ASX 200 (XJO) morning report – MBH, TLS & AAPL stock in focus

The S&P/ASX 200 (INDEXASX: XJO) is expected to drop at the open on Wednesday according to the ASX futures exchange. Here’s what’s making headlines.

ASX 200 recap

The ASX 200 reached its highest point in seven months, passing 6,200 points after improving 1.0% on Tuesday. This takes the rally to seven straight days with all sectors except materials finishing higher.

The financial sector continues to outperform as economic conditions return to normal, despite the continued lockdowns in Victoria. National Australia Bank Ltd (ASX: NAB) shares finished 1.9% higher. Even at current prices, the sector is still over one third lower than its 2020 highs.

The Telstra Corporation Ltd (ASX: TLS) share price was the highlight of the day, finishing 4.0% higher after the Chairman suggested the current dividend would be retained even if it required a higher payout ratio. This came at the same time that profit forecasts for 2021 were confirmed.

The quasi trade war with China continued with reports that the Chinese were set to ban coal exports from Australia, sending New Hope Coal (ASX: NHC) shares 7.3% lower.

On the positive side, the Chinese economy is leading the world out of the crisis, with exports growing 9.9% in September and imports 13.2% higher.

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Maggie Beer shares surge, another record for Hub24

Maggie Beer Holdings Ltd (ASX: MBH) shares rallied 14.8% after joining the online sales boom. The ASX micro-cap reported 237% growth in online sales in Q1, albeit off a very small base, representing just 5% of total sales. The company also signed a deal with meal kit distributor Marley Spoon AG (ASX: MMM) to include cheese platters in weekly meal deliveries. Solid sales growth but clearly not material.

Annuity issuer Challenger Ltd (ASX: CGF) offered an update to investors whilst launching a $250 million capital note to repay upcoming maturities. Priced at a 4.6% to 4.8% premium to the Bank Bill Swap Rate, supported by a solid asset base, the offer appears to be reasonable value.

Elsewhere, independent platform provider, Hub24 Ltd (ASX: HUB) hit another milestone, with assets under management increasing 32% to $19 billion. Management highlighted another 27 new licensees had joined, triggering a record $1.36 billion in net inflows during September. HUB24 shares finished 2.2% higher on the news.

Apple announces new 5G iPhone, US banks report

The S&P 500 fell 0.6% and the Nasdaq ended flat overnight. Apple Inc. (NASDAQ: AAPL) stock finished 2.0% lower despite releasing its new iPhone 12 model, which included 5G connectivity, along with a new in-home assistant, HomePod Mini.

But once again, it was stimulus discussions stealing the limelight, with the Democrats pushing back on the Republicans. It’s looking more likely that nothing will come to fruition before the election, which doesn’t bode well for markets in the short term.

Both JPMorgan Chase (NYSE: JPM) and Citigroup Inc (NYSE: C) lifted third-quarter earnings on the back of higher trading volumes. JPMorgan saw a 30% increase in overall trading and a 29% rise in fixed-income trading revenue as investors become more active. The bank added just US$611 million to its impairments for potential loan losses, far less than the US$10 billion in the second quarter. The result bodes well for Australia’s own investment bank, Macquarie Group Ltd (ASX: MQG), which should benefit today.

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.

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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.

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