Australian Market Preview 29 September

 

US markets rose again as investors shrugged off rising Covid-19 case counts in Europe and instead focussed on signs that fiscal stimulus may be inching closer. Investors took heart from comments from U.S. House of Reps Speaker Nancy Pelosi, who said in a television interview, that stimulus talks with Treasury Secretary Steven Mnuchin are due to continue Monday.

The tech-heavy NASDAQ paced gains, it closed up 1.87%, but the benchmark S&P500 was not far behind, it was up 1.61%, and the blue chip-laden Dow Jones Industrial Index gained 1.51%. Earlier, European stocks bounced back strongly, closing out their respective sessions with gains. The German DAX in particular was up 3.22%. In the UK, the FTSE100 rose 1.46%

Metals prices on the LME were broadly stronger. Aluminium, Copper, Lead, Nickel, and Steel, were each approximately 1% higher, whilst Tin and Zinc each gained around 2%. Copper also saw a 0.69% gain loss in New York.

Iron Ore prices bucked the bullish trend however. Iron Ore is 0.26% lower in early trading in the benchmark January '21 contract on the Chinese Dalian Exchange, and is is 0.04% lower at US$123.60/t in the Singapore-based $US price.

Precious metals, which are historically risk-off assets, rose in line with their risk-on counterparts. Spot Gold was 0.77% higjer to US$1881/oz, whilst Silver gained 2.41% to US$23.68/oz.

Energy commodities also gained. West Texas Crude added 1.38% to US$40.61/barrel, Brent gained 2.59% to US$42.87/barrel, whilst and Natural Gas surged 23.41%.

In currency moves, the Australian Dollar improved 0.51% to 0.7082 as the US Dollar Index declined 0.38%.

Consistent with the broad-based risk-on theme Monday, risk-off bonds were slightly lower, with the yield on the US 10 year Treasury Note rising 0.2bp to 0.661%.

So, with a clear risk-on move in overseas markets last night, where did the ASX200 Share Price Index end up? Well, it had a similarly robust session, closing at 5982 compared to an overnight session high of 5986 and a low of 5932.

That's a 29.7 point premium to yesterday's ASX 200 close of 5952.3, and predictive of approximately a 0.7% rise at the open for the S&P ASX200. 
 

APN Industria REIT (ADI) $0.043 unfranked
Australian Unity Office Fund (AOF) $0.0375 unfranked
APN Convenience Retail REIT (AQR) $0.05475 unfranked
Arena REIT No 1 (ARF) $0.03625 unfranked
Aventus Group (AVN) $0.04 unfranked
Centuria Industrial Reit (CIP) $0.0425 unfranked
Charter Hall Long WALE REIT (CLW) $0.072 unfranked
Cromwell Property Group (CMW) $0.01875 unfranked
Centuria Office REIT (COF) $0.04125 unfranked
Charter Hall Social Infrastructure REIT (CQE) $0.0375 unfranked
Elanor Commercial Property Fund (ECF) $0.025 unfranked
Energy One Limited (EOL) $0.035 unfranked
Gryphon Capital Income Trust (GCI) $0.0071 unfranked
Garda Diversified Property Fund (GDF) $0.018 unfranked
Kkr Credit Income Fund (KKC) $0.025 unfranked
Kirkland Lake Gold (KLA) $0.1445 unfranked
Meridian Energy (MEZ) $0.09968 unfranked
Perpetual Cred Trust (PCI) $0.002968 unfranked
Qualitas Real Estate Income Fund (QRI) $0.007956 unfranked
Redcape Hotel Group (RDC) $0.0183 unfranked
Rural Funds Group (RFF) $0.028203 unfranked
360 Capital Grp (TGP) $0.01 unfranked
360 Capital REIT (TOT) $0.015 unfranked
 

Australian Finance Group	AFG	Citi initiates buy rating on Australian Finance Group (AFG). Initiates $3.00 price target. Anticipates cyclical trends will provide tailwinds for earnings.
Bluescope Steel	BSL	Citi raises Bluescope Steel (BSL) price target from $13.60 to $14.00. Retains neutral rating. Cites cyclical tailwinds for those exposed to construction.
Boral	BLD	Citi upgrades Boral (BLD) rating from neutral to buy. Raises price target from $4.35 to $5.30. Cites rebound in construction market. Upcoming portfolio review could trigger re-rating by market.
Boral	BLD	Jefferies retains buy rating on Boral (BLD).  Reviews board renewal. Is pleased with outcome.
Cleanaway Waste Management	CWY	Credit Suisse upgrades Cleanaway Waste Management (CWY) rating from neutral to outperform. Retains $2.45 price target. Notes recent share price declines as improving value proposition.
Mortgage Choice	MOC	Citi initiates buy rating on Mortgage Choice (MOC). Initiates $1.250 price target. Anticipates cyclical trends will provide tailwinds for earnings.
Premier Investments	PMV	Macquarie raises Premier Investments (PMV) price target from $22.13 to $24.22. Retains outperform rating. Reviews FY20 results. Is pleased with progress on margins, earnings growth.
Resolute Mining	RSG	Citi raises Resolute Mining (RSG) price target from $1.500 to $1.650. Retains buy rating. Anticipates a return to normal production after recent industrial action against the co.

 

It was a quiet day on the local economic data front Monday, but later this evening, we'll see data on US Consumer Confidence, and hear from a number of key US Federal Reserve board members.