The brokers' verdict on the Beach Energy/Warrego Energy deal

MARKETS WRAP

S&P 500 TECHNICALS

THE CALENDAR

Did you say you wanted more central banks? If you did, you've got some more! If you didn't, sorry about that.

The Bank of Canada met this morning and they increased rates by another 50 basis points to 4.25%. 

Later tonight, we'll hear from ECB President Christine Lagarde in some pre-recorded remarks at a regulatory summit.

THE HEAT MAP

It's been a crazy year for markets - and you can see that in this heat map designed by the team at Macrobond. For years, Bitcoin was the top performer among major asset classes. This year, crude oil took that spot from them and Bitcoin fell from first to ninth in a flash. Wine (weirdly enough!) came in at number two, which will be good news for anyone holding on to that alternative asset. Finally, the equity selloff ends up being less savage than the selloff in US Treasuries (bonds) but not by a whole lot.

How will this heat map change in 2023? Only time will tell.

THE CHART

If you've read this report at all since we started it in April, then chances are you've heard me talk about once (ok, many times) about the yield curve inversion. But when I talk about inversions, I normally refer to the US inversion given it is the world's largest economy - and a recession in the US is felt by the rest of the world.

But I'm showing this chart to show you why Australia may not find itself in a recession. While our major economic counterparts have deeply inverted yield curves, Australian bonds are not even close to inverting.

I guess we really are (the) lucky country!

STOCKS TO WATCH

Today's stocks to watch segment concerns one of the biggest M&A rumbles in markets right now - the Beach Energy (ASX: BPT) takeover offer for Warrego Energy (ASX: WGO). Three brokers have downgraded their ratings on Beach Energy as a result of the company making a second bid for the latter. 

Morgans downgrades BPT to HOLD from add, a new price target of $1.91/share.

JPMorgan also downgraded the company to NEUTRAL from overweight, price target remains at $1.90/share.

Jarden downgrades the company to OVERWEIGHT from buy, with a price target of $1.95/share.

And speaking of energy stocks, Santos (ASX: STO) doubled its share buyback yesterday to $700 million. Talk about making hay while the sun shines!

THE FUNNY

Hans Lee wrote today's report.