ASX holds gains for fourth day of rises, massive stag profit for Nuix
The ASX has finished the week with its fourth day of gains aided by banks, as Premier suffered a first strike and Nuix soared on debut.
Welcome to the Trading Day blog for Friday, December 4. Australia’s share market rose slightly in quiet trading before US non-farm payrolls data later Friday. Earliers Wall Street closed mixed, with the Dow up 0.3 per cent, the S&P 500 dipping 0.1 per cent and the Nasdaq gaining 0.2 per cent. Iron ore posted new seven-year highs and OPEC agreed to slow the pace of production increases. Locally, retail trade figures are out and intelligence software giant Nuix liste don the ASX.
Perry Williams 5.35pm: Victoria delaying emissions targets
The Victorian government is finalising emissions reduction targets for 2025 and 2030 after it delayed a decision earlier this year, blaming volatility caused by COVID-19.
The state’s energy minister Lily D’Ambrosio suggested the target could be released in the next month with its decision being closely tracked by the owners of brown coal plants, likely to face the most pressure from the policy move.
“It’s not far away. I won’t put a date on it but I do want to make it very clear to people our ambition is there and we will have interim targets for 2025 and 2030,” Ms D’Ambrosio told the Emissions Reduction Summit on Friday.
Victoria has a 50 per cent renewable target by 2030 and also aims to be net zero emissions by 2050. A decision on an interim emissions target was due to be set by March and tabled in Parliament by August.
However, in July it was delayed with Covid economic ructions cited as the reason.
The state has previously been linked to a reduction in pollution of between 45 per cent to 60 per cent by 2030 following recommendations from an independent expert panel chaired by former Labor minister Greg Combet.
Both Alinta Energy and EnergyAustralia - owners of the Loy Yang B and Yallourn coal plants respectively - have raised concerns over the future of Victoria’s brown coal plant should high emissions reduction goals be put in place.
4.35pm: ASX finishes week with another rise
Australia’s share market rose slightly in quiet trading before US non-farm payrolls data later Friday.
The S&P/ASX 200 closed up 0.3pc at 6634.1 - its fourth-consecutive daily rise - after hitting a six-day high of 6650.1.
Despite a late pullback on Wall Street after Pfizer halved its expected coronavirus vaccine rollout for 2020, the local market was supported by slight gains in US stock index futures.
There was also a switch back to the financials sector after it was used to fund an aggressive move into iron ore miners on Thursday.
Major banks rose 0.4 per cent to 1.3 per cent, Macquarie rose 2.3 per cent and Janus Henderson surged 7.2 per cent after Macquarie’s agreement to buy Waddell & Reed helped valuations for wealth managers.
But while the iron ore miners saw some intraday profit taking, BHP and Rio Tinto bounced back strongly through the day, gaining 0.6 per cent and 0.9 per cent respectively.
Whitehaven Coal continued to surge with an 8.1 per cent rise after reports late this week that China had allowed some Australian thermal coal to land after a recent ban on such imports.
ASX debutant Nuix limited opened at $8.50 - 60 per cent above its IPO price - before closing at $8.01.
2.28pm: New oOh CEO gets start date
Nova Radio chief Cathy O’Connor will commence her next role as CEO and managing director of oOh!media limited on January 11 2021, the advertising company has confirmed to the ASX.
oOh!’s founding CEO and managing director Brendon Cook will step down from the role on December 31 2020 but will continue working with the company in a consulting role until “at least the end of 2021.”
2pm: Financials rebound
Australia’s sharemarket is heading for its best close in the past 7 trading days.
The S&P/ASX 200 was up 0.5pc at 6650.1 amid a strong rebound in the heavyweight Financials sector.
A close today above 6636.38 points would be the best since Nov 25th when it also hit a 9-month high of 6713.3.
A rise today would also make it four up days in a row.
The index is 51pc above the year’s low of 4402.5 and 8 per cent away from the years’ high at 7179.2.
12.34pm: Nuix debuts with massive stag profit
Shares in analytics and intelligence software company Nuix have listed on the ASX at $8.50 - a 60 pre cent increase on the IPO price of $5.31.
The shares reached as high as $9 before dropping back to around $8.
The $1.8bn float is the largest IPO of the year.
Under the IPO the company raised $953m with $677.4m going to existing shareholders.
With 317.3m shares on issue the debut share price gives Nuix a market capitalisation of $2.7bn.
The largest sole shareholder will be Macquarie Group which funded Nuix through its venture capital arm, with a 30.1 per cent stake, giving it a value of around $900m.
Nuix co-founder Dr Anthony Castagna will hold 4.2 per cent through Blackall Limited, owned by Derlick Limited which maintains his retirement fund and Armitage investments holds 2.8 per cent.
Group CEO Rod Vawdrey holds a 0.5 per cent stake.
37.9 per cent of the shares on issue will be subject to escrow restrictions.
