The S&P/ASX 200 (ASX: XJO) is tipped to open higher on Friday after US markets rebounded overnight. Here’s your daily ASX morning report.
ASX 200 recap
It’s looking like a tough end to October after what has been a very strong month. The ASX 200 fell 1.6% on Thursday due to a weak global lead. As highlighted, new economic restrictions are combining with a market that has rallied heavily, seeing a spike in volatility.
The energy sector, -2.9%, has been the hardest hit with the oil price falling below US$40 once again.
Seek Limited (ASX: SEK) was the news of the day as it has come under a highly publicised short attack from ‘Blue Orca’, an activist firm. SEEK shares were down as much as 11% yesterday before being halted down 5.7% for the day after it was claimed its Chinese job site was full of ‘junk listings’ that maintain the illusion of growth; strong words. That said, the business recorded revenue of $749.6 million in 2020 which cannot be easily fabricated, so expect a strong reply from management.
JB Hi-Fi disappoints, ANZ’s dividend intact but profit falling
Management of retailer JB Hi-Fi Limited (ASX: JBH) announced a strong report for the first quarter of the new financial year, with sales up 26.7% across all its stores. The highlight was Australia where sales increased 27.3% despite its entire Melbourne store network being closed for an extended period. Following the trend of recent months, whitegoods retailer The Good Guys is seeing a large share of diverted travel spending, sales were up 30.9%. Key brokers have suggested that the growth rate implies a real slowing in sales in August and September, prompting a 6.2% sell-off in the JB Hi-Fi share price.
ANZ Banking Group Ltd (ASX: ANZ) was the latest to deliver its full-year result, announcing a 42% fall in cash profit to $3.7 billion with statutory profit down a similar level to $3.57 billion. The biggest driver was the $2.74 billion in impairments as it sought to write off potential bad debts and some $815 million in value of its failed Asian expansion. Importantly, a dividend of 35 cents per share was announced, down from 80 cents, and some 80% of loan deferrals are set to return to normal repayments.
US GDP surprises, market rallies ahead of tech earnings
The US economy grew at a record pace in the third quarter, adding 7.4% for a 33.1% annual rate. It has now recovered almost two-thirds of the ground lost due to economic shutdowns and has done so without additional stimulus.
Similarly to Australia, the driver has been consumer spending, spurred on by travel restrictions, with durable good spending up 82.2% in the quarter alone.
The result was a strong rally in sharemarkets, the NASDAQ 100 finishing 1.9% higher and the S&P 500 1.2% as confidence returns.
China released the first details of its next five-year plan, targeting quality rather than speed of economic growth with the country to become a powerhouse of technology.