Home / Growth assets / ASX budget bounce, IPOs closing in

ASX budget bounce, IPOs closing in

Growth assets

ASX budget bounce, a long list of winners, IPOs closing in, US markets hit one month high
 
The ASX 200 (ASX:XJO) overcame a weak lead form the US to deliver its strongest budget bounce since 2002, jumping 1.3%.

It will likely take several weeks to digest the true implications of this budget, particularly those sectors that missed out. But today, it was all about the consumer, property and banking sector.

Both the discretionary and staples sectors rallied 2.2%, with furniture retailer Temple and Webster Ltd (ASX:TPW) and Woolworths (ASX:WOW) identified as key beneficiaries, adding 9.5% and 2.0% respectively.

Initial estimates suggest that the announced tax cuts will add $6.9 billion to disposable incomes in 2021, it’s yet to be seen whether consumers will have the confidence to spend this or will increase savings in line with the post-GFC experience.

The banking sector benefitted from the jobs-focused budget and hopes that the Victorian economy may be returning to normal, with ANZ Banking Group Ltd (ASX:ANZ) leading the way, up 2.4%.

In my view, the budget was good news for an economy that needs a real injection, but lacked the real innovation and leadership required to push the Australian economy into the future.
 
The biggest losers, more inflows for Magellan Financial Group (ASX:MFG), has property bottomed?
 
Whilst there were plenty of winners from, there are a number of clear losers, with the travel and leisure sector offered little in the way of support. As highlighted on last night’s coverage, there is little value in tax write-offs if you don’t have any revenue. 

Qantas Ltd (ASX:QAN) fell 0.6% on the news, whilst Flight Centre Ltd (ASX:FLT) remains under pressure, falling 0.7% despite hopes of intra-Australian travel returning sooner rather than later.

The other clear beneficiary has been trade and construction exposed businesses, or those with substantial capital requirements.

Recycling and waste management group Cleanaway Ltd (ASX:CWY) rallied 4.8% on hopes of a boost to residential construction and Seek Ltd (ASX:SEK) added 4.2% as job advertisements are expected to rise following the $200 per week trade credit announced.

I’m not confident enough is being done to boost those businesses that have been devastating by the lockdowns, particularly smaller retailers, restaurants and tourism providers, nor that the changes will be sufficient to offset the expected reduction in immigration in the years ahead. Only time will tell.
 
The tweets continue, triggering new highs, spotlight on ANT Financial
 
President Trump got straight back to work unleashing a series of tweets around one off stimulus payments.

He flagged support for the beleaguered airline sector and another one off stimulus cheque, that he would sign off personally.

The result was a risk on mood, the S&P 500 finishing 1.7% higher and the Nasdaq 1.9%, near one month highs.

Just fifty one companies fell on the S&P 500 with the pressure focused on real estate and energy utilities.

The White House has also ramped up pressure on the impending IPO of mega fintech ANT Financial, owned by Alibaba Inc. (NYSE:BABA) indicating it has been seeking options to restrict the sharing of payment information, similar to its restrictions on We Chat, owned by Tencent.

The difficulty remains in working out how this is possible and legal, hence both share prices headed higher, by 2.9% and 1.4% respectively.

Levi Strauss (NYSE:LEVI) delivered an earnings update highlighting its strong online growth, 50% for the quarter, as consumers seem to be pivoting from active wear to casual wear.




Print Article

Related
ASIC levy review targets adviser ‘time-lag’ issue

The review will consider “the consequences of time lags between regulatory action and cost allocation”, the terms of reference states.

Tahn Sharpe | 11th Aug 2022 | More
AMP Advice to ‘break even’ by 2024 as losses soften

The institutional provider’s AUM and profit lines stayed red in 1H22, but positive signs emerged.

Tahn Sharpe | 11th Aug 2022 | More
INBrief with Gabriel Carey from Cadre Capital

Gabriel Carey from Cadre Capital speaks with Jamie Nemtsas at The Inside Network’s Income & Defensive Assets Symposium.

The Inside Adviser | 10th Aug 2022 | More
Popular
1
Advisers urged to tread carefully with ‘wholesale investor’ status
Staff Writer | 28th Jul 2022 | More
2
Top hedge fund award goes to L1 Capital
Greg Bright | 13th Dec 2021 | More
3
MAX Award winners and the new world outside
Greg Bright | 13th Jun 2022 | More
4
Quality of advice review focused on advisers, not consumers
Drew Meredith | 11th Jul 2022 | More
5
INDepth with Andrew Lockhart from Metrics Credit Partners
The Inside Adviser | 30th Jun 2022 | More