Oil bounces off lows as Disney shares support Dow

 

Stocks fell Monday in a volatile session to start a short trading week due to the Thanksgiving holiday.

Fears that China may again ramp up Covid restrictions after reporting deaths from the virus weighed on markets, sending energy stocks and oil prices lower.

The New York Stock Exchange will be closed Thursday for Thanksgiving, and will have a shortened trading day on Friday. This week, traders will be digesting further speeches from Federal Reserve leaders as well as earnings reports from more retailers.

In Australia today – the Treasury will release a discussion paper on BNPL sector with multiple media outlets noting the Treasury paper will put forward its advice and thoughts on the sector with one of the options put forward requiring providers to obtain a credit licence – the sector has been on its knees for the last two years on the ASX – not sure this will help.

Overnight the S&P 500 shed 0.40% and the Nasdaq Composite fell 1%. The Dow Jones Industrial Average was relatively flat, though losses on the index were mitigated by a jump in Disney shares.

Shares of Disney rose more than 7% after the company announced that former CEO Bob Iger would return to the helm of the entertainment giant, replacing Bob Chapek immediately. Iger’s return to Disney ends a brief and rocky tenure for Chapek, who took over the CEO role in February 2020.

And Merck said on overnight it will acquire cancer drug developer Imago BioSciences Inc (IMGO.O) for a total equity value of $1.35 billion to expand its portfolio of blood disorder treatments.The offer of $36 per share in cash for Imago represents a nearly 107% premium to the company's last close.

Sectors were mostly higher today, with value a notable outperformer to growth. China tech and Macau-linked casinos sold off after weekend headlines showed higher new China cases and the first Covid-linked deaths since May.

Energy stocks were weaker, all adding to MTD declines on a volatile day for oil. Oil prices rebounded from a 10-month low on Monday after Saudi Arabia “categorically” denied a report that Opec was weighing an increase in output that would help to counteract the loss of Russian supplies. Brent crude, the international benchmark, slid as much as 6 per cent at one stage, before trimming its fall to 0.4 per cent

In other commodity news, Western supply of graphite will be constrained in the coming decade by the “opaque” market for the key battery material, the world’s largest natural graphite producer outside China has warned. Shaun Verner, chief executive of Australia’s Syrah Resources, a Tesla supplier that operates a huge mine in Mozambique, said that the graphite market’s lack of transparency over pricing was making bankers hesitant to fund new projects. “The single biggest impediment to new investment is the opaque nature of the market because to get the commercial debt in place is really challenging,” he added.

And China's aluminium imports fell by 33.9% in October from a year earlier primarily due to persistently weak demand and rising domestic output, as per Reuters report. Note that the demand for the light metal used in the transportation, construction, and packaging sectors has remained weak due to China's strict covid restrictions.

Currencies

One Australian dollar at 7:20 AM has weakened compared to the US dollar yesterday buying 66.03 US cents (Mon: 66.69 US cents).

Futures

The SPI futures are pointing to a 0.5 per cent gain.
 
Figures around the globe

Across the Atlantic, European markets closed lower. Paris shed 0.2 per cent, Frankfurt lost 0.4 per cent and London’s FTSE closed 0.1 per cent lower.

In Asian markets, Tokyo’s Nikkei added 0.2 per cent, Hong Kong’s Hang Seng dropped 1.9 per cent and China’s Shanghai Composite closed 0.4 per cent lower.

Yesterday, the Australian sharemarket lost 0.2 per cent to close at 7139.

Ex-dividends

Amcor PLC (ASX:AMC) is paying 19.44 cents unfranked
Sunland Group (ASX:SDG) is paying 60 cents fully franked
Tamawood (ASX:TWD) is paying 13 cents unfranked

Dividends payable

Clover Corp (ASX:CLV)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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