Coal in the spotlight as energy crisis deepens in Europe

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European stock markets ended lower on Monday, but at the worst levels. US stock futures are up as US markets are closed for the Labor Day holiday today.

In Australia today we have the RBA announcement at 2:30 p.m. with the RBA expected to raise the cash rate another 50 basis points to 2.35%. Economists say the pace of tightening should slow to 25 basis points after the September meeting.

In Europe, energy prices continued to rise after Russia halted its largest 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 35%, the most in nearly six months, and power prices rose.

The situation is fueling the concern of European ministers, who are due to discuss special measures this week to avoid a deeper crisis. Germany has announced a 65 billion euro package to help businesses and households. The UK government also expected to introduce new measures over the next week. Some discussion in the press about how the energy crisis may worsen Europe’s slowdown at the same time as the ECB accelerates rate hikes.

Coal remains an alternative for Europe as idle coal-fired power plants are restarted, which has seen the benchmark coal price rise by 7.6% recently, around three times the price a year ago. year.

For Australia, one of our biggest commodity exports has hit record highs in the wake of the energy crisis, with the price of Newcastle coal hitting historic highs as miners cash in amid a energy crisis which worsens in Europe. The price of thermal coal recently hit a new high, with Newcastle futures trading above US$440 ($648) a tonne, more than doubling since the start of 2022. Australian coal producers have been the market stars year-to-date – with Whitehaven up 225 percent, Stanmore Resources up 144 percent and Teracom up 450 percent.

In mergers and acquisitions news, CVS Health has reached an agreement to acquire home healthcare company Signify Health for approximately $8 billion, the companies announced Monday. CVS said it would pay $30.50 per share in cash for Signify, an acquisition that would build on its growing healthcare services. Signify provides technology and analytics to facilitate patient care at home. The deal comes as Amazon’s rivals to Walgreens advance in the healthcare sector. In July, Amazon announced the acquisition of primary care provider One Medical for approximately $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 drops restrictions. It is also suffering economically – nearly three years of scattered shutdowns have disrupted exports and sent unemployment skyrocketing, especially among young people. Chengdu, which faces an indefinite lockdown, has seen panic buying and anger on social media. Its Covid test system, responsible for sampling the 21 million inhabitants every day, recently collapsed. President Xi has claimed ‘zero Covid’, presenting it as proof of the strength of the Communist Party.

Currencies

The Australian dollar strengthened slightly against 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 .

Goods

Iron ore futures are pointing to a 2.2% gain.

Gold fell $1.40 or 0.1% to US$1,721 an ounce.

Silver rose $0.14 or 0.8% to US$18.02 an ounce.

Copper added $4.50 or 1.3% to US$345.85 per pound.

Oil gained $1.95 or 2.2% to US$88.82 a barrel.

Futures contracts

SPI futures point to a 0.1% gain.

Numbers around the world

On the other side of the Atlantic, the European markets closed on a mixed note. Paris fell 1.2%, Frankfurt 2.2% and London’s FTSE closed 0.1% higher.

Asian markets closed on a mixed note. Tokyo’s Nikkei lost 0.1%, Hong Kong’s Hang Seng fell 1.2% and China’s Shanghai Composite closed up 0.4%.

The Australian stock market added 0.3% to 6852 yesterday.

Ex-dividends

There are 12 companies ready to trade without the right to a dividend.

BlueScope Steel (ASX:BSL) pay 25 unstamped cents
CSL (ASX:CSL) pays 167.6613 cents 10% postage
Clinicuvel Pharmacy (ASX: CUV) pays 4 cents fully franked
Engenco (ASX: EGN) pays 1.5 cents 64% postage
Lynch Group holdings (ASX: LGL) pays 6 cents fully franked
Nickel industries (ASX: network card) pay 2 unstamped cents
North Star (ASX:NST) pays 11.5 cents fully franked
original energy (ASX:ORG) pays 16.5 cents 75% postage
Sonic Health Care (ASX:SHL) pays 60 cents fully franked
Super Retail Group (ASX: SUL) pays 43 cents fully franked
Consolidated PTC (ASX:TPC) pay 10 cents fully franked
Veem (ASX:VEE) pays 0.21 cents unstamped

Dividends payable

Four companies are ready 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.

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