Market Insights – 21/09/2020

Market Insights – 21/09/2020

Market Insights

21st September 2020

Top ASX Stocks

CODE

PRICE

CHANGE

 

CODE

PRICE

CHANGE

CSL

$282.62

-0.92%

 

ANZ

$17.07

-3.49%

CBA

$64.37

-2.75%

 

WES

$44.08

-2.89%

BHP

$37.80

1.37%

 

WOW

$36.05

-2.49%

WBC

$16.64

-2.12%

 

MQG

$122.56

2.13%

NAB

$17.29

-0.35%

 

FMG

$16.39

-6.88%

Market and Exchange Rates

MAJOR FOREIGN MARKETS

 

AUS DOLLAR IS BUYING

All Ords

6,057.60

-0.19%

 

US Dollar

0.7293

Dow Jones

27,657.42

-0.88%

 

Euro

0.6155

FTSE-100

6,007.05

-0.71%

 

GB

0.5636

Nikkei 

23,360.30

0.18%

 

Yen

76.2410

Hang Seng 

24,455.41

0.47%

 

NZD

1.0781

Commodities

Oil (WTI)

40.800

0.02%

Gold

1,890.000

0.74%

Iron Ore

126.590

0.39%

Major Market Announcements

– From today workers in NSW will be able to access the same $1500 Pandemic Leave Disaster Payment if they need to self-isolate for 14 days. NSW Premier Gladys Berejiklian confirmed Prime Minister Scott Morrison had given the lump sum payment the green light, telling reporters she wanted people to feel supported if they have to stop working and isolate because they have come into contact with a Covid-19 case.

– U.S. stocks fell on Friday as technology shares sold off for a third day in a row, while all three major U.S. indexes posted a third straight week of declines.

– Air New Zealand chief executive Greg Foran says quarantine-free travel between Australia and New Zealand is unlikely to resume for at least another six months, bursting hopes of a proposed “trans-Tasman bubble” opening before March next year.

– Billionaire Andrew “Twiggy” Forrest’s Fortescue Metals Group needs to be “very careful” says Federal MP Warren Entsch, after the company used a technicality to reject a call to halt the destruction of Aboriginal heritage sites.

Market Update

Australian shares have lost all their opening gains, as the initial recovery from Thursday’s heavy losses ran out of steam.

By the close the benchmark ASX 200 was down 0.3 per cent to 5,865 points.

The Australian dollar had risen (+0.1pc) to 73.2 US cents.

Resources was the best performing sector on optimism about Chinese demand for commodities, while most others, such as utilities and healthcare, drifted into the red.

Some of the best-performing stocks were CSR (+4.8pc), Saracen Mineral (+4.2pc), South32 (+3.7pc) and Orocobre (+3.7pc).

On the flip side, Virgin Money (-4.1pc), Abacus Property (-4.3pc) and Unibail Rodamco Westfield (-7.3pc) were among the worst performers.

Mining giants BHP (+1.3pc) and Rio Tinto (+1.3pc) were keeping the market from steeper losses overall.

However, the big banks all dragged, with Westpac (-1pc), ANZ (-1.4pc) and Commonwealth Bank (-1pc) among the biggest drags on the ASX 200 index because of their size. NAB was down just 0.1 per cent.

Shares in Apple (-1.6pc), Amazon (-2.3pc) and Facebook (-3.3pc) were among the biggest drags on Wall Street.

The tech-heavy Nasdaq was hit hardest, losing 1.3 per cent to 10,910 points.
It was followed by the S&P 500, down 0.8 per cent to 3,357, and the Dow Jones, which dropped 0.5 per cent to 27,902.

From the March market lows, “this has been an amazing recovery represented by a few good tech names,” said Jake Dollarhide, chief executive officer of Longbow Asset Management.

“They had an incredible last week of August, and I think this is a rational profit-taking scenario at the moment.”

