Market Insights – 28th October 2019

Market Insights – 28th October 2019

Market Insights

28th October 2019

Top Stocks

CODE PRICE MOVEMENT   CODE PRICE MOVEMENT
CBA $80.70 1.89%   NAB $29.18 2.06%
BHP $35.77 2.79%   TLS $3.56 0.00%
WBC $29.05 1.11%   WES $41.05 1.99%
RIO $90.81 3.79%   CSL $256.77 2.65%
ANZ $28.03 1.37%   WOW $37.93 1.58%

Market and Exchange Rates

MAJOR FOREIGN MARKETS   AUSTRALIAN DOLLAR IS BUYING
All Ords 6,841.00 0.65%   US Dollar 0.6820
Dow Jones 26,958.06 0.57%   Euro 0.6154
FTSE-100 7,324.47 -0.05%   GB 0.5322
Nikkei 22,799.81 0.22%   Yen 74.2023

Commodities

Oil (WTI) 56.560 1.00%
Gold 1,385.000 0.20%
Iron Ore 90.110 0.12%

Major Market Announcements

– U.S. stocks rose on Friday after Washington said it was close to finalizing parts of a trade pact with Beijing and strong quarterly results from Intel Corp (INTC.O) boosted investor sentiment, sending the S&P 500 briefly over the record high close it set three months ago.

– A Federal Government scheme to allow first home buyers to purchase a property with a deposit as little as 5 per cent will operate on a “first-in, best-dressed” basis. The Government has today unveiled details of the scheme aimed at helping up to 10,000 first home buyers on low and middle incomes enter the market each year from January 2020.

– ResMed shares have soared almost 15 per cent to an all-time high after the medical device maker announced first-quarter operating profit was up 19 per cent to $US171.1 million ($A250 million). ResMed, which makes products to treat sleep apnea, said revenue for the three months to September 30 rose 17 per cent on a constant currency basis to $US681.1 million ($A999 million).

– Australia’s telecommunications bridesmaid, Optus, has given a leg-up to Australia Post’s struggling letters business after it took to snail mail to tell around 50,000 customers their mobile phone numbers had been wrongly published – in the White Pages printed telephone books. 

– Australia is set to get a new international subsea data cable system called the Oman Australia Cable, which is to be built by a new company founded by telecommunications entrepreneur Bevan Slattery.

– The Myer class action judgment handed down this week was about as landmark as it gets. It was the first class action brought by shareholders in a listed company in this country to go to judgment. The first not to be settled by a rattled company convinced that when push came to shove the court would find their alleged misdeeds came with a hefty price.

Market Update

The Australian sharemarket has closed higher for a fifth straight day – and added more gains than the rest of the week combined.

The S&P-ASX 200 index finished Friday up 45.6 points to 6,739.2, while the all ordinaries was up 44.3 points to 6841.

“The Aussie sharemarket is flexing its muscles in the mirror compared to a lacklustre session from Wall Street,” said Bell Direct market analyst Jessica Amir.

For the week the market gained 89.5 points, or 1.35 per cent, for its third straight week of gains.

Health care stocks were the standout, with the sector gaining 1.8 per cent following strong first-quarter results from ResMed.

The sleep apnea mask manufacturer surged 11 per cent to an all-time closing high of $20.65 after announcing its profit was up 19 per cent to $A250 million.

CSL gained 1.6 per cent to $256.77, Clinuvel rose 5.8 per cent to $32.17 and Paradigm Biopharmaceuticals gained 5.6 per cent to $2.82 after receiving approval to treat 10 retired NFL players with its experimental knee osteoarthritis drug.

Every sector of the ASX was up, except industrial stocks which were down 0.05 per cent, dragged down by Cleanaway Waste Management, which fell 13.2 per cent to $1.85 after warning shareholders not to expect a rise in first-half earnings.

All the big banks were higher, with CommonwealthWestpac and ANZ all rising half a percentage point, to $80.70, $29.05 and $28.03, respectively.

NAB gained 0.6 per cent, to $29.18, and Macquarie Group was up 0.8 per cent to $134.98.

In the heavyweight mining sector, BHP added two cents to $35.77, Rio Tinto gained 0.5 per cent to $90.81 and Fortescue Metals added 0.8 per cent to $8.82.

Gold stocks rose as the price of the precious metal climbed above $1,500 an ounce for the first time in two weeks, with Newcrest up 1.3 per cent, Northern Star up 1.4 per cent and Resolute up 9.6 per cent to $1.31 after announcing it had a plan to repair a key processing component at its goldmine in Mali.

Property shares added 0.9 per cent with Mirvac gaining 2.6 per cent and Goodman Group adding 1.3 per cent.

Qantas was down 0.5 per cent as chief executive Alan Joyce told shareholders the airline was well placed to withstand falling business and consumer confidence.

Outdoor advertising company QMS Media surged 11.1 per cent to $1 before being placed in a trading halt so it could make an announcement on a possible sale of the company or parts of it.