Nuix said in its prospectus that in the last financial year the company achieved $175.6m in revenue, up 25.9 per cent on the prior year and is expecting to make a $20m net profit after tax in FY21.
Eli Greenblat 12.26pm: Lew’s Premier suffers ‘first strike’
Premier Investments chairman and biggest shareholder, billionaire retailer Solomon Lew, has defended the company’s performance and that of its chief executive after a “first strike” against its remuneration report at the AGM.
He pointed to the retailer’s performance over the last decade as well as the leadership of its CEO, Mark McInnes, who navigated the company through tough conditions brought on by the COVID-19 pandemic.
In a statement after Premier Investments was slapped with a 48.51 per cent vote against its remuneration report, Mr Lew said it appeared the large “no” vote was driven by proxy advisers unhappy over Mr McInnes’ pay.
A second “strike” next year could open the way to a board spill.
Mr Lew, who owns 40.4 per cent of Premier Investments, strongly backed his CEO and his pay record, arguing Mr McInnes deserved his salary, especially for his management during the pandemic.
“It’s clear that we have suffered a first strike against our remuneration report, but it’s completely unclear to me how it can be justified in relation to the outstanding performance that our board, CEO and management team have delivered,” Mr Lew said.
“What is clear is that this strike has been driven by some proxy advisers. I would remind them that remuneration is meant to reward performance and align management and shareholder interests. The fiscal 2020 remuneration report details the bonus Mr McInnes received in 2020 due to the 2019 record underlying earnings being up 11.5 per cent.
“The quantum of this bonus was exactly the same as the prior year when Premier received a 96 per cent vote in favour of the remuneration report.”
Mr Lew added that where management teams deliver outstanding results, they should be rewarded for doing so.
12.06pm: ASX holds on to gains at lunch
The Australian share market has held on to most of a 0.4pc intraday gain in quiet trading ahead of US non-farm payrolls data later Friday.
The S&P/ASX 200 up 0.3pc at 6632 - on track for a 6-day high on a daily close basis - after hitting a four-day high of 6639.2 in early trading.
US stock index futures were slightly higher after a late pullback on Wall Street after Dow Jones reported that Pfizer has halved its 2020 coronavirus vaccine rollout target.
The Financials, Consumer Staples, Real Estate, Energy and Tech sectors were outperforming, while Health Care and Materials were notable laggards.
Fund managers were particularly strong after Macquarie agreed to buy Reed & Waddell, with Janus Henderson shares up 7pc.
Macquarie shares rose 2.4pc as brokers mostly reacted favourably to the deal it announced on Thursday.
Banks bounced back strongly with CBA up 1pc after the sector was sold on Thursday amid a move into resources stocks, particularly iron ore.
Iron ore miners appeared to be restrained by profit taking after exceptionally strong gains on Thursday, with BHP, Rio Tinto and Fortescue down 0.2-0.8pc.
11.34am: Retail sales exceed forecasts
Final October retail sales data have solidly beaten market expectations.
Retail sales rose 1.4pc versus -1.1pc expected, according to a Bloomberg survey of economists.
After dropping back to -4pc after the second wave of coronavirus in Victoria, retail sales in October rose at the fastest pace since July, according to the ABS.
The Australian dollar rose a few points on the news, to US74.43c.
11.20am: Tokyo stocks open lower
Tokyo stocks opened lower on Friday as a higher yen against the dollar weighed on the market, with investors awaiting key US jobs data due later in the day.
The benchmark Nikkei 225 index was down 0.31 per cent or 82.69 points at 26,726.68 in early trade, while the broader Topix index slipped 0.15 per cent or 2.63 points to 1,772.62.
AFP
Eli Greenblat 11.14am: Lew’s Premier facing ‘first strike’
Solomon Lew’s Premier Investments is facing a “first strike” against the adoption of its remuneration report at its AGM, as proxies lodged before the meeting show an overwhelming rejection of the resolution.
Chairman and major shareholder Solomon Lew displayed votes before the AGM which showed 34.39 million shares in favour of the remuneration report, but 32.64m against.
Mr Lew is the company’s biggest shareholder with a stake of 42 per cent in Premier Investments, and did not vote his shares on the remuneration report agenda item.
The sizeable “no” vote against the remuneration report easily clears the 25 per cent level to trigger a “first strike” on the remuneration report. A second strike next year would trigger a potential board spill.
Mr Lew would not comment at the AGM when asked which proxy advisers had recommended a vote against the remuneration report and why there was a large “no” vote.
At a later vote for the re-election of Mr Lew as a director of Premier Investments he received a 99 per cent vote in favour.
10.50am: MAAS jumps on ASX debut
Shares of construction materials, equipment and related services company, MAAS Group, opened at $2.40 on its ASX debut this morning.
In keeping with some other IPOs in recent days, the opening gain gave a handy stag profit of 20pc on the IPO price of $2.00.
