The Monday Report – 26 October 2020

Daily Market Reports | Oct 26 2020

By Greg Peel

Biden its time

It was a predictably quiet day for the ASX200 on Friday as investors concentrated on the presidential debate and the day’s quarterly reports from individual companies. A 0.5% gain for the banks went a long way to offsetting weakness in most other sectors.

Energy was nonetheless the strongest performer (+1.1%) helped by a 4.4% gain for Cooper Energy ((COE)) and 3.9% for Santos ((STO)).

BlueScope Steel ((BSL)) shot the lights out with its update after upgrading guidance, sending its shares up a chart-topping 10.9%. The materials sector nonetheless fell -1.0% to be the worst performer on the day, with gold miners providing three of the top five index loser positions.

Iluka Resources ((ILU)) appeared at the top of the losers’ board with a -48.3% dip, but fear not, it was simply reflective of the spin-off of Deterra Royalties ((DRR)). Combined, the value of the two was a slight gain on the day and thus did not impact on the sector.

There was hopeful news from both Qantas ((QAN)) and Webjet ((WEB)). Qantas is hopeful the airline will return to 50% capacity by Christmas, assuming the NSW-Queensland border is opened by then as is the aim of the National Cabinet, which met on Friday. Webjet said it saw pent-up demand for travel services and products increasing. Qantas rose 2.7% and Webjet 3.6%.

Moves in other sectors were all less than -0.5%.

There was disappointing news yesterday when Captain Dan decided to postpone his planned significant easing of restrictions in Melbourne due to a disturbing cluster in the north of the city. Given the amount of flack he’s already copped, I hope he has bodyguards.

Recent strength in the local market has to some extent been driven by anticipation of a Melbourne reopening, so there may be a negative response this morning. The futures closed up 18 points on Saturday morning, ahead of yesterday’s announcement.

We’ve also had news this morning Joe Biden’s top aide has tested positive, but that the man himself has tested negative. We’ll have to wait until tonight to see how Wall Street feels about that one. It’s not such a surprise, given the US case-count in general continued to set new daily records over the weekend.

As for the debate, it scored a “non-event”.

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