Pre-Open Data
Key Data for the Week
Key economic data released this week:
- Tuesday – AUS – NAB Business Conditions & Confidence – Business Conditions increased to 1 in October, from 0 in September, while Business Confidence rose to 5 in October, from -4 in September.
- Tuesday – UK – ILO Unemployment Rate - Rose to 4.8% in the September quarter, from 4.1% in the June quarter.
Australian Market
The Australian sharemarket surged during early trade yesterday amid hopes of a COVID-19 vaccine, however, gains eased throughout the afternoon, with the ASX 200 closing up 0.7%. Some of the recently hardest hit stocks saw positive results, with Travel and Leisure, Energy and Financials leading the gains.
Travel stocks soared on Tuesday; Corporate Travel Management jumped 15.9%, Webjet rose 13.6% and Flight Centre added 9.3%. Airlines and airports also saw strong gains; Qantas climbed 8.3%, while Sydney Airport and Auckland International Airport lifted 9.6% and 5.6% respectively.
The Energy sector saw its largest gain of the year yesterday, up 8.5%, after global oil prices rose around 8.0% following encouraging vaccine news. Oil Search jumped 16.6%, Beach Energy lifted 14.8% and Woodside Petroleum added 7.3%.
The Information Technology sector was the weakest performer, down 6.2%. Buy-now-pay-later companies, Afterpay and Zip Co, sunk 10.9% and 9.2% respectively, while Appen slid 8.9% and Xero lost 3.5%. The Consumer Discretionary sector also underperformed, dragged lower by online retailers. Temple and Webster dropped 20.6% and Redbubble lost 20.0%, while Kogan fell 17.1%.
The Australian futures market points to a 0.77% rise today.
Overseas Markets
European sharemarkets extended gains overnight, with the STOXX Europe 600 up 0.9%. The Financials sector was the strongest performer; Barclays gained 5.6% and Lloyds Bank added 4.4%, while Deutsche Bank lifted 2.0%. The Energy sector also outperformed; BP jumped 5.1%, while Royal Dutch Shell climbed 4.5%. European commercial real estate company Unibail-Rodamco-Westfield surged 21.0% to top the STOXX Europe 600, after shareholders voted against a planned €3.5 billion rights issue.
US sharemarkets were mixed on Tuesday. The Information Technology sector was the weakest performer; Spotify sunk 8.9% and Microsoft slipped 3.4%, while Facebook and Alphabet lost 2.3% and 1.3% respectively. Consumer Discretionary also saw losses; Alibaba fell 8.3%, while Amazon dropped 3.5%. Financial services saw a pull back after Monday’s strong gains; MasterCard slid 2.9%, while American Express and PayPal closed down 1.3% and 0.7% respectively.
The Consumer Staples sector outperformed overnight; Walgreens added 6.5% and Walmart rose 1.4%, while General Mills and Costco gained 1.1% and 0.4% respectively.
By the close of trade, the Dow Jones lifted 0.9%, while the S&P 500 slipped 0.1% and the NASDAQ lost 1.4%.
CNIS Perspective
Yesterday saw the announcement that we all have been waiting to hear, with a trial vaccine showing clear signs of efficiency.
While this breakthrough is significant, it is being treated with a degree of apprehension, with transportation of the vaccine one key detractor.
Storage and transportation of the potential vaccine at the required -70°C could become a logistical nightmare and many have pushed back on the news, due to the potential lack of scalability.
From a market point of view, it provides optimism for the sectors of the market that have struggled the most over 2020, with companies in hospitality, travel and leisure, energy and property retailers all breathing a sigh of relief that we may be nearing a turning point in what has been a destructive year for these sectors.
At the end of the day we are not out of the woods, however, this advancement should give hope that a vaccine will become available in the not too distant future. More trial results from competitors are yet to be announced and markets will continue to act in a volatile manner on any news.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
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