The ASX cared little for Wall Street’s overnight rally, with the S&P/ASX200 lowering its colours by 34.10 points or 0.48% to 7,042.40.
The index has lost 2.15% for the last five days but is virtually unchanged over the year to date.
Bottom-performing stocks in this index are Genesis Minerals (ASX:GMD) Ltd and Sayona Mining Ltd down 7.19%and 5.38% respectively.
IG Markets analyst Tony Sycamore said, “From the opening bell this morning, it was clear that the ASX200 was in no mood to slavishly follow Wall Street higher as it has done most Tuesdays in recent months.
"This sentiment was reinforced as US yields rose to fresh highs, causing equity futures to give back all their overnight gains and more.
“With just three full trading days left in September, the ASX200 is down 1.09% MTD, on track for its second consecutive monthly fall. However, the soft performance at an index level dwarfed by falls in the interest rate-sensitive ASX Real Estate and IT sectors, down over 5% in September.
"Investors may be thanking their lucky stars that September is coming to an end."
Moomoo market strategist Jessica Amir noted: “This September, global markets have seen their biggest monthly pullback since December 2022, with the US benchmark index, the S&P500 down 4.2%, the Nasdaq 100 shed 5.2% and Australia's benchmark index, the ASX200 is 3.6% lower (month to date).”
According to Amir, there are some major drags including global chip maker giant, Nvidia, which is down 16%, with Australia's second biggest lithium company Allkem Ltd (ASX:AKE, OTC:OROCF, TSX:AKE) down 17% and global payment business Block down 22% month to date.”
“Is now the time to lean into the Warren Buffett adage: ‘be fearful when others are greedy and greedy when others are fearful', or should investors be asking to be woken up when September ends? Up to individual investing style, but remember this pull-back is forecast to ease during October,” Amir said.
Amir did have some good news and it wasn’t, depending on your sway, the resignation of Victorian Premier Dan Andrews.
The good news has to do with wheat and chicken.
Chicken eaters can rejoice as the market strategist said in her weekly commentary that global wheat prices had fallen by 30% and chicken producers such as Inghams were now well placed to be discounting the cost of a chook.
“70% of the cost of growing a chicken is wheat so it’s likely we will be seeing the cost of poultry and livestock drop too — great news for Australians looking forward to a hearty Christmas dinner at the end of a gruelling year.”
The news gets worse for Qantas
Analysts at Citi are forecasting heavy headwinds for Qantas Airways (ASX:ASX:QAN) Ltd in the coming year.
Growth is questionable in 2024.
"In another environment, regulation fuel headwind would be easy to look through. However, the willing absorption of costs perhaps might be a potential sign that recent public issues are/can leak into earnings," Citi's note states.
Shares were down nearly 2% today hitting a 12-month low of $5.06 in early trading as Qantas pilots turned on chair Richard Goyder and the board. Adding to the fire, Qantas will make an additional $80 million investment on customer fixes and warned of a $250 million hit in fuel-related costs for the first half.
Citi has downgraded its price target to a neutral $6 from $6.95.
"Looking forward, the company (at least on paper) appears to be balancing the recovery of higher costs with the importance of affordable travel in this environment and appearing to show what may be the first sign that recent negativity/politics can impact earnings," Citi said.
“Less than four months after guiding that FY23’s ~$4.5 billion would be the structurally higher earnings base, it appears FY24 growth may already be under question."
Citi expects a sharp fall in oil prices early next year, but still cut its Qantas' FY24 earnings estimates by 7%.
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