ASX charts new highs despite Delta blues

Another record, another lockdown, Nick Scali, Pinnacle dominates

The ASX 200 (ASX: XJO) managed to eke out another consecutive record finish, despite adding just 8 points and finishing 0.1% higher.

It continues a positive start to the month, driven by seven of the eleven key sectors finishing higher. This comes despite Victoria entering its sixth lockdown, another seven day ‘circuit breaker’.

The property sector continues to defy expectations, delivering the strongest performance today, up 1%, with the likes of Goodman Group (ASX: GMG) and Vicinity Centres (ASX: VCX) up 1.8% and 0.6% respectively.

The support seems to be coming from hopes that bond rates will remain muted for the foreseeable future and benefits from the lack of dedicated office trusts on the market, with the sector clearly hurting more than most.

The oil price continues to fall as the delta lockdowns expand, with the sector falling 1.2% behind Woodside Petroleum Limited (ASX: WPL), down 1.5%, and both Santos Ltd (ASX: STO) and Oil Search Ltd (ASX: OSH) down over 1%.

Oil Search was hit with another curveball in its difficult merger deal, with the PNG Government exposing geopolitical risk by suggesting any deal had to be ‘in their best interests’; probably one to capitalise on now.

Funds management pays, sofas, dining tables in high demand

Pinnacle Investment Management Group Ltd (ASX: PNI) was the market leader as it makes a push for the ASX 100, with shares jumping 9% on a market update.

The group takes 49.9% ownership stakes in various fund managers, sixteen as of today, and provides them with back-office and distribution support.

They own part of Coolabah Capital, Hyperion, and Firetrail among others, and reported a 52% increase in assets under management to $89.4 billion over the financial year. This saw revenue double, adding 108% to $67 million.

Whilst $14 billion was driven by the strong performance of their equities, they attracted $16.7 billion in inflows, something every major fund manager would be seeking. The dividend also increased to 28.7 cents.

Furniture retail Nick Scali Limited (ASX: NCK) fell by 0.8% despite reporting a doubling of profit to $84.2 million on the back of a 42% increase in revenue, which hit $373 million.

That said, the dividend was only increased by around 37% as management grew increasingly concerned about huge increases in freight costs. Online sales, launched amid the pandemic, delivered just 7% of full-year profits.

Unemployment spurs markets, Zillow, Booking.com surges on higher trade, Robinhood’s options

All three US markets surged on Thursday as earnings season comes to an end, with Latin American Amazon, Mercadolibre Inc (NYSE: MELI) delivering solid earnings results.

The result was an outperformance by the Nasdaq and Dow Jones, up 0.8% each, compared to a 0.6% gain in the S&P 500.

Positive news about the economy continues, with unemployment benefit claims falling by 14,000 to 385,000 and continuing claims falling below 3 million people.

Hotel reservation group Booking Holdings Inc (NASDAQ: BKNG) and real estate platform Zillow Group Inc (NYSE: Z) were the biggest reports, with the former reporting a 458% increase in room night reservations for the 12 months to June, the first such year-on-year growth since before the pandemic.

This comes after an 87% fall in bookings, reflecting US$22 billion in transaction volume and a tripling of revenue to $US2.16 billion for the beleaguered company, often seen as a leading indicator for consumer confidence and the economy.

The US version of Realestate.com.au, called Zillow (NYSE: Z) smashed expectations and is now flagging its first US$2 billion revenue quarter. The group reported a near doubling of revenue to US$1.31 billion on the back of a 70% increase in home listings.

The platform’s unique Zillow Offers option, through which they actually become a buyer of last resort, also saw revenue jump 71% as remote working and low-interest rates converge for a property boom.

The Inside Adviser