Pre-Open Data
Key Data for the Week
- Monday – AUS – HIA New Home Sales were up 90.3% in March, from 22.9% in February.
- Tuesday – AUS – RBA Meeting Minutes
- Tuesday – UK – ILO Unemployment Rate
Australian Market
The Australian sharemarket closed relatively flat on Monday in a mixed session of trade. The Energy and REITs sectors were the weakest performers, down 1.4% and 1.2% respectively.
The Materials sector advanced yesterday, up 0.8%. Fortescue Metals lifted 1.8% and Rio Tinto added 1.7%, while BHP finished flat. Gold miners were also stronger; Evolution Mining rose 2.8% and Northern Star gained 2.3%, while Newcrest Mining rose 0.9%.
Energy stocks led the losses, as oil prices fell amid concerns that rising COVID-19 cases in countries such as India will restrict movement. Woodside Petroleum and Beach Energy both shed 1.9%, while Oil Search gave up 1.5% and Santos slipped 1.3%.
Property stocks also underperformed; Charter Hall Retail closed down 3.3%, while GPT Group fell 3.1% after the company provided 2021 earnings guidance, with expectations of 8% growth year on year. However, Cromwell Property Group and Ingenia Communities Group bucked the trend to gain 1.7% and 0.8% respectively.
The Financials sector posted a 0.3% gain, as all major banks, except NAB, closed higher. Commonwealth Bank added 1.0%, ANZ lifted 0.4% and Westpac closed up 0.2%, while NAB slipped 0.1%.
The Australian futures market points to a 0.46% fall today, being driven by weaker overseas markets.
Overseas Markets
European sharemarkets eased overnight, as the STOXX Europe 600 slipped 0.3%. Automaker stocks led losses; Porsche gave up 2.6% and Volkswagen Group fell 2.0%, while BMW slipped 0.8%. European football clubs Manchester United and Juventus F.C. rallied 6.7% and 17.9% respectively after the top European clubs announced a breakaway competition to rival the UEFA Champions League. Industrial stocks were stronger as Eiffage SA and Vinci SA both gained 1.6%. The Financials sector was mixed; Credit Suisse shed 1.4% and Barclays slipped 0.8%, while HSBC and Lloyds Bank lifted 0.2% and 0.7% respectively.
US sharemarkets were also weaker on Monday. Tesla slid 3.4% after a fatal accident was recorded in one of the company’s vehicles operating in autonomous mode. The Information Technology sector underperformed; Spotify gave up 5.1% and NVIDIA lost 3.5%, while Facebook and Microsoft slipped 1.3% and 0.8% respectively. However, Alphabet and Apple bucked the trend to close up 0.2% and 0.5% respectively. Health Care stocks were stronger; Johnson & Johnson added 0.3% despite the pause of their COVID-19 vaccine, while pharmaceutical company Bristol Myers Squibb gained 0.2%.
By the close of trade, the Dow Jones and S&P 500 fell 0.4% and 0.5% respectively, while the NASDAQ gave up 1.0%.
CNIS Perspective
It may not be everybody’s investment cup of tea for moral or ethical reasons, but there can be no denying the strength in the gambling sector during 2020 and into 2021, benefitting from strong online customer growth and from being part of the ‘reopening trade’.
COVID-19 accelerated the process of technological adoption in the industry, with customers having access to a broader online offering, including online sports, casinos, racing and lotteries.
With tax revenues down as a result of lower spending during lockdowns, US states looked to gambling as a means to augment their annual tax revenues.
New York has become the 16th state to legalise sports betting, driven by the attraction of a forecast US$500 million in annual tax revenues. Further US states look likely to adopt similar measures as a means of funding large budget deficits, required to stimulate their economies during COVID.
Like many activities that evolved during COVID, e.g. Zoom meetings, food delivery, working from home etc., online gambling will probably be just as ‘sticky’ and here to stay as part of the new normal.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
Disclaimer
The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.
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