Markets at a glance 13 January
Around the grounds
The S&P/ASX 200 has started off the week on shaky ground, on track for its third day of loses after a blockbuster US jobs report all but took another rate cut from the FOMC off the table. Futures now point to less than a 10% chance there will be more than one US rate cut in the year ahead, according to the latest CME Fedwatch Tool.
That shift lit a fire under the US dollar, sending it to a two-year high against a basket of its peers, and saw the Australian unit languish to a near five-year low.
Back to the market, nine of the ASX’s 11 sectors are lower, the tech sector is bearing the brunt of the sell-off, down nearly 2.5% with financials down nearly 2%. Miners meantime have recovered some of the earlier losses to trade relatively flat, while utilities and energy are bucking the broader trend to trade higher.
Looking ahead, it’s all eyes on Thursday’s unemployment data for any clues on the Reserve Bank of Australia’s path of policy. A bumper number could defer any plans for a rate cut. NAB is calling for a slight uptick in the unemployment rate to 4%, in line with consensus.
In the news
Getting to some of the stocks to watch in today’s trade. Australian listed shares of Premier Investments (ASX: PMV) have tumbled, eyeing their worst session in nearly five years after the Australian retailer forecast weaker first-half results as customers both here at home and globally continue to struggle with rising costs of living.
Shares of Myer (ASX: MYR) have sunk to a two-month low, down at one stage nearly 19%, their biggest intraday percentage loss since September 2020. This after the department store owner said operating gross profit was down on PCP with total annual sales so far this year down nearly 1% on the previous year.
In the gold space, shares of St Barbara (ASX: SBM) have slumped as the company reports sales for the December quarter were lower on the previous year, with a warning production for the full year will be at the lower end of guidance. The stock gained 7.1% last year.
A different story for shares of Australian listed Woodside Energy (ASX: WDS), up to touch a three-month peak, rising in tandem with oil prices following expectations of wider U.S. sanctions to curb Russian exports to top buyers China and India.
Finally, to M&A activity. The takeover tussle for Insignia Financial (ASX:IFL) is ramping up as Bain Capital ups its offer to AU$2.87 billion, bringing it inline with rival CC Capital’s bid. Under the revised offer, Insignia shareholders will receive AU$4.30 per share, a 7.5% premium to Bain’s earlier offer and a 4.4% premium to the shares last closing price.
Last week, U.S.-based investment manager CC Capital Partners offered to buy Insignia for AU$2.87 billion just days after the company rejected Bain’s initial offer, citing it did not provide fair value to shareholders.
Shares of IFL surged to an over three-year high on the back of the move.
Going global
Rounding things out on the global stage, shares around the Asian region have slipped after that strong payrolls report state side saw bond yields surge with investor caution on lofty equity valuations ahead of earnings season.
A holiday in Japan has seen thin trading around the region, with the MSCI’s broadest index of Asia-Pacific shares outside Tokyo lower, while Nikkei futures were also trading lower. South Korean stocks have eased, as the political situation remains in flux ahead of a Constitutional Court hearing set to begin tomorrow to decide if impeached president, Yoon Suk Yeol, will be removed form office or reinstated.
US futures meantime are back online with both the S&P and Nasdaq to open marginally higher after Friday’s pull back when trading gets underway on the Wall Street session.
Finally, to the currency trade and the big dollar is steady against the yen, though off a six-month top amid reports the Bank of Japan may revise up its inflation forecasts this month, which could lead to interest rate hikes. Sterling is sitting near a 140month low, as sentiment continues in the doldrums after a recent rout in the gilt market amid concerns the Labour government would have to borrow more to fund spending pledges.
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