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S&P/ASX 200 to fall – ALD, CIM & CSL shares in focus

The S&P/ASX 200 (ASX: XJO) is expected to slide when the market opens this morning according to the latest SPI futures. Here’s what you need to know.

ASX 200 hits seven-month high

The ASX 200 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 Limited (ASX:ASX: CSL) rallied 1.7%, contributing most to the market, ahead of an anticipated research and development presentation to be released this morning. These updates provide insights into the potential monetisation of the group’s ~$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 for $1.7 billion 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 feeling the heat, Ampol 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 Chinese economy is ahead 0.7%, a remarkable result.

Staying with China, Crown Resorts Ltd (ASX: CWN) shares fell 8.2% on Monday after extensive hearings flagged the potential for an AUSTRAC investigation into anti-money laundering breaches.

Elsewhere, Ampol Ltd (ASX: ALD), which both refines and distributes fuel, delivered a better than expected result. Ampol reported 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

The ‘will they or won’t 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 share market 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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Are you stuck wondering where to invest right now? Have you got cash 'sitting on the sidelines'? Are you looking for dividend income AND growth but don't know where to start? Rask's expert ASX analyst team has just released a full report, detailing where we'd invest $10,000 right now.

Not only are we offering these 11 investment ideas completely FREE, we've also released an in-depth podcast to go with the report!

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Disclosure: At the time of publishing, Drew owns shares of CSL.

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