The Aussie dollar is buying 68.21 US cents, from 68.45 US cents on Thursday.

Share Watch

THE RECESSION WE DON’T NEED TO HAVE

Some of us older folk will recall former Prime Minister – Paul Keating’s call in the 1990’s when he said in response to the recession at that time that this is:

THE RECESSION AUSTRALIA NEEDED TO HAVE

Immortal words just like the RECALCITRANT BEHAVIOUR (won’t go there) are etched in his list of significant oratories.

At a time where the press gives out the usual Doom and Gloom about the economy then I dare say despite any hint of a recession we won’t hear those words.

In this Global World then predicting what might or might not happen is always difficult but to pre-empt any politician’s statements the current environment might best be said:  

THE RECESSION WE DON’T NEED TO HAVE
And
WON’T HAVE

Perhaps ScoMo should make that statement!!!!

Why Is It the Recession We Don’t Need to Have and Won’t Have?

Well let’s look at some of the key indicators:

  • Unemployment stuck on around 5.20%.  Ideally low 4’s would be great but you would then be talking real boom time.
  • The main US share market has done well over the past few years although not absolutely spectacular so as to indicate a BUBBLE waiting to burst.
  • Interest rates are at historical lows, so most debt is cheap even if home ownership in the capital cities is extremely difficult for a lot of new entrances.
  • Australia’s share market has done well over the last few years but is still in need of some stellar years going forward to return to pre GFC long term average return. No BUBBLE HERE.
  • The projected annual Federal Budget is now just in the black or close to neutral.
  • Inflation (CPI) is at least low helping the impact from low wages growth
  • Significant Infrastructure on the go supporting the economy (maybe more needed).
  • Australia has a great and envied superannuation system so savings are happening in some even if legislated formats.
  • If needed, governments can borrow at very low long-term rates to fund projects.   

Any negative economic figures or happenings on the ground is always over accentuated by the media.
Of course, BIG PICTURE issues hang over all this including the big World stuff:

  • US/China Trade/Tariffs War
  • Chinese continued good growth (and use of our resources)
  • All significant Geopolitical Tensions
  • Brexit outcomes (although not good globally this would settle reasonably quickly after initial shock – realistically Britannia no longer rules the waves)

These GLOBAL BIG PICTURE issues are more concerning as to possibly effect our investments and livelihood. Unfortunately, we cannot influence these issues and we have to put faith in the World leaders to get this right.

At Plus 1 we are happy to talk to persons contemplating financial advice, investment and looking at strategies and alternatives

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

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Are You Shutting Down Over Christmas/ New Year?

Are You Shutting Down Over Christmas/ New Year?

Are You Shutting Down Over Christmas/ New Year?

An employee can be directed to take annual leave during a shut down if their award or registered agreement allows it.

What is a shut down?

A shut down is when a business temporarily closes during slow periods of the year, such as Christmas and New Year. It is also called a ‘close down’.

Depending on your award or registered agreement there may be a period of notice required to be given to the employee in the case of a business shut down.

For example, in the Transport, Retail, Clerical awards a minimum of 4 weeks’ notice is required to be given. In the Building & Construction Award the notice period is 2 months.

It is important that the check the requirements that apply for your business.

During this shut down period Employees can be directed to take annual leave.

If they don’t have sufficient leave to cover the shut down period, they will have to take all their accrued annual leave and then unpaid leave to make up the balance.

Public Holidays are still required to be paid for on the days that occur during this shut down period.

Staff continue to accrue leave entitlements as they normally would on any paid leave during this time.

But what if my award or agreement doesn’t allow this or even mention it?

If your award or agreement doesn’t have rules about annual leave during shut downs, an employer can’t direct an employee to take leave.

However, an employer and employee can agree that the employee takes annual leave (including in advance of accrual) or unpaid leave for the shut down time.

The employee can’t be forced to take unpaid leave, so if an agreement can’t be reached with their employer, they need to be paid their ordinary pay for the time.

What are the Public Holidays?

Public Holidays are still required to be paid for on the days that occur during this shut down period.

Make sure you know what public holidays are coming up. https://www.fairwork.gov.au/leave/public-holidays

Can Employees continue to work during a shut down?

If employees continue to work when a business shuts down they should be paid as normal.

If any of the days are public holidays, these days are treated as public holidays.

This means the employee should be given the day off without loss of pay or they should be paid public holiday rates as per their award or agreement.

Need more help or information?

Click the link below to contact us at Plus 1.

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Monday to Friday
8:00am to 5:00pm

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If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

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T: (03) 5833 3000
F: (03) 5831 2988
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Available Grants

Available Grants

Available Grants

On-Farm Emergency Water Infrastructure Rebate Scheme

A rebate is available to drought affected farmers who invest, or have invested since 1st July 2018, in urgently-needed on-farm water infrastructure that addresses animal welfare needs and improves resilience to drought. The scheme provides a one off 25 per cent rebate up to $25,000 to eligible primary producers.

