit, output dipped from 59.9 in July to 55.4 in August, the lowest since December last year. Manufacturing PMI slid to 61.2 from 63.4 in July to a four-month low. They reported that supply shortages and capacity constraints slowed down the recovery due to the pandemic.
Elsewhere, sales of existing homes rose for the second month in a row. The national association of realtors said that previously occupied homes rose 2 per cent last month to 5.99 million, with the medium home price climbing 17.8 per cent from a year ago to US$359,900, however, sales inched up over the year by 1.5 per cent.
Nasdaq closes at record highAt the closing bell, the Dow Jones gained 0.6 per cent to 35,336, the S&P 500 added 0.9 per cent to 4,480 and the Nasdaq closed 1.6 per cent higher at 14,943 points.
Across the S&P 500 sectors, you can see a recovery in the growth and cyclical sectors, while defensives closed in the red. Energy fuelled higher by 3.7 per cent, Technology powered up by 1.3 per cent while Financials banked 0.8 per cent. Utilities closed in the red, down 1.3 per cent followed by Real Estate, Consumer Staples and Healthcare.
The yield on the 10-year treasury note was close to unchanged at 1.26 per cent, as investors wait on the sidelines from comments from the Fed’s Jackson Hole meeting at the end of the week.
European stocks rises as reopening stocks leadAcross the Atlantic, European markets closed higher as reopening stocks led the rally. Paris added 0.9 per cent, while Frankfurt and the London’s FTSE both added 0.3 per cent.
In U.K trade, heavyweights BP and Royal Dutch Shell pushed the index higher on stronger oil prices while AstraZeneca fell 1.2 per cent, the other direction to Pfizer after the FDA full approval.
Elsewhere, mining giants Rio Tinto added 0.5 per cent while BHP jumped 1.1 per cent.
Asian markets climbs higher as China declares no locally Covid-19 casesAsian markets closed higher. Tokyo’s Nikkei gained 1.8 per cent after tumbling to an eight-month low last week as auto vehicle stocks rebounded following Toyota Motor's announcement of slashing global production by 40 per cent next month due to a shortage of computer chips.
Hong Kong’s Hang Seng added 1.1 per cent while China’s Shanghai Composite closed 1.5 per cent higher. The country announced no new locally acquired Covid-19 cases for the first time since July.
ASX 200 snaps 5-day losing streakYesterday, the Australian sharemarket closed 0.4 per cent higher at 7,490 snapping its five-day losing streak.
Technology shares led the rally with commodities making a U-turn, as oil and iron ore prices bounced back after its sour performance last week. Consumer Staples and Energy fractionally fell into the red, by over 0.3 per cent.
In corporate news, earnings results gave a mixed impression on investors.
Private health insurer NIB
(ASX:NHF) slumped 11 per cent after full-year figures came in below expectations, despite their 84.5 per cent surge in their NPAT at $160.5 million.
Fuel supplier Ampol
(ASX:ALD) sunk 4.8 per cent on their first-half earnings and their takeover deal. Their net profit on a replacement cost basis jumped 70.8 per cent to $205 million, while their bid for Z-Energy
(ASX:ZEL) included a $600 million equity issuance which wasn’t well received by shareholders. Shares in Z-Energy rocketed 14.5 per cent.
Real estate business McGrath
(ASX:MEA) jumped 3.8 per cent after their full-year revenue bounced from a $700,000 loss the year prior to a $18.3 million profit, thanks to a strong housing market.
Sonic Healthcare
(ASX:SHL) fell 2.8 per cent despite a 149 per cent climb in their net profit growth to $1.3 billion as Covid-19 testing volumes surged, however, dividend of 91 cents came in lower than expected along with reported profits. It fell short of market consensus.
Outdoor advertiser oOh Media
(ASX:OML) tumbled 4.6 per cent lower, after reporting a net loss after tax of $9.3 million compared to a $28 million from the same time the year before. Out-of-home advertising was hit as people stayed at home.
Local economic newsToday the weekly consumer sentiment report from ANZ and Roy Morgan is due. Also, the Bureau of Statistics is set to release counts of actively trading businesses. This includes rates of entry to and exit from the market sector of the economy, and rates of business survival.
Stock watchOur weekly stock to watch this week is Kogan.com
(ASX:KGN). David Thang, Senior Private Wealth Adviser at Sequoia
(ASX:SEQ) rates Kogan.com as a buy. From a technical angle, Kogan.com is bullish for several reasons.
Taking a step back, the share price has declined by almost 66 per cent as illustrated by the light-blue shade region. This is measured from the October 2020 all-time high of $25.57 down to the May 2021 low of $8.70. Positively, structural support was respected between the $8.70 and $9.10 region as shown by the horizontal-dotted line. Furthermore, a bullish doji formed in May 2021, which is the first sign of buyers coming to the party.
The current month of August has seen buying interest emerge. This is a positive development, and suggestive of higher levels to follow over the months ahead. Should this scenario evolve, then the next upside target zone is expected between $15.14 and $17.13 as shown by the orange rectangle.
This area of resistance is made up of the 38.2 and 50 per cent Fibonacci retracement levels respectively which are the horizontal grey lines, along with previous market structure at the $16.40 mark which is the horizontal dotted line.
Lastly, with reference to the Williams %R momentum oscillator (purple line on the lower pane). This oscillator has moved out from oversold territory, which signals a strengthening of upward momentum.
Shares in Kogan
(ASX:KGN) closed 0.8 per cent higher at $13.13.
Reporting seasonThere are 19 companies due to report today.
Alumina
(ASX:AWC), Ansell
(ASX:ANN), Austal
(ASX:ASB), Bingo
(ASX:BIN), Boral
(ASX:BLD), Estia Health
(ASX:EHE), Hub 24
(ASX:HUB), Kogan.com
(ASX:KGN), McMillan Shakespeare
(ASX:MMS), Monadelphous
(ASX:MND), Nanosonics
(ASX:NAN), Oil Search
(ASX:OSH), Pepper Money
(ASX:PPM), Reece
(ASX:REH), Scentre Group
(ASX:SCG), Seek
(ASX:SEK), Spark Infrastructure
(ASX:SKI), Viva Energy
(ASX:VEA) and Western Areas
(ASX:WSA) are slated.
Ex- dividendClass
(ASX:CL1) is paying 2.5 cents fully franked.
Domino's Pizza
(ASX:DMP) is paying 85.1 cents 70 per cent franked.
IPH
(ASX:IPH) is paying 15.5 cents 40 per cent franked.
Reckon
(ASX:RKN) is paying 3 cents fully franked.
Think Childcare
(ASX:TNK) is paying 8 cents fully franked.
IPOCulpeo Minerals
(ASX:CPO)Kuniko
(ASX:KNI)Commodities Iron ore has lost 2.7 per cent to US$136.71. Their futures suggest a 1.3 per cent fall.
Gold has gained $22.30 or 1.25 per cent to US$1806 an ounce while silver has added $0.54 or 2.34 per cent to US$23.70 an ounce.
Oil has surged $3.50 or 5.63 per cent to US$65.64 a barrel.
CurrenciesOne Australian Dollar at 7:40 AM was buying 72.16 US cents, 52.59 Pence Sterling, 79.15 Yen and 61.44 Euro cents.
Investor eventWe will see you today at our online event at 12.30pm (AEST). If you would like to make a last minute reservation, make your way to fnn.com.au to
register for your free spot.
DisclaimerThe views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Commentators may hold positions in stocks mentioned. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence
