Home / Growth assets / ASX update; ASX 200 higher

ASX update; ASX 200 higher

Growth assets

Loosening the reins, ASX 200 higher, banks rally, US recovers on stimulus hopes
The ASX 200 (ASX:XJO) staged a stunning recover, finishing the day 1.5% higher leading to a 1.7% improvement for the week.

The financial sector, up 3.7%, contributed over half the recovery on its own, ANZ Banking Group Ltd (ASX:ANZ) and National Australia Bank Ltd (ASX:NAB) adding over 6% after the Treasurer announced that ‘Responsible Lending’ laws established in 2009 would be repealed.

These regulations effectively limited bankers discretion on assessing the spending habits of borrowers and according to source have been a handbrake on loan applications in recent years.

The change bodes well for stability in the property market, particularly when combined with all-time low borrowing rates.

The materials sector also recovered, adding 1.9%, as iron ore and the gold price improved, but finished the week down 2.3%.

Newcrest Mining Ltd (ASX:NCM), up 3%, lead the way with the USD gold price fall offset by a 3% fall in the AUD over the week. As highlighted Washington H Soul Pattison (ASX:SOL) and Service Stream Ltd (ASX:SSM) lead the market, +14.4% and 12.2% on company specific news.
Calling for more stimulus, stay at home trade finished higher, cruising into 2021
It was another mixed week for US markets, the S&P 500 finished 0.6% lower despite a 1.6% recovery on Friday, as signs of a slower economic recovery hit confidence.

Once again, the Nasdaq outperformed, 1.9% higher for the week and up 2.3% on Friday, as discussions on another $2.2 trillion stimulus package recommenced.

Markets remains mixed, with the so-called ‘stay at home’ trade including Microsoft (NASDAQ:MSFT) and Zoom Video Communications (NASDAQ:ZM) benefitting from economic restrictions.

On the other hand, more cyclical businesses including energy and financials had another tough week as COVID-19 cases continue to spike on both sides of the Atlantic.

The leisure cruising sector rebounded on Friday, Carnival Cruises (NYSE:CCL) up 9.7% after research house Barclay’s suggested the sector may be nearing an end to restrictions as they institute extensive safety policies.

Back in Australia, the Solomon Lew run Premier Investments Ltd (ASX:PMV) reported record online sales of $220 million, a 49% increase which contributed to a 29% increase in profit for the financial year to $138 million.
Climate and energy policy in focus, deficits the new normal, volatility is just beginning
My three takeaways this week start with the renewed focus on climate and energy policy.

Whether it was the Federal Government putting forward an ambitious energy policy and innovation agenda or Wesfarmers Ltd (ASX:WES) it’s clear that the post pandemic recovery will be powered by a push to a more sustainable economy.

Something we discussed on our podcast during the week. As highlighted by ex-Prime Minister Paul Keating during the week, if there has ever been a time to for the Government to run deficits it is now.

Keating aggressively put forward the case for a focus on saving jobs by any means necessary, putting pressure on the RBA to do much more.

It is this willingness to undertake fiscal stimulus that will determine which countries recover more quickly from the second and subsequent waves of the virus.

Finally, it’s clear that volatility is just beginning. After several months of strong recovery, the ‘wall of worry’ lies ahead as economies continue to diverge.

In this environment alternative assets will play an important role, but not all are created equal.

Print Article

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