It comes amid a buoyant local share market, with the S&P/ASX 200 up 0.3pc in early trading.
MGH was last trading at $2.39.
10.20am: ASX up despite mixed US market
Australia’s share market has risen slightly in early trading, despite a late fade on Wall Street, which ended mixed.
The S&P/ASX 200 rose 0.4pc to 6638.3 in the first 20 minutes of trade, bucking a late retreat in the S&P 500 on news that Pfizer won’t meet its planned coronavirus vaccine rollout target for 2020.
The market has been underpinned by the Real Estate, Energy, Financials, Communications, Industrials and Consumer Staples sectors, while Materials, Tech, Health Care and Consumer Discretionary are underperforming.
Thursday’s sharp move into iron ore miners and out of Financials has been partially unwound. on what looks like profit-taking before the weekend, given that the iron ore price hit a new seven-year high last night.
BHP, Fortescue, and Rio Tinto fell 0.4-0.7pc while the four major banks rose as much as 0.8pc and Macquarie jumped 2.1pc.
Ben Wilmot 10.19am: BGH declares Village bid final at $3
The long-running takeover battle for Village Roadshow is in its last days, with private equity suitor BGH Capital declaring its $586m schemes its final offer.
The company last month came back to the table with a sweetened offer of up to $3 per share for the famed leisure and entertainment company, after two major shareholders baulked at its initial lowball bid.
It won the support of local funds house Spheria and the takeover’s prospects now lie in the hands of US investor Mittleman Investment Management, which has a stake of more than 15 per cent, and which has argued against such a low valuation for the company.
The US house may have the sway on the register to defeat one proposed scheme at $3 per share but it may be unable to prevent a second scheme, in which the founding Kirby family and veteran former chief executive Graham Burke can vote, going through at $2.95 per share.
10.09: Westpac faces higher expenses
Morgan Stanley’s Richard Wiles warns that Westpac’s enforceable undertaking with APRA will add to Westpac’s expenses in FY21.
But he stays Overweight with a $20.40 target price.
Upside risks he sees include economic and loan growth recovery, better margins from home loans and lower funding costs, self-help initiatives oncosts, a better than expected loan-loss cycle and better capital and dividends.
Downside risks include the possibility of margin downgrades, higher-than-expected cost growth, lower retail bank profitability, higher loan losses due to the recent recession, delays in the dividend recovery and ongoing capital build requirements.
10.12am: Hitch for BetMakers takeover plan
BetMakers’ proposed $56.2m takeover of Sportstech’s racing and digital assets have hit a roadblock after a third party Standard General L.P. made an offer to acquire all of Sportstech.
“In its announcement to its shareholders Sportech has also advised that there is no certainty that a formal offer will be made as a result of this conditional proposal,” Betmakers said.
“BetMakers continues to have a binding agreement with Sportech with respect to the sale of the tote and digital business.”
10.10am: Marley Spoon CEO staying on
Meal kit provider Marley Spoon has announced it will renew its service agreement with its CEO and founder Fabian Siegel, who will serve in the role until December 31 2023.
He will be paid a gross salary of €480,000 ($783,708.88).
9.40am: Pfizer slashes vaccine rollout target
Pfizer expects to ship half of the COVID-19 vaccines it originally planned for this year because of supply-chain problems, but still expects to roll out more than a billion doses in 2021.
“Scaling up the raw material supply chain took longer than expected,” a company spokeswoman said. “And it’s important to highlight that the outcome of the clinical trial was somewhat later than the initial projection.” Pfizer and Germany-based partner BioNTech SE had hoped to roll out 100 million vaccines worldwide by the end of this year, a plan that has now been reduced to 50 million. The UK on Wednesday granted emergency-use authorisation for the vaccine, becoming the first Western country to start administering doses.
The two-shot vaccine also is being reviewed by the Food and Drug Administration in the US, where a similar authorisation could come later this month and a rollout before the end of the year. The US regulator also is considering a vaccine developed by Cambridge-based Moderna that could begin shipping before Christmas.
The doses are among an array of vaccines that have been developed this year as the coronavirus pandemic has raged across much of the world. Authorities estimate nearly 1.5 million people worldwide have died from the virus, including 273,836 in the US as of December 2.
Dow Jones
Perry Williams 9.33am: Woodside ups stake in Senegal venture
Woodside Petroleum has snapped up a further stake in the $US4.2bn ($5.7bn) Sangomar oil venture it controls in Senegal, after pre-emoting the distressed sale of Australian-listed producer FAR share to India’s ONGC Videsh.
The Perth producer will pay $US45m for FAR’s 13.67 per cent share of the project, after shelling out $US400m in August to thwart Russian oil giant Lukoil buying a 40 per cent stake in the development.
The latest deal hands Woodside an 82 per cent stake in Sangomar which it expects to eventually sell down to a 40 per cent holding by 2021.
