European equity markets finished lower on Monday, but off to the worst levels. US equity futures higher with US markets closed for the Labour Day holiday today.
In Australia today, we have the RBA announcement at 2.30pm with the RBA expected to raise the cash rate by another 50 bp to 2.35 per cent. Economists argue the pace of tightening is set to slow to 25 bp increments following September’s meeting.
In Europe, energy prices continued to surge after Russia halted its biggest natural gas pipeline to the continent indefinitely, plunging the region deeper into a crisis that could push major economies into recession and force rationing. Benchmark gas futures jumped as much as 35 per cent, the most in almost six months, and electricity prices increased.
The situation is fueling concern among European ministers, who are set to discuss special measures this week to avert a deeper crisis. Germany announced a €65B package to help firms and households. The UK government also expected to outline fresh action in the next week or so. Some discussion in the press about how the energy crisis risks worsening Europe’s downturn at the same ECB ramps up rate hikes.
Coal remains an alternative for the Europe as dormant coal power plants are restarted , this has seen benchmark coal price rise 7.6 per cent recently , about three times the price of a year ago.
For Australia, one of our biggest commodity exports has surged to record levels as a result of the energy crisis, with the price of Newcastle coal soaring to all-time highs as miners cash in amid a deepening energy crisis in Europe. The price of thermal coal rose to a new high recently with Newcastle futures trading above $US440 ($648) a tonne, more than doubling since the start of 2022. Australian coal producers have been the market star performers year to date – with Whitehaven +225 per cent Stanmore Resources 144 per cent & Teracom up 450 per cent.
In M&A news, CVS Health has reached a deal to acquire in-home health-care company Signify Health for about $8 billion, the companies said Monday. CVS said it will pay $30.50 a share in cash for Signify, an acquisition that would build on its growing health-care services. Signify provides technology and analytics to help with in-home patient care. The deal comes as competitors from Amazon to Walgreens are moving further into the health-care sector. In July, Amazon announced it was acquiring primary-care provider One Medical for about $3.9 billion.
And in China some 60 million people are facing more Covid lockdowns. The country is becoming increasingly isolated as the rest of the world largely abandons restrictions. It’s also suffering economically — nearly three years of scattered lockdowns have disrupted exports and sent unemployment soaring, especially among young people. Chengdu, which is facing an indefinite lockdown, experienced panic buying and anger on social media. Its Covid testing system, tasked with swabbing all 21 million residents every day, recently collapsed. President Xi has staked his claim on “zero Covid,” framing it as proof of the Communist Party’s strength.
Currencies
One Australian dollar at has strengthened slightly compared to the US dollar yesterday, buying 68.02 US cents (Mon: 67.86 US cents), 59.05 Pence Sterling, 95.63 Yen and 68.51 Euro cents.
Commodities
Iron ore futures are pointing to a 2.2 per cent gain.
Gold lost $1.40 or 0.1 per cent to US$1721 an ounce.
Silver was up $0.14 or 0.8 per cent to US$18.02 an ounce.
Copper added $4.50 or 1.3 per cent to US$345.85 a pound.
Oil gained $1.95 or 2.2 per cent to US$88.82 a barrel.
Futures
The SPI futures are pointing to a 0.1 per cent gain.
Figures around the globe
Across the Atlantic, European markets closed mixed. Paris fell 1.2 per cent, Frankfurt dropped 2.2 per cent and London’s FTSE closed 0.1 per cent higher.
Asian markets closed mixed. Tokyo’s Nikkei lost 0.1 per cent, Hong Kong’s Hang Seng fell 1.2 and China’s Shanghai Composite closed 0.4 per cent higher.
Yesterday, the Australian sharemarket added 0.3 per cent to 6852.
Ex-dividends
There are 12 companies set to trade without the right to a dividend.
BlueScope Steel (ASX:BSL) is paying 25 cents unfranked
CSL (ASX:CSL) is paying 167.6613 cents 10 per cent franked
Clinuvel Pharmaceut (ASX:CUV) is paying 4 cents fully franked
Engenco (ASX:EGN) is paying 1.5 cents 64 per cent franked
Lynch Group Holdings (ASX:LGL) is paying 6 cents fully franked
Nickel Industries (ASX:NIC) is paying 2 cents unfranked
Northern Star (ASX:NST) is paying 11.5 cents fully franked
Origin Energy (ASX:ORG) is paying 16.5 cents 75 per cent franked
Sonic Healthcare (ASX:SHL) is paying 60 cents fully franked
Super Retail Group (ASX:SUL) is paying 43 cents fully franked
TPC Consolidated (ASX:TPC) is paying 10 cents fully franked
Veem (ASX:VEE) is paying 0.21 cents unfranked
Dividends payable
There are four companies set to pay eligible shareholders today.
Bell Financial Group (ASX:BFG)
GWA Group (ASX:GWA)
Magellan Financial Group (ASX:MFG)
WOTSO Property (ASX:WOT)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.