The Monday Report – 06 July 2020

This story features COCHLEAR LIMITED, and other companies. For more info SHARE ANALYSIS: COH

World Overnight
SPI Overnight (Sep)	5999.00	– 35.00	– 0.58%
S&P ASX 200	6057.90	+ 25.20	0.42%
S&P500	3130.01	+ 14.15	0.45%
Nasdaq Comp	10207.63	+ 53.00	0.52%
DJIA	25827.36	+ 92.39	0.36%
S&P500 VIX	27.68	– 0.94	– 3.28%
US 10-year yield	0.67	– 0.01	– 1.91%
USD Index	97.17	– 0.06	– 0.06%
FTSE100	6157.30	– 83.06	– 1.33%
DAX30	12528.18	– 80.28	– 0.64%

By Greg Peel

Weekend Wane

Another positive night on Wall Street had the ASX200 shooting up in the first hour by a rather enthusiastic 70 points to hit 6100, which was a trigger for the sellers. By 2pm the index was down -10 points, with only a late flurry saving the day.

At first glance it appears the market swung sharply into defensive mode, with healthcare closing up 2.3%, telcos 2.6%, staples 1.3% and utilities 0.8%, outperforming other sectors. But there were individual stock tales to tell.

While the usual suspect had a positive session to help healthcare along, an index-topping 5.9% for Cochlear ((COH)) added the fuel. The company announced FDA approval for four new devices to be launched in the US and Europe in the next few months.

In telcos, Telstra ((TLS)) announced price rises for post-paid mobile and rose 4.0%.

Staples were lifted by strength on supermarkets as Victoria locks down further and eats more Vegemite. Bega Cheese ((BGA)) rose 5.1% to be second best index stock on the day.

Energy (-0.9%) was the biggest loser along with industrials (-0.4%), while materials (flat) had to offset a -25.4% plunge for Adbri ((ABC)) after Alcoa informed the company would not be renewing its lime contract expiring mid next year, worth $70m in annual revenue.

Consumer discretionary (+0.2%) seemed unexcited by a 16.9% jump in retail sales in May, largely offsetting the fall in April, but the ABS had already released preliminary numbers and the data pre-date the re-lockdowns in Victoria.

Meanwhile, things aren’t getting any better in Victoria, or the US, or South America, and now two regions have Spain gone into re-lockdown.

Donald Trump has clearly decided the only way he’s going to win the election is by cementing his hard nut base while alienating everyone else.

With the US closed on Friday one might expect a slow start today but our futures closed down -35 points on Saturday morning without any lead.

Commodities

Spot Metals,Minerals & Energy Futures
Gold (oz)	1774.40	– 0.10	– 0.01%
Silver (oz)	18.02	+ 0.10	0.56%
Copper (lb)	2.71	– 0.04	– 1.52%
Aluminium (lb)	0.72	– 0.01	– 1.03%
Lead (lb)	0.80	+ 0.00	0.03%
Nickel (lb)	5.81	+ 0.00	0.04%
Zinc (lb)	0.91	– 0.01	– 0.89%
West Texas Crude	40.32	+ 0.03	0.07%
Brent Crude	42.80	+ 0.04	0.09%
Iron Ore (t) futures	100.45	0.00	0.00%

With the US closed, very little action.

The Aussie is as good as steady at US$0.6934.

The Week Ahead

It’s a relatively quiet week this week both economically and in terms of scheduled corporate updates or announcements, not to say there can’t be any.

Australia will see job ads today for June and May housing finance numbers on Thursday. The RBA holds a policy meeting tomorrow.

The US will catch up with its services PMI tonight and release its June PPI on Friday.

China releases inflation numbers on Thursday, following a surprise Caixin reading on China’s services PMI released on Friday, showing an increase to 58.4 from 55.0.

Charter Hall Retail ((CQR)) holds an EGM on Thursday.

The Australian share market over the past thirty days…

BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS
BSL	Bluescope Steel	Downgrade to Underweight from Equal-weight	Morgan Stanley
HUB	HUB24	Downgrade to Neutral from Outperform	Credit Suisse
IAG	Insurance Australia	Upgrade to Buy from Neutral	UBS
MFG	Magellan Financial Group	Upgrade to Neutral from Underperform	Credit Suisse
NWL	Netwealth Group	Downgrade to Underperform from Neutral	Credit Suisse
SAR	Saracen Mineral	Downgrade to Hold from Accumulate	Ord Minnett
SGR	Star Entertainment	Downgrade to Neutral from Outperform	Credit Suisse
SUN	Suncorp	Downgrade to Underperform from Neutral	Credit Suisse
		Downgrade to Hold from Add	Morgans
TCL	Transurban Group	Upgrade to Accumulate from Hold	Ord Minnett
WHC	Whitehaven Coal	Upgrade to Buy from Neutral	Citi

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