Cutting its stake to 40 per cent would reduce capital spending on Sangomar by $US1.2bn, Woodside said at its recent annual investor day.
The Lukoil move was in part about “protecting shareholder interests” given the Russian producer was the subject of US sanctions which could introduce a fresh layer of political risk to Sangomar.
The offshore development, operated by Woodside, would be the first oil project in the West African country and is targeting production of 100,000 barrels a day of oil from early 2023.
Ben Wilmot 9.27am: HomeCo taps market for $125m
Property funds manager HomeCo is forging deeper into the hot health sector with a series of acquisitions to be backed by a $125m capital raising.
The company is bulking up in the area where others including Eleanor, Charter Hall and Barton have been active, playing into the chase for safe yield driven investments.
HomeCo’s institutional placement, via Goldman Sachs, is to be priced at $3.80 per share, a slim discount to its last price of $3.90, as investors re-rate the stock as a fund manager, rather than primarily an owner of repurposed former Masters sites.
9.23am: ASX likely quiet after Pfizer dampens Wall St
Australia’s share market looks set for a quiet session ahead of US non-farm payrolls data later Friday.
Overnight S&P/ASX 200 futures pared a 0.4pc intraday gain to close down 0.1pc after Dow Jones reported that Pfizer has halved its coronavirus vaccine rollout target for 2020 on supply-chain obstacles, although it still expects to ship more than a billion doses in 2021.
The S&P 500 finished down almost 0.1pc at 3666.7 after rising 0.4pc amid encouraging US jobless claims and services sector PMI data, along with oil price gains after OPEC+ agreed to gradually ease production curbs near year.
The S&P 500 Energy sector was strongest as WTI crude rose 0.8pc to $US45.66. While the S&P 500 Materials sector fell, spot gold rose 0.8pc to $US1844 and spot iron ore rose 0.6pc to a 7-year high of $US137.08 while base metals were mixed.
Interestingly the Pfizer news didn’t damp enthusiasm for the Australian dollar, which rose as much as 0.6pc from Thursday’s share market closing level, reaching a more than two-year high of US74.50.
The Australian dollar’s strength could again restrain non-resources offshore income earners due to the translation effect on earnings of a higher exchange rate.
Iron ore miners rose again last night with London-listed shares of BHP and Rio Tinto up 2.2pc and 2.7pc respectively and BHP ADR’s equivalent price closing 0.8pc above the Sydney close for BHP.
The Financials sector will potentially underperform again after the US 10-year bond yield fell 3bp to 0.906pc, although the previous day’s jump in bond yields did not help the Financials sector.
Financials would have been used as funding stocks for rapid switch to resources yesterday so they may tend to rebound as the rush for iron ore miners moderates.
Eli Greenblat 8.49am: Lew ‘optimistic’ after Premier records
Premier Investments chairman Solomon Lew says the company’s fashion brands posted record sales is the recent Black Friday and Cyber Monday events.
In a speech to the company’s AGM, Mr Lew says that for the first 18 weeks of the financial year the group achieved online sales 70 per cent above the same period in 2020, with record trading over the Black Friday and Cyber Monday weekend.
Premier owns a stable of fashion outlets like Just Jeans, Dotti, Portmans, Peter Alexander and stationery store Smiggle.
Mr Lew says the shift towards online shopping is benefiting the company, accounting for 70 per cent of growth in the second half of the last financial year, accounting for more than 25 per cent of total sales at a higher EBIT margin.
He was upbeat about the year ahead with the retailer’s heavy investment in technology proving invaluable, while Premier was also back to full employment of its staff after sending thousands of its workers home during the COVId lockdowns.
“Looking ahead, we are very optimistic. We have strong collections of wanted product for each of our brands, we have well managed inventory, and we have already seen a very positive customer response to this season’s products, with a willingness to spend as evidenced by our recent record Black Friday and Cyber Monday trading results.”
Mr Lew said this, together with the re-opening of borders in Australia and the recent re-opening of its stores in England gives the company reason to be optimistic during this all-important trading period.
“That said, this crucial season is not yet over, however we believe we are significantly better placed than our key competitors.”
8.44am: Regis defends bid rejections
Regis Healthcare chair Graham Hodges has sent a letter to investors explaining that the company is open to assessing takeover offers “is always open to considering proposals which offer compelling value for all Regis shareholders” despite rejecting two recent takeover bids.
Last month the company rejected a $555m takeover proposal from Washington H. Soul Pattinson and Ashburn and a $495m proposal from WHSP and Scott Farquhar’s Skip Capital.
Mr Hodges said the board believed the company was worth more and regarded these offers as “opportunistic” given the current scrutiny the aged care sector is receiving from a royal commision.
“We regarded both of these proposals as inadequate in terms of the prices offered,” he said.
