ASX rallies hard into the break – Happy Easter all
WHAT MATTERED TODAY
Firstly, on behalf of all the team at MM we wish you a safe and Happy Easter, enjoy the very ‘different’ Easter experience this year. I’m off camping with the kids in the back yard!! Our next report will be out Tuesday morning.
Some strong moves across the market today particularly for a Thursday heading into a 4 day break. An obvious change in sentiment with risk sectors doing best while the areas of the market that have held up well into the panic sell-off, the consumer staples and the like are being used as funding vehicles – resources also fit that bill to some degree today.
The market has been resilient this week largely due to an improving COVID-19 situation – something we cover below – however we’ve also seen a raft of capital raises get away, both in the equity and bond markets. G8 Education (GEM) the latest company out with an equity raise ($300m) today while Transurban (TCL) had a good session today up +10% after raising debt on favourable terms. Retailers are also seeing some buying thanks to better rhetoric from our political leaders around restrictions.
Here is a quick 7min video summing up todays trade – click here
Today the ASX 200 added +180pts /+3.46% to close at 5387 - Dow Futures are trading up +120pts/+0.55%
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE:
VIRUS STATS: (From Martin Crabb) It seems rather clear now that the spread of COVID-19 is slowing, and focus will now turn to “active” cases rather than infections. Active cases are what drives demand for hospital beds and Intensive Care Units so arguably it is a more relevant number.
Total Infection Curves are flattening. We exclude China/Korea and Iran from our Global analysis due to the early containment in the former two countries and the non-logarithmic pattern of cases in Iran. Our model suggests peak new infections today at 86,000.
If we look at the exponential rate of growth in different jurisdictions, we note a deceleration in the past few days.
Focusing on the “ex” jurisdictions…
Now turning to active cases, we showed with China that there was a 23-day lag between new infections and change in actives. This also applies in the South Korean example.
That is, active cases will fall by the inverse of new infections 23 days ago. Using this relationship and adjusting for mortality rates and population sizes, we can estimate peak active cases in different countries and regions.
First, World ex China/Korea/Iran – suggests a peak in 9 days.
Importantly for markets, USA is expected to peak on the same date.
Australia has already peaked.
Sectors this week
Source: Bloomberg
Stocks this week
Source: Bloomberg
BROKER MOVES:
- JB Hi-Fi Raised to Buy at UBS; PT A$39.70
- Navigator Global Cut to Neutral at Macquarie; PT A$1.72
- Whitehaven Cut to Neutral at Macquarie; PT A$2.10
- Treasury Wine Cut to Underperform at Macquarie; PT A$9.50
- New Hope Cut to Neutral at Macquarie; PT A$1.50
- Lifestyle Communities Raised to Buy at Canaccord; PT A$7.50
- Reject Shop Raised to Equal-Weight at Morgan Stanley; PT A$2.60
- BHP Raised to Buy at Clarksons Platou Securities Inc; PT A$36
- Bank of Queensland Cut to Underperform at Jefferies; PT A$4.40
- SmartGroup Raised to Outperform at Credit Suisse; PT A$5.90
- Flight Centre Raised to Buy at Bell Potter; PT A$11.50
- Altium Cut to Hold at Bell Potter; PT A$33.50
OUR CALLS
No changes
Major Movers Today
Have a great night
James, Harry & the Market Matters Team
Disclosure
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