Eligible water infrastructure includes:

  • Pipes
  • Water storage devices such as tanks and troughs associated with stock watering
  • Water pumps
  • Permanent repairs to fixed infrastructure (e.g. repair piping)
  • Drilling of new stock water bores and associated power supply such as generators, desalination plants
  • Desilting works of existing stock and domestic dams, where you can demonstrate that area of the property does not have access to suitable groundwater
  • Other materials or equipment necessary to install the above excluding purchase of machinery
  • Any freight component to purchase and install the equipment
  • The professional installation costs to install the water infrastructure.

The Scheme is available for the purchase and installation of emergency water infrastructure for livestock located in the following local Government Areas:

Alpine, Benalla, Buloke, Campaspe, East Gippsland, Gannawarra, Greater Bendigo, Greater Shepparton, Hindmarsh, Horsham, Indigo, Loddon, Mildura, Moira, Northern Grampians, Strathbogie, Swan Hill, Towong, Wangaratta, Wellington, Wodonga, Yarriambiack.

Export Market Development Grants (EMDG)

The EMDG scheme is a key Australian Government financial assistance program for aspiring and current exporters. The Scheme encourages small- and medium-sized Australian businesses to develop export markets and reimburses up to 50 per cent of eligible export promotion expenses above $5,000 provided that the total expenses are at least $15,000.

Need more help or information?

Click the link below to contact us at Plus 1.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

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Platinum Xero Partner
MYOB logo
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Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide

Are you paying too much for your Mortgage?

Are you paying too much for your Mortgage?

Are You Paying Too Much For Your Mortgage?

On the first Tuesday of October, the Reserve Bank of Australia officially announced another rate cut, taking the official cash rate to a record low 0.75%.

Great news for those who have borrowed money, not so good for savers.

Let’s take a look at two different mortgages and the impact of a slight change in interest rates.

Luke has a mortgage of $400,000 with a 25-year term. He has negotiated an interest rate of 4.00% with his bank that he has banked with for his entire life as he is a loyal customer.

Luke’s mortgage looks like the following:

If Luke does nothing and just continues to make the minimum repayments, he will pay over $230,000 in interest over the life of the loan.

Luke sees on the news that interest rates have been going lower, but his mortgage rate has stayed the same. He calls his lender to ask for a reduction in his rate. Luke’s lender grants him his wish and cuts his rate to a much more competitive 3.50%.

Luke’s new mortgage now looks like this:

Luke’s ten-minute phone call has saved him more than $30,000 over the life of the loan.

Luke decides to go one step further. Before his interest rate was reduced, Luke was accustomed to paying $2,111 every month, so he decides that he will keep his repayments at the higher rate even though the minimum amount is less. Luke’s mortgage now looks like the following:

Therefore, by calling his bank and lowering his rate, and keeping his repayments the same, Luke now saves $50,000 over the life of the loan and the loan is repaid nearly two years faster.

For those who still have an outstanding mortgage, it is worth taking the time to take a look at the rate you are paying and see if you can do better. If your rate is above 4.00%, you are probably paying too much. A quick phone call to your lender may make a massive difference as you can see from Luke’s example above.

You may ask yourself “Why would the bank lower my rate when they can keep it higher and earn more money?”

The answer to this is that it is much easier to keep an existing customer than to get a new one.

Your bank will not want to lose you as a customer as they will lose all those interest payments you will pay over the next 20 or more years. They would much rather lower your rate and sacrifice a little to gain a lot.

Further, with more and more lenders coming into the market, competition for home loans has never been more competitive. This works in the borrowers’ favour.

So, what if your bank doesn’t lower your rate?

If you bank refuses to reduce your rate and you think it is too high, it may pay to move lenders.

Sometimes the threat of moving to another lender forces your bank to lower your rate. Remember, they don’t want to see you go, you have the power.

Finally, remember, it doesn’t pay to be loyal to your bank.

If you would like to discuss your interest rates and see if you are paying too much, please contact our Financial Planning team.

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If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

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T: (03) 5833 3000
F: (03) 5831 2988
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Hot Weather Policy

Hot Weather Policy

Hot Weather Policy – Do You Have One? 

Daytime temperatures are set to soar this summer, according to the Rural Fire Service, creating potential WHS risks and obligations for employers. At the plus 1 group we want your business to be prepared for what’s coming so make sure you have a hot weather policy in place.
It’s vitally important to have a policy for managing work during hot weather.

Your policy should provide general guidelines to help employees combat heat-stress. It should also provide information about identifying and preventing heat-related stress, for example through drinking and eating regularly and self-monitoring for signs of stress. Importantly, your policy should enable you to direct employees to carry out alternative duties or to send them home in extreme or unsafe hot weather conditions.

Need help? Contact our HR team at Plus 1 on 03 5833 3000 or hr@plus1group.com.au

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us