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S&P/ASX 200 morning report – ASX energy & travel shares in focus

The S&P/ASX 200 (ASX: XJO) is expected to push higher when the market opens on Wednesday. Here’s what ASX investors need to know.

ASX 200 delivers more gains, oil price hits nine-month high

The ASX 200 saw another strong day, adding 1.3% on the back of the ‘trifecta’ of COVID-19 vaccines, with hopes for an economic recovery resulting in the oil price hitting a nine-month high. As can be expected, ASX energy shares benefitted most, the sector up 3.5% on the news.

The Beach Energy Ltd (ASX: BPT) share price increased 8.2%, whilst Origin Energy Ltd (ASX: ORG), which looks to be key to a gas lead recovery, added 5.2%. Santos Ltd (ASX: STO) also received approval for its controversial Narrabri gas exploration program, the share price improving 3.9% on the news.

Domestically, it was news of the Queensland border reopening that spurred a recovery in the travel sector, with the Webjet Limited (ASX: WEB) share price adding 4.7% on the news.

The gold sector remains under pressure with the AUD hitting a 3-month high of $0.73 against the USD, sending Newcrest Mining Limited (ASX: NCM) shares down 6.1%. Despite the current rotation, gold bullion, as opposed to gold stocks, should continue to play a key role as the threat of inflation rises in the coming years.

Brickworks delivers, TechnologyOne considers special dividend

Brickworks Limited (ASX: BKW) delivered one of the strongest updates of AGM season, reporting a 93% increase in net profit to $299 million, despite underlying profit falling 38% to $146 million due to 2019’s property gains. Back in September, management elected to increase the dividend by 4% on the back of the incredible success of Brickworks’ partnership with Goodman Group (ASX: GMG).

The company has partnered with Goodman to build custom distribution centres for the likes of Amazon (NASDAQ: AMZN), with its stake now valued at $727 million of a $2.0 billion asset base. Management now estimates the property asset backing of Brickworks shares is $25.24, well above the current Brickworks share price but importantly, its domestic building products division is ahead of 2019 volumes. Brickworks shares finished 4.0% higher.

TechnologyOne Limited (ASX: TNE) released its FY20 results, flagging the potential for a special dividend despite increasing its ordinary dividend by 8% on 2019 levels. The company reported strong demand for its enterprise management platform, as councils, governments and corporate sought to digitise. Underlying profit increased 13% to $86.1 million on the back of a 32% increase in recurring revenue to $134.6 million.

Dow Jones reaches all-time high, US markets provide strong lead

The Dow Jones Industrial Average, a 30-stock index with a traditional focus on more cyclical, old fashioned companies, reached an all-time high of 30,000 points on Tuesday, with the 124-year-old Boeing Inc. (NYSE: BA) a key contributor.

The rally came on news of a third vaccine candidate, the fastest annual growth rate in US home prices in September at 7%, and confirmation that the White House had begun the process of transition to a Democratic president.

The S&P 500 and Nasdaq also added 1.6% and 1.5%, respectively, with growing confidence that the worst is over despite the threat of the impending Thanksgiving Day being a super spreader event for COVID-19.

In a sign that not all Chinese companies are losers from the trade war, smartphone maker Xiaomi (HKG: 1810) reported a 35% increase in sales in the third quarter, with the majority outside China, as the company grew market share at Huawei’s expense. According to analysts, global shipments of Xiaomi’s phones increased 42%, well ahead of Apple (NASDAQ: AAPL) and Samsung (KRX: 005930).

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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!

So, whether you have $2,000 or $50,000, our brand new analyst report could help transform your watchlist. Right now, you can get the full analyst report emailed to you for FREE by CLICKING HERE NOW.

Disclosure: At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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