Share Watch

BetaShares NASDAQ 100 (ASX: NDQ)

NDQ is an Exchange Traded Fund (ETF) that aims to track the performance of the NASDAQ-100 Index, which comprises 100 of the largest, non-financial companies listed on the NASDAQ market, and includes many companies that are at the forefront of the new economy.

We originally recommended NDQ as a buy in May 2020 when NDQ was trading at $24.07, now trading at $25.22, given the recent weakness on the NASDAQ index, NDQ is down 10.8% from its September all-time highs of $28.11

Benefits to NDQ

Invest in the way you live: In one trade on the ASX get access to companies like Apple, Amazon and Google, that have changed the way we live.

Exposure to the ‘new economy’: With its strong focus on technology, NDQ provides diversified exposure to a high-growth potential sector that is under-represented in the Australian sharemarket.

Simple access and cost-effective: Management fees of only 0.48% p.a

NDQ remains to be a fantastic investment option. It gives exposure to a group of the highest quality growth shares the world has to offer in a single investment. This includes the likes of Amazon, Apple, Facebook, Microsoft, Netflix, Nvidia, Tesla, and Google parent, Alphabet. Given the exceptionally positive long term growth prospects of the majority of companies in the fund, we believe it has the potential to continue to strongly perform.

Always proceed with caution and with a plan in place, we are free to discuss your portfolio, your options with beginning to invest, or any other aspects to your financial planning needs.

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.

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

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

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

Market Insights – 21/09/2020

Market Insights – 14/09/2020

Market Insights

14th September 2020

Top ASX Stocks

CODE

PRICE

CHANGE

 

CODE

PRICE

CHANGE

CSL

$283.50

-0.53%

 

ANZ

$17.53

-1.52%

CBA

$65.80

-0.86%

 

WES

$45.00

-2.49%

BHP

$36.55

0.25%

 

WOW

$36.71

-2.13%

WBC

$16.81

-1.58%

 

MQG

$126.10

0.48%

NAB

$17.15

-1.15%

 

FMG

$17.34

-1.03%

Market and Exchange Rates

MAJOR FOREIGN MARKETS AUS DOLLAR IS BUYING
All Ords6,038.90-0.84% US Dollar0.7283
Dow Jones27,665.640.48% Euro0.6150
FTSE-1006,032.090.48% GB0.5691
Nikkei23,406.490.74% Yen77.2900
Hang Seng24,503.310.78% NZD1.0921

Commodities

Oil (WTI)

37.250

1.05%

Gold

1,8900.000

-0.38%

Iron Ore

126.770

0.52%

Major Market Announcements

– The Nasdaq slid and the S&P 500 closed little changed on Friday as early gains in technology and growth names faded, with each of the three major Wall Street averages posting their second straight weekly decline.

– The Victorian Government has announced a coronavirus business support package worth about $3 billion, which Premier Daniel Andrews calls the “biggest package of business support” the state has ever seen.

– New figures show Chinese investment in Australia is continuing to plummet as distrust between the two countries grows and companies from the mainland turn towards emerging markets. The Australian National University’s Chinese Investment in Australia (CHIIA) database shows investors laid out just $2.5 billion in 2019, roughly half of the $4.8 billion they spent in 2018.

– Optus has not formally expressed interest in Rugby Australia’s revised broadcast rights package, leaving News Corp-controlled Foxtel in a strong position in negotiations with the under pressure code. The Singtel-owned telco provider was on the brink of securing a deal with Rugby Australia earlier this year before the coronavirus pandemic hit, but formal talks fell apart during the crisis and only restarted last month.

Market Update

Australian shares have closed in the red, after Wall Street’s technology stocks were heavily sold off again.

The ASX 200 index lost 0.8 per cent, or 49 points, to 5,859 points, its lowest level in nearly two-and-a-half months.

Most sectors fell, with energy (-1.7pc) and technology (-1.4pc) the weakest performers.

Only 36 stocks rose on the benchmark index including Whitehaven Coal (+5.9pc), Cromwell Property (+2.3pc) and IPH (+2.2pc).