“We also consider the proposals opportunistic given their timing in advance of positive commonwealth government policy reform and funding initiatives likely to follow from the findings and recommendations of the Royal Commission into Aged Care Quality and Safety.”
Regis Healthcare last traded at $1.85 a share, giving it a market cap of $556.44m.
8.30am: What’s impressing analysts?
Alumina cut to Sell: Morningstar
Cooper Energy started at Equal-Weight: Morgan Stanley
Kogan.com raised to Outperform: Credit Suisse
Macquarie Group raised to Hold: Morningstar
Qantas cut to Hold: Jefferies
Qantas cut to Neutral: Evans & Partners
Qantas target price raised 27pc to $6.20; Overweight rating kept: Macquarie
Qantas target price raised 30pc to $5.70; Neutral rating kept: Citi
ARB raised to Accumulate: Baillieu
Humm Group started at Outperform; $1.40 target price: Macquarie
Ramelius started at Outperform: $1.90 target price: Macquarie
8.15am: ASX to edge down after US ends mixed
Australian stocks are set to open slightly weaker after US stocks lost momentum in late trade to end mixed, even as US jobless claims declined.
Shortly after 8am (AEDT) the SPI futures index was down seven points, or 0.1 per cent.
Yesterday, the ASX closed higher as iron ore miners surged.
After its climb to a six-year high yesterday, iron ore rose 0.8 per cent to a new seven-year high of $US137.80 a tonne.
Brent oil is up 1.0 per cent to $US48.71 after OPEC agreed to slow the pace of production increases.
The Australian dollar was at US74.4, its highest level since 2018.
8.05am: Wall Street fades, closes mixed
US stocks were mixed as weekly jobless claims declined and investors looked ahead to Friday’s monthly jobs report.
The S&P 500 was down 0.1 per cent as of the close of trading in New York, a day after the broad-market index closed at another all-time high. The Dow Jones Industrial Average added 87 points, or 0.3 per cent. The Nasdaq Composite rose 0.2 per cent.
US stocks lost some momentum after Pfizer said expects to ship half of the COVID vaccines it originally planned for this year because of supply-chain problems, but still expects to roll out more than a billion doses in 2021.
The S&P 500 has repeatedly eked out fresh records on the back of investors’ optimism that Covid-19 vaccines will accelerate the economic rebound next year. But rich valuations for stocks and elevated infection levels are tempering some of that cheer, leading to a more subdued move upward in recent days.
Weekly jobless claims, seen as a proxy for layoffs, dropped to 712,000 for the week ended November 28. That was lower than economists had expected, reflecting a moderate improvement in the pace of recovery of the labor market. The monthly jobs report will be released tonight (AEDT).
Meanwhile, activity in the US services sector expanded for the sixth straight month in November, a sign that activity held up despite the rise in Covid-19 cases, IHS Markit data showed Thursday.
Shares of airlines, cruise operators and small companies -- sectors that have benefited from enthusiasm about a vaccine -- outperformed the broader market.
The US dollar weakened against a basket of currencies, with the ICE U.S. Dollar Index declining 0.4pc to the lowest since April 2018.
Overseas, the pan-continental Stoxx Europe 600 was little changed.
In Asia, most major benchmarks ended the trading session higher. The Shanghai Composite Index edged down 0.2pc by the close. American lawmakers on Wednesday approved legislation that could result in a trading ban on the shares of U.S.-listed Chinese companies over concerns about their audit quality.
Dow Jones Newswires
7.55am: Wall Street loses momentum
US stocks lost some momentum after Pfizer said expects to ship half of the COVID vaccines it originally planned for this year because of supply-chain problems, but still expects to roll out more than a billion doses in 2021.
The Dow Jones Industrial Average was trading up 0.3 per cent, but off its best levels, the S&P 500 index traded 0.2 per cent lower, off its intraday high, while the Nasdaq Composite Index was up 0.3 per cent.
Dow Jones
6.50am: Fonterra raises farmgate milk price forecast
Dairy exporter Fonterra Cooperative Group raised its forecast payment to New Zealand farmers as demand from China boosts whole-milk powder prices.
The midpoint of Fonterra’s forecast range for the current 2020-21 production season was lifted to $NZ7.00 per kilogram of milk solids from $NZ6.80, the company said.
“China is continuing to recover well from Covid-19 and this is reflected in recent Global Dairy Trade auctions with strong demand from Chinese buyers, especially for whole milk powder,” Fonterra said.
Dow Jones Newswires
6.30am: Oil prices rise after OPEC deal
OPEC will gradually increase production starting in January as part of a compromise meant to allow its members to benefit from rising prices without flooding the market.
Instead of adding 2 million barrels a day to production -- or a little more than 2pc of global production -- the Organization of the Petroleum Exporting Countries and its allies, including Russia (known as OPEC+), will add 500,000 barrels a day. In subsequent months, the cartel will review that rate and may increase production more, depending on demand.
