Markets at a glance 20 November

Leah Gibbons | nabtrade

Around the grounds

The Australian share market is lower in today’s trade as financials drag but the gold plays are mitigating losses. Diving into the detail, interest-rate sensitive financials have reversed yesterdays rise, while the miners are up nearly 1% and on track for a fourth straight session of gains after iron ore prices marched higher overnight as Chinese steelmakers started restocking to maintain production in January.

Gold stocks though are doing the heavy lifting, jumping as much as 1.3% in toady’s session to touch their highest level since early November, as mounting Russia-Ukraine tensions sparked a rush for safe-haven assets, bolstering bullion prices.

The gold sub-index is up 18.5% this year, as of last close.

On the currency docket, both the aussie and kiwi units are in rally mode, up for a fourth session as the U.S. dollar gave back a little of its recent bumper gains. The AUD is drawing some support from a steady outlook for interest rates after minutes from the Reserve Bank of Australia’s last meeting showed it was still vigilant to upside inflation risk.

Markets currently see just a 37% chance of a cut to the 4.35% cash rate in February, with an April move sitting at 58%. A 25bps easing is not fully priced in until May.

In the news

Elsewhere, shares of Australian listed PWR Holdings (ASX: PWH) are facing their worst session ever, if current losses hold, as the auto parts maker warns first half net profit after tax in fiscal 2025 will be lower than a year ago. The dip comes amid falling revenue in two key markets and high production costs. Including today’s move, the stock is down over 28% this year.

ASX-listed shares of Amcor (ASX: AMC) are also under pressure, as the company agrees to buy U.S-based peer Berry in an all-stock deal valued at $8.43 billion which will see Berry shareholders receive $73.50 per share, a near 10% premium to Berry’s last close.

AMC is up over 9% YTD, including today’s moves.

To the smaller end of town, shares of DGL Group (ASX: DGL) have sunk, as the speciality chemicals firm forecasts net profit to be lower in the current first half than the year-earlier but flagged a modest increase in revenue and gross margin for the half year. The stock is down nearly 34% YTD, including today’s move.

Finally, shares of Emeco Holdings (ASX: EHL) have surged over 7% as the business support service provider tips annual operating EBITDA will come in higher on a year ago, forecasting further improvement through the course of the fiscal year, reflecting what it calls improving utilisation rates.

The stock is up nearly 19% YTD, including today’s moves.

Going global

Rounding things out on the global stage, equities around the region remain on edge as tensions mount between Russia and the U.S. over Ukraine and investors sit on the sidelines ahead of Nvidia earnings. Tokyo’s Nikkei 225 is marginally lower while MSCI’s broadest index of Asia-Pacific outside of Japan is flat.

Russia lowers the threshold for a nuclear strike in response to a broader range of conventional attacks, approving the change after two U.S. officials and a source familiar with the decision said President Joe Biden’s administration has allowed Ukraine to use U.S.-made weapons to strike the Russian territory.

On the currency front, the big dollar has given back some recent gains, as safe-haven currencies like the yen and Swiss franc edged higher.  The greenback has had a stellar rally on growing expectations the US Federal Reserve may slow its path of interest rate cuts on concerns incoming President Donald Trump’s policies could reignite inflation.

Finally, US futures are back online pointing to a flat to positive start when the Wall Street session gets underway as investors eye third quarter earnings from AI darling Nvidia released tomorrow.

All prices and analysis at 20 November 2024.  The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.