Australian Market Preview 28 July

A bounce back in tech shares like Apple, Facebook and Amazon help US markets close higher Tuesday. The tech-heavy NASDAQ was 1.67% higher, whilst the broader benchmark S&P500 gained 0.74%, and the blue chip-laden Dow Jones Industrial Index rose a more modest 0.43%.

Helping investor sentiment, Republicans said that their long-awaited proposal for the next round of fiscal stimulus would be released within the next day. This help assuage fears that further help would not arrive before a number of assistance measures expire on Friday.

In other positive news, daily confirmed cases of coronavirus ticked below 60k cases per day for the first time in a week.



Gold price moves grabbed most of the headlines Monday. The precious metal rose 2.31% to US$1946.31/oz, whilst Silver surged another 8.62% to US$24.90/oz.

Metals prices on the LME were generally higher also. Lead +2.44%, Tin +2.21%, and Nickel +1.23%, were the best, whilst Steel Rebar lost 0.35%. Copper saw a 0.47% gain in London, and a 0.76% gain in New York. 

Iron Ore prices continued their slide, falling another 0.97% on the Chinese Dalian Exchange, and 0.35% in the Singapore-based $US price.

Energy commodities rose for the second straight session. West Texas Crude improved 0.77% to US$41.65/barrel, Brent rose 1.39%, but Natural was 0.73% lower.

In currency moves, Australian Dollar followed gold and commodities higher, moving to 0.7160. That’s a gain of 0.68% as the US Dollar lost an average of 0.81% against other currencies.

So, apart from gold, it appeared to be a fairly typical 'risk on' session Monday. So where did the ASX200 Share Price Index end up? Well, it had a reasonably robust session, closing at 6034 compared to an overnight session high of 6042 and a low of 5997.

That's a 10 point discount to yesterday's ASX 200 close of 6075, and predictive of approximately a 0.5% rally at the open for the S&P ASX200. 

 

The company reported this morning that cash receipts increased 89% to $10.4m in the June quarter y-o-y. Annualised Recurring Revenue (ARR) year on year growth of 53% to $35.8m, with organic ARR growth of 40%.

Bigtincan also completed an oversubscribed institutional placement and associated Share Purchase Plan to raise a total of $42.5m before costs. This meant it had cash and cash equivalents of $71.9m at the end of the June Quarter.

The company had not experienced a substantial impact from the covid-19 pandemic as 96% of its workforce were able to work remotely. CEO and Co-founder, David Keane, commented that despite the challenges experienced during the quarter: "we continued to develop key technology that will deliver long term value for shareholders."

 

The company reported this morning that it had achieved revenue for FY20 of $11.3m, up +131% y-o-y. June quarter revenue was up 351%.

It had seen rapid development of its SARS-CoV-2 kit, which drove significant domestic and international sales. This included the first material sales out of Europe in 2H FY20 and strong demand from existing domestic customers. 

GSS had invested in increased manufacturing capacity within existing infrastructure to cater for the increased demand. It also noted that it had dramatically increased inventory holdings and made a considerable investment in instrumentation. 

Despite the considerable investment during the quarter, the company retained a strong cash balance as at 30 June 2020 of $31.2m.


Other companies reporting this morning include: Credit Corp Group Limited (CCP), Energy Resources of Australia Limited (ERA), Impedimed Limited (IPD), Pointsbet Holdings Limited (PBH), and Spirit Telecom (STI).

 

There are no major economic data releases slated for today locally, but find below a summary of the key macroeconomic data releases from the past 24 hours.
 

The US Census Bureau reported on Monday that Durable Goods Orders in the US increased by 7.3% in June compared to May's 15.1% increase. This reading was slightly better than the market expectation for an increase of 7%.

Excluding the more volatile transportation orders, "core durable goods orders" increased 3.3%, and excluding defence, orders rose an even more impressive 9.2%. 

Durable goods are an important economic indicator because they represent large, and generally expensive items such as industrial and farming machinery, and for retail consumers, household whitegoods.

In this way, Durables goods data spans both business and consumer. It provides an insight into their confidence into the future - as one would not likely make such an investment in durable goods without confidence.