So far, traders seem optimistic about the deal. Brent crude futures, the international benchmark, rose 1.2pc, to $US48.83 a barrel. West Texas Intermediate futures rose 1pc, to $US45.75 a barrel. West Texas oil has rallied in recent weeks, climbing to the mid $US40s from the high $US30s. That has vaulted many industry stocks at least 10% higher, on expectations that they can earn positive free cash flow with prices at these levels.
The decision was “reasonable, logical, economically sensible, even inevitable, yet difficult to arrive at,” wrote Andy Brogan, global oil and gas leader at EY. “If they didn’t, supply would soon outstrip demand and add to already swelling inventories. We saw this in the spring and it didn’t go well.”
Analysts had been expecting that OPEC would delay its production increases for a few months. But some OPEC members balked at keeping production low, given that prices have improved and they would like to make more money. That raised concerns that OPEC would ramp up production and inundate the market with oil, causing prices to crash. Oil prices slipped on Tuesday as it became clear that the group would not come to an easy answer.
Dow Jones
5.55am: Warner Bros in dramatic streaming switch
AT&T Inc.’s Warner Bros. will release its entire 2021 slate of theatrical films simultaneously in theaters and on its HBO Max streaming service, the studio said, taking the most drastic step yet in eliminating the exclusivity theater chains have enjoyed for decades.
Warner Bros. movies will play on HBO Max during their first month of theatrical release before leaving the service while staying in theaters.
The hybrid model will apply to all of Warner Bros. films next year, from smaller-scale releases to big-budget movies that traditionally require gargantuan box-office sales to turn a profit. That includes the science-fiction adaptation “Dune,” a movie version of the musical “In The Heights” and a new installment of the “Matrix” franchise.
Warner Bros. last month said it was going to release “Wonder Woman 1984” on HBO Max Christmas Day for a month at the same time the movie went into theaters. The announcement Thursday covers 17 films that are scheduled for release next year.
“It’s threading a needle in the middle of a pandemic,” said Carolyn Blackwood, the studio’s chief operating officer. “We weren’t comfortable sitting on our hands or punting these movies into oblivion.”
The decision is sure to jolt a Hollywood in the midst of overhauling how it makes and distributes films. With a majority of theaters closed in the U.S., studios have shifted focus to their streaming operations, where subscriptions are the key metric of success. That has meant some of the year’s biggest releases have premiered in the living room, a shift that could outlast the pandemic and spell economic ruin for theater owners desperate to reopen.
Dow Jones Newswires
5.20am: OPEC and allies agree lower production hike
Members of the OPEC group of oil producers struck a deal to increase production over coming months, but by less than anticipated in their previous accord.
“It has been decided to increase the amount of oil offered to the market from January 2021, with a total increase from OPEC+ countries of 500,000 barrels per day,” the Kazakh energy ministry said in a statement at the end of videoconference of countries in the OPEC+ club.
The previous agreement entailed a cut of 7.7 million barrels per day (bpd) and had been scheduled to be eased to 5.8 million bpd on January 1.
The videoconference meeting of the OPEC+ grouping comes after three days of inconclusive discussions among the 13 members of OPEC proper.
The first wave of the coronavirus pandemic sent oil demand -- and prices -- plummeting in the spring, with the benchmark American contract even going into negative territory for the first time in history.
After tough negotiations in April, OPEC+ -- which includes Russia -- agreed on drastic production cuts in order to try to put a floor under oil prices.
Despite hitting producers’ revenues hard, those cuts did help drag prices back up again.
However, the second wave of the pandemic has dashed hopes of a rapid “V-shaped” recovery for the economy and for oil demand.
After falling slightly in early trading, prices for both the US crude oil benchmark West Texas Intermediate (WTI) and Europe’s Brent North Sea were holding steady just after the start of the OPEC+ meeting, at $US45.30 and $US48.36 respectively.
A recent surge in crude prices -- up by 25 per cent over the course of November -- together with positive news from several companies on coronavirus vaccines meant some countries were left sceptical of the need for further sacrifices.
AFP
5.15am: US stocks edge up
US stocks drifted higher as weekly jobless claims declined and investors looked ahead to Friday’s monthly jobs report.
In lunchtime trade the S&P 500 edged up 0.1 per cent a day after the broad-market index closed at another all-time high. The Dow Jones Industrial Average added 0.5 per cent. The Nasdaq Composite rose 0.3 per cent.
The S&P 500 has repeatedly eked out fresh records on the back of investors’ optimism that COVID-19 vaccines will accelerate the economic rebound next year. But rich valuations for stocks and elevated infection levels are tempering some of that cheer, leading to a more subdued move upward in recent days.
Weekly jobless claims, seen as a proxy for lay-offs, dropped to 712,000 for the week ended November 28. That was lower than economists had expected, reflecting a moderate improvement in the pace of recovery of the labour market. The monthly jobs report will be released on Friday.
