What's Affecting Markets Today
US Markets log seventh consecutive week of gains
U.S. stock futures exhibited a subdued start on Monday, maintaining a marginal position after the three major indices secured their seventh consecutive week of gains. The Dow Jones Industrial Average achieved a fresh intraday record, while the Nasdaq 100 reached a new closing high. Futures linked to the Dow added 0.1%, with S&P 500 futures seeing a similar 0.1% uptick, and Nasdaq 100 futures edging up by 0.02%. The S&P 500’s prolonged weekly winning streak, the lengthiest since 2017, reflects a 3.3% monthly increase, while the Dow and Nasdaq boast 3.8% and 4.1% gains, respectively. Last week’s positive market sentiment followed the Federal Reserve’s indication of three anticipated short-term interest rate cuts in 2024 amid easing inflation. HSBC’s Max Kettner, however, urges caution, citing weak near-term growth and earnings expectations in the U.S. and drawing parallels to the 2017-2018 market rally’s subsequent disappointment. The economic agenda for the final full trading week of 2023 includes scrutiny of December’s business leaders survey and housing market index results.
PMIs show divergence between US and Eurozone
In December, U.S. flash PMIs signaled an uptick in economic momentum, driven by more accommodating financial conditions. The services sector, bolstered by increased demand and business activity, saw its PMI rise to 51.3, countering a dip in manufacturing to 48.2. The composite PMI nudged up to 51.0. In contrast, Eurozone PMIs heightened recession concerns, with the composite flash PMI dropping to 47.0, manufacturing to 44.1, and services to 48.1. Meanwhile, the UK sustained growth momentum, with services PMI expanding to 52.7 despite a cooling in manufacturing to 46.4. The data reflects divergent economic trends across key regions.
ASX Stocks
ASX 200 - 7,426 (-16.3 or -0.2%)
Key Highlights:
The Australian stock market saw a continued downturn as central bank officials tempered expectations of forthcoming interest rate cuts in the upcoming year. The benchmark S&P/ASX 200 index experienced a 0.2% decline, shedding 16.3 points to reach 7426.4 at close, with eight out of eleven sectors registering losses. The All Ordinaries also fell by 0.2%. The real estate sector, sensitive to interest rate changes, exhibited the most significant decline, plummeting by 1.3%. Notable contributors to this downturn included Vicinity Centres (down 2.1%), Mirvac (down 2.6%), and Dexus (down 2.1%).
In contrast, Adbri saw a substantial 31.9% surge after a buyout agreement was reached with CRH and major shareholder Barro Group, valuing the building materials company at $3.20 per share and totaling $2.1 billion. Link Group experienced a notable 27.1% increase following the announcement of Mitsubishi UFJ’s acquisition offer of $2.10 per share in cash, coupled with a dividend of 16¢, franked at 25%. Tabcorp witnessed a surge of 23.1% as it announced the retention of its exclusive license for retail wagering and betting in Victoria, effectively blocking international competitors, including Sportsbet. Neuren Pharmaceuticals also made headlines, reaching $22 after positive results from its Phase 2 trial, showcasing significant improvements in Phelan-McDermid Syndrome.
Leaders
ABC Adbri Ltd 31.72%
NEU Neuren Pharmaceuticals Ltd 25.96%
TAH Tabcorp Holdings Ltd 22.79%
RIC Ridley Corporation Ltd 5.34%
CXO Core Lithium Ltd 4.92%
Laggards
CMW Cromwell Property Group -4.76%
PRN Perenti Ltd -4.61%
NWH NRW Holdings Ltd -3.50%
AD8 Audinate Group Ltd -3.40%
ABB Aussie Broadband Ltd -3.31%