Morning Market Update - 11 May 2020


Pre-Open Data

1

Key Data for the Week

Key economic data released this week:

  • Monday – CHINA – New Loans
  • Tuesday – AUS – NAB Business Confidence & Conditions
  • Tuesday – US – Consumer Price Index
  • Wednesday – AUS – Westpac Consumer Confidence
  • Wednesday – UK – Gross Domestic Product
  • Thursday – AUS – Unemployment Rate
  • Thursday – US – Initial Jobless Claims
  • Friday – EUR – Gross Domestic Product
  • Friday – US – Retail Sales
    2

Australian Market

The Australian sharemarket ended the final trading session of the week 0.5% higher on Friday, led by Consumer Discretionary and REIT stocks, which were boosted by Prime Minister Scott Morrison’s outline for the government’s three step roadmap for reopening the economy.

Retailers saw strong gains; Myer surged 45.0%, Harvey Norman strengthened 6.7%, Super Retail Group gained 6.6%, Adairs lifted 6.2% and JB Hi-Fi added 3.2%.

The prospect of domestic travel sooner than expected boosted Webjet and Flight Centre, which rose 9.3% and 8.1% respectively. However, both stocks remain down around 70% year to date.

Macquarie Bank climbed 5.7% after the company reported full-year net profit had only fallen 8% to $2.7 billion despite the COVID-19 pandemic.

Telstra slipped 1.0%, after the Telecommunications giant announced it would realise a $300 million impairment on its stake in Foxtel, a joint venture with News Corp. REA Group lifted 7.7%, after the Realestate.com.au owner reported its earnings increased 8% to $119.6 million in the March quarter.

The Australian futures market points to a flat open today.

Overseas Markets

European sharemarkets rose on Friday, buoyed by new optimism following signs of improvement in US-China relations. Auto stocks were among the best performers, with the sector closing up 3%. Industrials companies Eiffage and Vinci posted strong gains of 6.0% and 3.9% respectively, while banking heavyweight ING Groep NV rose 3.6%, after the company posted better than expected earnings. The broad based STOXX Europe 600 lifted 0.9% and the German DAX added 1.4%, while the UK sharemarket was closed for a public holiday.

US sharemarkets also closed higher on Friday, boosted by Energy stocks following a 4.3% rise in global oil prices. Sentiment was also boosted by constructive trade talks between the US and China. Apple rose 2.4% after the company announced it would start reopening US stores. Fellow technology heavyweights Alphabet, Facebook and Microsoft all added between 0.5% and 1.2%, while payment providers Visa (1.3%) and MasterCard (1.4%) both recorded solid improvements. By the close of trade, the Dow Jones increased 1.9%, the S&P 500 climbed 1.7% and the NASDAQ climbed 1.6%.

CNIS Perspective

The global transition to a cashless society has been one of our main portfolio themes for some time.

The shift to cashless transactions has been driven by a number of factors including the desire for more efficient transacting, greater online activity and a push by some governments for more transparency and accountability from a tax revenue perspective.

COVID-19 is now a new factor in driving society to cashless, or at least, less cash.

Already ATM activity is down 60%, as less cash is being accepted by a growing number of merchants not willing to physically handle notes and coins.

No doubt the drop in consumer spending is also behind the lower amounts of cash being withdrawn from ATMs, but as we ponder what life looks like post-COVID-19, there’s a fair chance health and hygiene may become another factor in the transition to a cashless society.

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.

Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.

Topics: CNIS, Australian Market, ASX, international markets

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