The Morning Report

Updated Tuesday 29th September 2020

GLOBAL MARKET WRAP

The S&P 500 rose 53pts overnight to close 1.6% higher at 3,352, as investors remained optimistic that an additional US fiscal stimulus package would eventually be agreed upon. The Energy sector was the strongest performer (+2.3%). The US 10-year treasury yield was flat at 0.65%, while the USD Index fell 0.4% to 94.28 this morning.

Coronavirus update – The latest data from the World Health Organisation (WHO) showed the number of confirmed coronavirus cases was 33,034,598 rising by 302,277 yesterday. The WHO announced yesterday that rapid COVID-19 tests are set to be rolled out globally, providing results in as little as 15 minutes, a move which could potentially save many lives and slow the spread of the pandemic in both rich and poor countries.

US: The trade balance is expected to widen from a deficit of $79.3 billion in July to $82.6 billion in August, while consumer confidence is expected to improve 4.0pts to 88.8.

Eurozone: Economic sentiment is expected to rise 1.8pts to 89.5 in September.

Germany: CPI is expected to fall 0.1% in September, while the yearly rate is expected to fall from 0.0% to a 0.1% contraction.

LOCAL MARKET WRAP

The ASX 200 fell 13pts yesterday to close 0.2% lower at 5,952, with the Consumer Staples sector the weakest performer (-2.2%). The SPI Futures Index is trading 38pts higher this morning at 5,982. The 10-year treasury yield fell 3bps to 0.77% and the AUDUSD rose 0.6% to 0.7071 this morning.

Coronavirus update – The total number of cases rose by 5 yesterday to 27,044 with 5 of them in Victoria, and the number of active cases falling to 455. Chairman of the Australia New Zealand Leadership Forum, Ann Sherry, said the New Zealand travel bubble that will allow travel from Sydney to Auckland should be up and running by the end of the year and would be a test case for other countries.

Resolute Mining Limited (RSG) provided an update yesterday noting that negotiations with the Union Nationale des Travailleurs du Mali has resulted in the signing of a conciliation agreement which confirms the cancellation of further strike action at Syama. Following the agreement, operations at Syama have returned to normal, while the total expected delay in Syama’s production for the September quarter is expected to be 15,000 ounces of gold. Total FY20 production is now expected to between 400,000-430,000 ounces of gold at an AISC of between US$980-1080 per ounce. RSG shares rose 5.0% to close at $0.96.

CIMIC Group Limited (CIM) announced yesterday that its 50% owned associate, Ventia, has been awarded an 18-month extension of its contract providing asset maintenance services to the NSW Land and Housing corporation, taking the expiry date to December 2022. The extension is expected to generate a base contracted revenue of $124 million for Ventia, with the opportunity to provide additional program work volumes of $160 million subject to proceeding with further approvals. CIM shares rose 0.7% to close at $19.43.

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