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Topic:Stock Market
The ASX has followed Wall Street's lead higher despite the big miners being sold off.
In corporate news, wealth manager Insignia Financial has jumped on a second takeover bid in three days, from another US private equity firm.
Follow the day's financial news and insights from our specialist business reporters on our live blog.
Disclaimer: this blog is not intended as investment advice.
By Stephen Letts
Prices current around 10:20am AEDT
Live updates on major ASX indices:
By Stephen Letts
The big broking house J.P. Morgan says the $2.9 billion takeover offer from wealth manager Insignia Financial from US-based private equity firm CC Capital Partners may not be enough.
J.P. Morgan analyst Siddharth Parameswaran wrote in a note to clients Insignia still looks cheap compared to the growth targets its management has detailed.
"The stock is certainly not priced for achieving its ambitious aspirational targets," Mr Parameswaran said.
"We said previously following the Bain Capital offer that if the Board believes its targets have some chance of being achieved, they will seek a higher offer."
The $4.30 off from CC Capital represents a 7.5% premium from a bid launched by Bain Capital on Friday.
It is also 21% higher than Insignia's Friday close.
"The arrival of a second offer now introduces competitive tension into the bidding process, which we think is a positive and increases the chances of a more favourable outcome for shareholders," Mr Parameswaran said.
" It is unclear if the board will engage with this offer," he added.
Insignia has around $4 billion in funds under management and grew out the old IOOF business after it took over MLC from NAB in 2021.
By Rachel Clayton
Morning everyone! Rachel Clayton here jumping in with some predictions about what Wednesday's inflation is likely to show.
Ben Jarman, chief economist from J.P. Morgan, believes this week's CPI data is likely to reinforce the RBA board's confidence that inflation is falling.
The impact of the renewed household energy subsidies, which has been the main factor propping up inflation, should start fading, he said.
"In November we expect food prices will have picked up again based on related NZ data, as will furnishings/household equipment/services.
"The transport group should also post a gain, but while fuel prices perked up initially, most of the rise was given back by month-end so gains should be only moderate."
Jarman said weak global pricing and sales would drag clothing/footwear prices.
Alcohol and tobacco should also be a slight drag and housing is expected to be benign.
Are you grappling with the high cost of living or are a business battling rising costs? Get in touch at clayton.rachel@abc.net.au
By Stephen Letts
The ASX has opened the morning higher after a strong end to the week on Wall Street.
At 10:20am AEDT, the ASX 200 was up 0.4% to 8,283 points.
The industrial sector led the way while technology stocks, REITs and banks were also in demand.
The big drag so far has been the miners.
Rio Tinto, BHP and Fortescue have all been sold off this morning despite higher iron ore and copper prices on Friday.
On the other end of the ASX's proverbial "barbell", banks are doing well.
It's no surprise the big winner this morning is wealth manager Insignia Financial which announced it had received another takeover offer.
However, at $3.94 Insignia is still trading well below the $4.30 offer from US-based CC Capital.
The worst performing stock on the ASX 200 is gold miner, Bellevue Gold, down 12.2% on the release of a downgraded production estimate this morning.
By Stephen Letts
The wealth manager Insignia Financial has received a takeover offer from private equity outfit CC Capital Partners, after recently rejecting a recent bid from Bain Capital.
In a statement to the ASX, Insignia said CC Capital bid of $4.30/ share represented a 7.5% premium to Bain's proposal of $4.00/share.
Insignia said its board is considering whether it is in the best interests of shareholders to engage with US-based CC Capital on the proposal.
By Stephen Letts
Australian service industries have reported accelerated business activity to end the year but still cut jobs for the first time in three and half years.
The S&P Global Services Purchasing Manager's Index (PMI) found activity and optimism in the sector rose in December with the eleventh consecutive month of expansion.
However, the survey found employment fell for the first time since August 2021 as capacity pressure softened.
It also noted, "input cost inflation intensified at the end of 2024, leading to a more pronounced rise in average charges."
S&P Global economist Jingyi Pan the better news was driven by a quicker rise in new business, with external demand notably improving for the first time in four months.
"Confidence among Australian services firms also climbed to the highest level in just over two-and-a-half years to signal greater hopes for output growth," Ms Pan said.
