S&P/ASX 200 and All Ords today – what you need to know

The S&P/ASX 200 (XJO) and All Ordinaries (XAO) are set to follow US markets lower this morning as Melbourne prepares to go back into lockdown.

Stock market recap

Despite a strong overseas lead, the ASX 200 paused on Tuesday, pushed marginally lower by the reinstatement of stage 3 restrictions in Melbourne.

A strong lead from the ASX mining sector, particularly gold with St Barbara Mining Ltd (ASX: SBM) adding 10.3%, wasn’t enough to overcome an afternoon collapse in the property and travel sectors.

Just four of the eleven sectors were positive, with A-REITs down 1.7% on the back of a fall in shopping mall owners Scentre Group (ASX: SCG) and Lendlease Group (ASX: LLC), both down more than 4%. I have reiterated the risk of the A-REIT sector on many occasions, with multiple shutdowns a real risk to the profitability of these businesses, particular should major tenants like Target or BIG W depart.

It was a similar story in the US, with record new cases causing a reversal of recent loosenings, sending the S&P 500 down 1.1%. American Airlines (MYSE: AAL) and Carnival Corp (NYSE: CCL) each fell by more than 6%.

Active investing works?

It turns out active managers can outperform, with both Magellan Financial Group Ltd (ASX: MFG) and Australian Ethical Investment Ltd (ASX: AEF) improving 2.7% and 8.2%, respectively. The former announced net inflows of $249 million in June, just as the market peaked, and the latter raised profit guidance after its ESG-focused Emerging Companies Fund outperformed by ~7% for the financial year.

In a sign that times really are changing, Coles Group Ltd (ASX: COL) announced that its November AGM will be held virtually, in what should be a boon for registry providers like Link Administration Services Ltd (ASX: LNK).

Whilst I’m somewhat tired of wiring about the company, Afterpay Ltd (ASX: APT) remains in the news. Yesterday, the company reported a 112% increase in sales to $11.1 billion and an opportunistic $800 million capital raising as it seeks to expand into Canada. Interestingly, Afterpay’s co-founders are selling around $250 million worth of shares, which is never a great sign.

Uber makes an acquisition

The pronouncements of lower returns from sharemarkets for the next 10 years are once again being heard from ‘experts’, the same comments made three years ago before markets eventually pushed closer to all-time highs. As always, I suggest forecast be put to one side and investors focus on investing in quality, growing companies regardless of the environment.

The booming food delivery sector is seeing another round of consolidation, with Uber Technologies (NASDAQ: UBER) buying delivery app Postmates for US$2.65 billion in equity. In my view, anyone selling a company should be seeking cash and not equity, no matter the quality of the buyer.

The economic news was generally positive, with the Reserve Bank of Australia leaving rates at 0.25%, but its comments quickly out of following the Victorian Prime Minister’s conference at 3.15pm.

Italian retail sales recovered, up 24.3% and only down 10.5% on 2019’s figures, while Japanese spending was down 16.2% on 2019 but only 0.1% on May. The European economy appears to be moving forward faster than the US, with Louis Vuitton Moet Hennessy (PA: MC) adding 0.3% despite the rest of the market falling 0.9%. The luxury retail conglomerate is a solid buying opportunity in my view.

This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better? Please give us us some feedback :)

We care about your experience, please let us know if you have any suggestions to improve our site.