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Musk continues Tesla share offload, Bitcoin hitting resistance

laptop and bitcoin

The S&P/ASX 200 closed at the lows of the day and fell as much as 0.7% on Wednesday, with consumer confidence sinking in some parts of Australia and data out of China indicating a slowing economy.

The Australian dollar is around US71.15c. Bitcoin is hitting resistance at the 200 day moving average on a daily chart around $US48,728. Brent crude futures slipped further below $US73.5 per barrel on Wednesday amid market uncertainties and growing concerns that supply growth will outstrip demand growth next year. WTI crude futures slipped further below $US70.5 per barrel and gold was just above $US1770, with expectations for an early US Federal Reserve rate hike. The Fed is holding its final meeting for the year and inflation is running hot, making analysts wary that there's pressure on the Fed to act more aggressively. The US producer prices index for November showed a year-over-year increase of 9.6%, the fastest pace on record and above the 9.2% expected by economists.

Treasurer Josh Frydenberg will forecast a deficit of $76 billion in the 12 months through June 2022, the median estimate of economists showed ahead of a mid-year update due Thursday, according to Bloomberg. That’s about a $30 billion improvement on the predicted shortfall in May’s budget.

The Westpac-Melbourne Institute Index of Consumer Sentiment for Australia declined 1% MoM to 104.3 in December 2021, amid mounting concerns around the newly emerging omicron variant and the continued circulation of COVID cases in the country. There was a clear difference in responses between the states hit hardest by the recent Delta outbreaks and the rest of Australia, with New South Wales and Victoria posting significant falls (down 3.6% and 3.5%, respectively), while sentiment was up in Queensland (3.4%), Western Australia (3.2%) and South Australia (7.1%). The issues that dampened consumer sentiment were inflation and interest rates, while assessment on the wider economy and employment remained positive, according to Trading Economics.

China’s economy slowed further in November, dragged down by a worsening property market slump and disruptions from repeated Covid outbreaks, which undercut consumer spending.

  • Santos upgraded to Outperform from Neutral at Macquarie
  • Stockland cut to Underperform from Neutral at Macquarie
  • Rio Tinto price target cut 1.3% to $80 by UBS
  • BHP price target cut 2.6% to $37 by UBS
  • CSL price target raised 1.7% to $343.70 at Jefferies
  • CSL upgraded to Buy from Neutral at Citi, price target raised to $340 a share, up from $325.

Wesfarmers says its proposal to takeover API is in shareholders' best interest and says it does not intend to accept any Woolworths offer for the pharmacy group. Wesfarmers has a 19.3% stake in API. Woolworths has made a $870m bid for API, owner of Priceline.

Gold miner Evolution Mining says it has completed the sale of its Mt Carlton mine to Navarre Minerals for up to $90 million. Evolution has received $26.5 million upfront and 176.6 million shares in Navarre. It stands to receive up to another $50 million in earnout payments linked to production and gold price targets.

Corporate Travel Management has flagged another acquisition with an enterprise value offer of $175 million for Helloworld’s corporate travel segment. It's in a trading halt pending a capital raising.

Insignia Financial (the former IOOF Holdings) has revealed ASIC has launched a regulatory action against its OnePath custody business. ASIC’s action relates to an investigation around the disclosure of adviser service fees and alleges that from December 2015 around $4.3 million in fees were improperly deducted from members’ accounts. Insignia said it is considering the matter and is committed to ensuring the custody group’s plan service fees are appropriately resolved.

Annuities business and asset manager Challenger has announced the appointment of Nick Hamilton as its new chief executive to succeed Richard Howes, whose retirement was announced in August. Mr Hamilton has been head of Challenger’s Funds Management business since 2019.

Overnight, the Dow Jones Industrial Average was 0.3% lower at the close, the S&P 500 was down 0.8% and the Nasdaq was 1.1% lower. Elon Musk continues to sell Tesla stock, with another $US906 million on Monday. Based on his 10% sale target, Musk could sell another $US5 billion before the year is out, for a total $US18 billion offload, according to CNBC. Tesla is trading at $US958.51.

The FTSE 100 was down 0 2%. The German Dax was down 1.1%.

Key events this week:

  • China releases November industrial output, retail sales data, Wednesday.
  • Fed rate decision, Wednesday.
  • U.S. business inventories, retail sales, empire manufacturing, Wednesday.
  • BOE rate decision, Thursday.
  • ECB rate decision, Thursday.
  • US housing starts, initial jobless claims, industrial production, Thursday.
  • BOJ monetary policy decision, Friday.
  • S&P Dow Jones Indices quarterly rebalance effective after markets close, Friday.
  • “Quadruple witching” day in the US market, when options and futures on indexes and equities expire, Friday.

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