Global sharemarkets continued their incredible rally even as protests and riots continued in the US, following President Trump’s call to bring in the military. The Dow Jones added 1% and the S&P 500 0.8%, with two companies increasing for every one that fell. The highlights remained the cyclical businesses, with American Express (AXP:US) and Caterpillar (CAT:US), pushing higher as shutdowns eased.
The ASX 200 recovered 0.3%, despite a mixed day but with most sectors flat it was the retail exposed businesses like Unibail-Rodamco-Westfield (ASX:URW) moving higher. The likelihood of another $500 billion in stimulus in Europe sent the Eurostoxx (SX5E:IND) up over 2.6% on the back of a strong banking sector; ING Groep (INGA:NA) rallied 3%.
Zoom Video Communications (NASDAQ:ZM), the platform that has become ubiquitous during this Work From Home (WFH) experience continued its incredible rally hitting another all-time high and tripling in 2020. Management reported a 169% increase in quarterly revenue to $328 million and now expects the full year result to be $1.775 billion, double that originally forecast.
Australia’s own technology darling Zip Co Ltd (ASX:ZIP), one of the few competitors to Afterpay (ASX:APT) saw its rally close to 40% on Wednesday after announcing the acquisition of New York-based Buy Now Pay Later (BNPL) platform Quadpay, for $403 million. The acquisition will be funded from a $200 million capital raising and position ZIP as a true global player in the sector with some $3 billion in total transaction value expected.
The group of Virgin Australia Holdings Ltd (ASX:VAH) suitors was reduced to two on Tuesday, with Bain Capital and Cyrus Capital Partners the lucky two. Both have indicated a preference to retain the Virgin branding and will seek to partner with Richard Branson. The Kerry Stokes owned Seven Group Holdings (ASX:SVW) announced it had acquired a substantial but ‘friendly’ stake in embattled cement producer Boral Ltd (ASX:BLD), once again opening the discussion on acquisition activity.
Amaysim (ASX:AYS), the provider of mobile phone and energy plans through is Click Energy business, refused to comment on rumours of a takeover offer from Origin Energy Ltd (ASX:ORG), but that didn’t stop the share price from increasing 12% for the day. Finally, Wednesday will see the long awaited GDP figures for the Australian economy, with experts predicting a contraction of just 0.2% to 0.3%.
The daily report is written by Drew Meredith, Financial Adviser and Director of Wattle Partners.