Meanwhile, activity in the U.S. services sector expanded for the sixth straight month in November, a sign that activity held up despite the rise in COVID-19 cases, IHS Markit data showed.
“Markets have been driving higher, seeing 2021 as the year economies will snap back,” said Peter Dixon, an economist at Commerzbank. “There is concern a lot of the good news is already priced in, so I don’t expect markets to go shooting into the stratosphere any time soon, but we could see a general grind higher.”
Shares of airlines, cruise operators and small companies -- sectors that have benefited from enthusiasm about a vaccine -- outperformed the broader market on Thursday.
Boeing jumped about 7.4pc in recent trading and was on track for its highest close since March. The Russell 2000 of small companies advanced 1.1pc.
Overseas, the pan-continental Stoxx Europe 600 was little changed.
In Asia, most major benchmarks ended the trading session higher.
The Shanghai Composite Index edged down 0.2pc by the close. American lawmakers on Wednesday approved legislation that could result in a trading ban on the shares of U.S.-listed Chinese companies over concerns about their audit quality.
Dow Jones Newswires
5.07am: OPEC+ cuts deal for lower production hike
The OPEC+ group of oil producing countries and their allies have struck a deal to increase production from January, but by less than anticipated in their previous accord, the Kazakh energy ministry said.
“It has been decided to increase the amount of oil offered to the market from January 2021, with a total increase from OPEC+ countries of 500,000 barrels per day,” the ministry said in a statement at the end of videoconference of countries in the OPEC+ club.
AFP
5.05am: Buffett meeting going virtual again
The Woodstock for Capitalists is going virtual again in 2021.
For the second consecutive year, tens of thousands of Berkshire Hathaway shareholders will not be flocking to Omaha, Nebraska, for an early May weekend of steak dinners, shopping discounts, and in-person investment wisdom from Warren Buffett and Charlie Munger.
Instead, Berkshire has scheduled a virtual annual meeting for May 1, 2021, which will be live-streamed by Yahoo in a similar format to the virtual 2020 meeting.
“Unfortunately, we do not currently believe it will be safe at that time to hold a meeting with nearly 40,000 attendees as we last did in 2019,” Berkshire said in a statement on Thursday. “We hope that the 2021 meeting will be the last time that shareholders are unable to attend in person. We look forward to 2022 when we expect to again host shareholders in Omaha at our usual large gala.”
The carnival-like event usually draws more than 30,000 people to Omaha, filling the city’s hotels and restaurants as well as the arena at CHI Health Center Omaha and its adjacent exhibition hall, where Berkshire companies typically operate booths highlighting their products.
Dow Jones
5.01am: Cocoa growers fight chocolate giants
Cocoa farmers in Ivory Coast escalated a media campaign against multinational chocolate makers, threatening them with a boycott in a dispute over payment.
Four major farmers’ organisations, known by their initials FOPCC, ANACACI, APROPAM and FNFPCC, fired a verbal broadside after meeting with Ivory Coast’s commodities board, the Coffee Cacao Council (CCC).
“We will boycott the activities of all corporations which oppose the living income differential (LID)”, they said, referring to a scheme of premium payments at the heart of the row.
Under the LID, multinationals pay a premium of $US400 above market price for each tonne of cacao, the raw material for chocolate.
Millions of small farmers in Ivory Coast and Ghana, which together grow 60 per cent of the world’s cacao, live in grinding poverty.
The heads of the four organisations said they were suspending their role in certifying that cacao meets ethical standards of sustainability and child labour -- programs that are a valuable image boost for chocolate makers in western markets.
They even waved the threat of stopping growing cacao.
“It’s a question of survival. We are ready to go right to the very end. We can put our cacao production on hold for a year or two and grow other crops,” said Soro Penatirgue, president of the National Association of Ivory Coast Agricultural Cooperatives, or ANACACI.
AFP
5.00am: US lifts, Europe mixed, as Boeing shares take flight
Wall Street’s main stock indices pushed higher after Ryanair confirmed a major order of Boeing 737 MAX jets.
The deal for 75 of the planes by the Irish low-cost carrier was the first major order for the 737 MAX since the aircraft was grounded for 20 months following two fatal crashes.
The news, along with a successful test flight by American Airlines, help send shares in Boeing higher as the aircraft moves closer to returning to the skies after winning approval by US regulators last month.
Shares in Boeing surged 7.4 per cent higher.
In late morning trading, the Dow was 0.6 per cent higher, with the S&P 500 pushing further into record territory.
Sentiment was also helped by movement towards a new stimulus package. Speaker Nancy Pelosi threw her support behind a $908-billion compromise virus relief package proposed by a bipartisan group of lawmakers on Tuesday. The proposal is however half what Democrats had previously been pushing for.
The eurozone’s equity markets slipped on survey data indicating the region’s economy continued to be battered by coronavirus fallout.
