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ASX 200 hits seven month high

Daily Market Update

ASX 200 hits seven month high, CSL (ASX:CSL) bounces, Cimic (ASX:CIM) sells Thiess, weaker open ahead

The ASX 200 (ASX:XJO) rallied 0.9% to start the week, buoyed by the hope of Victorian economic restrictions being lifted at the end of the month. 

The index has reached a seven month high as a confluence of domestic and global events, along with fiscal policy support the economy. 

  • Healthcare, +1.6%, and industrials were the biggest beneficiaries, as investors turned back towards cyclical businesses.  

    CSL Ltd (ASX:CSL) rallied 1.7% contributing most to the market, ahead of an anticipated Research and Development presentation to be released tomorrow. 

    These updates provide insights into the potential monetisation of the groups c$1 billion in annual investments. 

    Multinational contractor Cimic Group Ltd (ASX:CIM) rallied 8.2% after announcing the sale of 50% of mining contractor Thiess Ltd, for $1.7 to $1.9 billion. 

    It’s hard to get a read on this one, but it looks like an engineering company looking to reduce its exposure ahead of an uncertain period ahead.

    Crown Resorts (ASX:CWN) feeling the heat, Chinese economy recovery continues, Ampol Ltd (ASX:ALD) rallies

    Chinese GDP growth continues to support a strong economic recovery in the US, despite concerns about tariffs being applied on individual sectors. 

    The economy advanced 4.9% in the September quarter, faster than the 3.2% in June but below the 5.5% expected. 

    There are signs of a consumer-driven recovery with retail sales growing 3.3% in September on 2019 levels and industrial production spiking 6.9%. 

    Year to date the economy is ahead 0.7%, a remarkable result. 

    Staying with China, Crown Resorts fell 8.2% today after the extensive hearings flagged the potential for an AUSTRAC investigation into Anti-Money Laundering breaches. 

    Ampol Ltd (ASX:ALD) which both refines and distributes fuel delivered a better than expected result, a $24 million profit in the third quarter, despite refining delivering an $82 million loss. 

    The highlight was strong margins in the convenience and retailing business suggesting the company was able to hold onto the profit margin amid falling global oil prices.

    US markets stumble, Brexit negotiations back on, lockdowns continue to bite

    The will they or wont they of fiscal stimulus continues to dominate headlines and sentiment. 

    With no agreement in place it’s safe to assume we will not be seeing any progress before the election despite the US economy clearly needing it. 

    US falls will send global stocks lower on Tuesday, the Nasdaq off 1.9% and the S&P 500 1.6%; the lowest point in two weeks. 

    On the positive side the British Government changed course averting concerns that a no deal Brexit would send the economy into a tailspin. 

    European markets still fell, the FTSE 100 down 0.6%, as local governments consider the benefits of a two or three week country wide lockdown. 

    IBM Corp (NYSE:IBM) will be the latest company to report earnings after the market closes.

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