This year. We're going Beyond.

S&P/ASX 200 to rise – ASX building supplies & oil shares in focus

The S&P/ASX 200 (INDEXASX: XJO) is expected to open higher on Tuesday according to the Sydney Futures Exchange. Here’s what ASX investors need to know.

ASX 200 market recap

The ASX 200 delivered its strongest day in four months, adding 2.6% on Monday despite the public holiday in NSW and much lower volume as a result.

The positive news was threefold: the government announced that tax cuts would be brought forward and backdated to 1 July 2020; they also flagged further infrastructure stimulus; and finally, news emerged that President Trump’s health was on the improve.

Such is the lack of investment news flow that the health of the US President, who is currently expected to lose, has been enough to turn sentiment.

The biggest beneficiaries were the energy sector, up 4.5%, with Oil Search Limited (ASX: OSH) jumping 7.5% after oil futures rallied on hopes of more US fiscal stimulus. Viva Energy Group Ltd (ASX: VEA) shares fell 12.1% after going ex-dividend, one of only nine stocks that finished lower.

Oil remains a highly leveraged play on a ‘COVID-normal’ global economy. In my view, when balanced with the growing second wave in Europe, it’s a little too much risk to bear at the present time.

Featured video: 4 stocks to play the rise of digital advertising

QBE faces more court action, building supplies stronger

With a busy day ahead, starting with the RBA’s interest rate decision and the Federal Budget to be delivered tonight, the building supplies and infrastructure sector offer a leading indicator of where the money will flow.

Fletcher Building Ltd (ASX: FBU) added 5.2% and Boral Limited (ASX: BLD) 2.4% yesterday as the economic recovery hopes are pinned on infrastructure and housing construction.

Whilst a reasonable start, there is an incredible amount of pain throughout small and large businesses exposed to any part of the travel, education or retail sectors. Without targeted stimulus beyond the construction sector, any economic recovery is likely to be slower than expected.

The NAB Business Confidence Index improved, from -8 to -4, the only sector still lacking confidence being financial and property services; National Australia Bank Ltd (ASX: NAB) shares rallied 4.0%.

Finally, QBE Insurance Group Ltd (ASX: QBE) remains mired in court action across the global. It was reported that bankrupt US retailer Century 21 is challenging QBE’s decision not to pay out on its business interruption insurance.

Trump to leave hospital, Airbnb to IPO

Global markets followed the Australian lead, the Nasdaq adding 2.3% and the S&P 500 1.8% at the time of writing. The rally came following news that President Trump was recovering well and set to leave the hospital following treatment.

Despite the hospital stay, the President was able to place additional pressure on Congress to deliver a much-needed stimulus package, which supported the energy, technology and healthcare sectors.

In a sign of the desperation for new ideas, Regeneron Pharmaceuticals (NASDAQ: REGN) rallied 8.0%, leading the Nasdaq, after it was reported that the President was being treated with an experimental drug produced by the company.

Airbnb is set to overcome an incredibly difficult year to list on the stock market in December. The company is looking to raise US$3 billion after sacking 2,000 staff amid the worst of the crisis.

This article 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.

Disclosure: At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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.