In eurozone trades, Frankfurt’s DAX 30 index shed 0.5 per cent and the Paris CAC 40 dropped 0.2 per cent.
Data provider IHS Markit said its closely-watched composite eurozone purchasing managers’ index (PMI) fell to 45.3 points in November from 50 in October, according to final estimates.
Britain’s services PMI dropped to 47.6 from 51.4. A level below 50 points indicates contraction.
Nevertheless, London’s FTSE 100 managed a 0.4 per cent gain thanks to a good performance by international mining stocks.
AFP
4.58am: Boeing picks up 737 MAX order from Ryanair
Boeing picked up its first major order for the 737 MAX since the aircraft was grounded for 20 months following two fatal crashes as Irish no-frills airline Ryanair signed a deal to acquire 75 of the planes.
The order was a sign of confidence in the aircraft which is moving towards a return to service following approval by the US Federal Aviation Administration (FAA) last month.
“Ryanair ... today signed a purchase agreement with Boeing for 75 new MAX-8200 aircraft,” the carrier said in a statement announcing the carrier was converting options for jets worth $US7.0 billion (5.8 billion euros) at list prices.
The announcement brings the Dublin-based company’s total order to 210 737 MAX aircraft with a total value of over $US22 billion, it added.
“This has been a real partnership between Ryanair and Boeing,” said Ryanair Chief Executive Michael O’Leary in a press conference unveiling the deal.
He meanwhile expressed confidence that COVID-19 vaccines would aid the aviation sector’s recovery next year, following the global health emergency that had decimated international demand for air travel.
Ryanair’s order follows a near two-year grounding of the jet after two fatal crashes that together killed a total of 346 people.
The MAX aircraft had been a cash cow for Boeing prior to the fatal Lion Air and Ethiopian Airlines crashes in 2018 and 2019 respectively.
AFP
4.55am: Worsening pandemic chills US service sector
The US service sector saw activity continue to grow but at a slower rate in November, according to a survey, as the country struggles with a rapidly deteriorating COVID-19 pandemic.
The Institute for Supply Management’s (ISM) services index was at 55.9 per cent last month, slightly worse than expected and its second month of slowdown after October’s 56.6 per cent reading.
ISM survey chief Anthony Nieves said, “Most companies are cautious as they navigate operations amid the pandemic and the aftermath of the U.S. presidential election.” The sector remained above the 50-percent threshold indicating expansion, but analysts warned the second consecutive monthly decrease could mean the sector is in for a renewed, pandemic-fuelled downturn, after contracting sharply when COVID-19 first struck the United States.
AFP
4.50am: CEO pay weathers pandemic
Even as the pandemic roils the American economy, compensation for US chief executives has largely held up as many corporations adjust their criteria for performance pay and bonuses during the crisis.
Only about one-fifth Russell 3000 index of publicly traded firms have reduced CEO pay, according to data compiled by the Conference Board with the consultancies Semler Brossy and Esgauge.
Corporate boards have opted for generous packages for executives at the top even when, in many cases, firms have been laying off workers.
For CEOs, “it’s heads I win, tails I don’t lose,” said Jesse Fried, a Harvard Law School professor specialising in executive compensation.
Fried said boards of directors appear to be willing to make adjustments to compensation criteria when it results in a boost for CEOs, but rarely will cut pay.
AFP
4.45am: New US jobless claims drop
New applications for US jobless benefits fell to 712,000 last week, a better-than-expected decline of 75,000, the Labor Department reported.
The four-week average for initial claims also dropped by 11,000, according to the weekly data.
The report showed that through the week ended November 14, 20.2 million people continued to receive some form of unemployment benefit -- a decline of about 350,000 -- including under special programs passed during the pandemic, many of which are set to expire.
AFP
4.40am: OPEC and allies meet on cuts deal
The members of the OPEC group of oil producers are meeting with their allies today (AEDT) to see if they can reach an accord on extending production cuts over the coming months.
The videoconference meeting was pushed back from Tuesday and comes after three days of inconclusive discussions among the 13 members of OPEC proper.
Observers say the postponement points to an agreement being harder to reach than initially thought.
The first wave of the coronavirus pandemic sent oil demand -- and prices -- plummeting in the spring, with the benchmark American contract even going into negative territory for the first time in history.
After tough negotiations in April, OPEC+ -- which includes Russia -- agreed on drastic production cuts in order to try to put a floor under oil prices.
Despite hitting producers’ revenues hard, those cuts did help drag prices back up again.
However, the second wave of the pandemic has dashed hopes of a rapid “V-shaped” recovery for the economy and for oil demand.
Most producers, including OPEC kingpin Saudi Arabia, therefore favour an extension of the current agreement, which entails a cut of 7.7 million barrels per day (bpd) and was scheduled to be eased to 5.8 million bpd on January 1.
AFP
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