However, the was a note of caution in rising costs found in the survey, although Ms Pan said it was unlikely to change the RBA's course on future rate cuts.
"Higher readings across price measures pose a risk for inflationary pressures, although both rates of input cost and output price inflation remain below their series averages at the end of 2024," she said.
The S&P Global Market Intelligence said it still expected an interest rate cut from February 2025.
By Stephen Letts
Australia
Mon: PMI (Dec)
Tue: Building approvals (Nov)
Wed: Inflation indicator (Nov)
Thu: Retail sales (Nov), trade balance (Nov)
International
Mon: CH — Caixin PMI (Dec)
Tue: US — Trade balance (Nov), factory orders (Nov), durable goods (Nov), job openings (Nov)
Wed: US — ISM manufacturing PMI (Dec), ADP employment (Nov), Fed meeting minutes
Thu: US — EIA fuel inventories (weekly)
Fri: US — Non-farm payrolls, unemployment
The local flow of data resumes this week with the Purchasing Managers' Index opening the batting.
Its form has been somewhat scratchy for a while, averaging just below 50, indicating a marginal decline in activity.
Building approvals (Tuesday) are likely to continue on their volatile way showing while things are improving, approvals remain below their long-term average.
Perhaps the most important release of the week will be the monthly CPI indicator on Wednesday as it a key to the prospects for a rate cut from the RBA next month.
NAB is forecasting headline inflation in November will rise from 2.1% yoy to 2.4% as the impact of electricity subsidies unwind.
As NAB's Taylor Nugent notes the November figures will firm up expectations on fourth quarter CPI to be released at the end of the month, with the bank forecasting trimmed median CPI (the RBA's preferred measure) rising to 3.1% — which is above the target band, but below the RBA's guessitimate of where it would be.
Retail sales and the trade balance (both Thursday) round out the week's offering from the ABS.
Overseas, there will be a slew of US jobs figures starting with job openings (JOLTS) on Tuesday, then ADP employment (Wednesday) and the most influential of all, non-farm payrolls/unemployment numbers on Friday.
On going strength in the jobs market isn't a great argument for deep rate cuts from the Fed.
By Stephen Letts
The ASX 200 is eyeing a modest gain this morning after Wall Street broke out of its festive season torpor on Friday.
The S&P 500 (+1.3%), the Nasdaq (+1.8%) and Dow (+0.8%) all made solid gains, but overall, they lost ground over the week.
Following that late session momentum, the ASX 200 futures point to a 0.3% rise this morning.
The US buying was spurred on by some bargain hunters spotting value in the so-called Santa Claus Rally that never arrived.
"After the late-in-the-year weakness, and a very oversold market, we finally saw some buyers step in," Carson Group chief market strategist, Ryan Detrick told Reuters.
"Obviously the past week-and-a-half has been disappointing for the bulls, but volume has been light and there hasn't been a lot of news."
"Let's just remember, starting next week, on Monday, that's when a lot of the big money managers come back to the desk."
Globally, it was a mixed bag.
The broad MSCI index rose 0.9%, but Europe was a drag with both the Eurostoxx 600 and the FTSE slipping on low volumes.
The US dollar was marginally stronger after manufacturing data pointing to stronger than expected activity.
US Treasury yields also rose slightly on the better-than-expected economic news and the belief that this week's jobs' data would also be strong, undermining the case for deeper interest rate cuts.
Oil rose on the back of higher demand due to cold weather in Europe and another batch of pro-growth policy announcements in China.
The news out of China on Friday that its central bank would shift ground on monetary policy by increasing issuance of long-dated bonds, and perhaps cutting official rates, also supported the likes of copper and iron ore prices,
Gold enjoyed a solid week (+0.8%) but slipped on Friday in response the stronger US dollar.
By Stephen Letts
Good morning and welcome to another week on the ABC markets and finance blog.
Stephen Letts from ABC business team limbering up for a blow-by-blow coverage of the day's events, where every post is hopefully a winner, but none should be construed as financial advice.
In short, futures trading points to a 0.3% rise on the ASX 200 this morning after a positive end to the week on Wall Street.
As always, the game's afoot, so let's get blogging.
By Stephen Letts
Prices current around 7:15am AEDT
Live updates on major ASX indices:
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