Pre-Open Data
Key Data for the Week
Key economic data released this week:
Australian Market
The Australian sharemarket closed up 0.8% on Friday, as the local ASX 200 continued its run of gains following the US election. Gains were broad based, with Health Care and Utilities the only sectors to fall. The ASX 200 ended the week 4.4% higher, to post its best weekly gain since early October.
The Materials sector was the best performer, led higher by gold miners; Northern Star strengthened 7.2%, Evolution Mining lifted 6.7% and Newcrest gained 3.5%. Mining heavyweights BHP and Rio Tinto rose 1.3% and 1.6% respectively, however, Fortescue Metals slipped 0.5%.
Macquarie Group climbed 2.3%, following the release of the company’s first half earnings results. The investment bank announced it will pay an interim dividend of $1.35/share, despite a 32% fall in NPAT to $985 million and a large increase in credit and other impairments in response to COVID-19. However, the company did not provide any conclusive FY21 guidance.
Tabcorp surged 15.9%, following a media report that claimed private equity groups are interested in buying parts of the company’s operation. However, Tabcorp’s Chair said it was unaware of any proposal.
The Australian futures market points to a 0.24% rise today.
Overseas Markets
European sharemarkets closed lower on Friday, as the region continued to experience a surge in new coronavirus cases. Lufthansa tumbled 6.9%, after Germany warned against unnecessary travel to Denmark, Italy and several other countries. Italy in particular was hit hard by new coronavirus cases, as the nation recorded its worst daily increase. Automakers fell following a surge earlier in the week, with expectations a Joe Biden win in the US presidential election would lead to a softer stance on trade policy. Tesco continued to benefit from a renewal of lockdowns in the UK, as the Consumer Staples giant ended the session up 2.5%.
US sharemarkets were mixed on Friday, as the presidential election remained undecided despite Joe Biden inching closer to victory. Square rose 13.0%, after the payments processor’s Q3 earnings and revenue beat expectations, while Zillow Group strengthened 14.9%, after its Q3 earnings, revenue and guidance was much better than anticipated, boosted by high growth in digital traffic due to a strong housing market. However, Electronic Arts slid 7.1% despite stronger than expected EPS growth, after the company provided guidance that was below expectations. Music streaming giant Spotify lifted 7.7%, while e-commerce heavyweight Alibaba added 4.2%.
CNIS Perspective
If there is one thing Donald Trump excelled at as US President, it was finding ways to get things done without needing to gain approval from a Democratically controlled Senate. Once confirmed and in office, President-elect Joe Biden will face a similar problem, with the Senate looking likely to be controlled by the Republicans. Trump found all sorts of ways to govern by executive order, and Biden can do the same.
Biden has one of the most progressive agenda’s in democratic history and has already announced plans to name his own task force to deal with the coronavirus pandemic and is likely to rejoin the Paris climate accord and the World Health Organization.
The COVID-19 crisis could be used as a first chance for Biden to start showing Americans what his ‘Build Back Better’ campaign slogan looks like in real life. There are still hundreds of billions of dollars yet to be spent under the Cares Act, which was passed to help the country deal with the effects of the coronavirus pandemic.
There is so much low-hanging fruit to be picked right now, from improving relations with allies in Europe and elsewhere, setting common standards for digital taxation and 5G, cutting a new US-EU privacy deal, and coming up with a common approach to deal with Chinese state run capitalism.
Diplomacy is an area where Biden may well shine, and he won’t need Republican support for that.
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