Nearmap (-14.9pc), Star Entertainment (-4.2pc), Sandfire Resources (-4pc) and Iluka Resources (-3.9pc) were among the stocks that suffered heavy falls.

Banks and miners such as Westpac (-1.1pc), Commonwealth Bank (-1.4pc), BHP (-1.2pc) and Fortescue Metals (-3.1pc) were among the biggest drags on the market.

Rio Tinto’s share price, meanwhile, fell by a modest 0.6 per cent to $99.86.

This was after the company bowed to pressure to dump its CEO and two senior executives, for destroying ancient rock shelters in Western Australia, earlier this year.

Its chief executive, Jean-Sebastian Jacques, will leave the role by “mutual agreement” by March 31, or earlier if his replacement is found before then. 

The company’s heads of iron ore and corporate affairs, Chris Salisbury and Simone Niven, have also resigned with immediate effect, but will remain with the company until December 31.

Rio Tinto has been under fire since May for destroying the Juukan Gorge to expand its iron ore mining in the Pilbara.

An internal review found that Mr Jacques, Mr Salisbury and Ms Niven were partially responsible.

The mining giant cut their bonuses, worth millions of dollars. But outside the company that was seen as an inadequate response to the loss of priceless Aboriginal heritage.

Overnight, the company convened a crisis meeting, where it was decided the three executives would leave their roles.

Webinar- Preparing For Your Retirement in a Post COVID World 

COVID19 has undeniably changed the way we live – maybe forever.

For those who were planning on retiring now or in the near future, these plans have likely been significantly altered or have been thrown out completely.

With so much uncertainty in the world right now, now more than ever, it is crucial to have a plan for your retirement.

Some key questions we will answer in this webinar are:

  • How much money do you need in retirement?
  • How much income do you need to fund your ideal lifestyle in retirement?
  • How do you draw an income to live off in retirement?
  • With interest rates so low, where should you invest your retirement funds?
  • How much risk is too much risk leading up to retirement?
  • What entitlements and benefits are you eligible for?
  • How can you transfer your wealth to your children?
  • How do I maintain my quality of life once I have retired?
  • What investment returns can I expect in the next few years?

We will endeavour to answer these questions and more in this interactive webinar.

We also encourage you to ask any questions you have throughout.

Event Details

When: We are offering two sessions on the 16th September 2020, 12:00pm – 1:00pm and 5.30pm – 6.30pm. Please select your preferred time.

Cost: Just your time

Registrations are a must to ensure you are provided the link to log into the presentation!

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.

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

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

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

Market Insights – 21/09/2020

Market Insights – 07/09/2020

Market Insights

7th September 2020

Top ASX Stocks

CODE

PRICE

CHANGE

 

CODE

PRICE

CHANGE

CSL

$279.05

-3.51%

 

ANZ

$17.81

-2.94%

CBA

$66.73

-3.08%

 

WES

$46.74

-2.67%

BHP

$36.19

-4.64%

 

WOW

$38.01

-3.77%

WBC

$17.06

-2.63%

 

MQG

$126.20

-1.41%

NAB

$17.35

-3.45%

 

FMG

$17.52

-1.30%

Market and Exchange Rates

MAJOR FOREIGN MARKETS

 

AUS DOLLAR IS BUYING

All Ords

6,108.80

-3.05%

 

US Dollar

0.7280

Dow Jones

28,133.31

-0.56%

 

Euro

0.6146

FTSE-100

5,799.08

-0.88%

 

GB

0.5488

Nikkei 

23,205.43

-1.11%

 

Yen

77.3540

Commodities

Oil (WTI)

39.400

-4.29%

Gold

1,890.000

-0.57%

Iron Ore

128.380

-0.66%

Major Market Announcements

– Australian retailers enjoyed another month of solid sales in July with gains seen in all states and territories except virus-stricken Victoria. Retail sales jumped 3.2 per cent to $30.7 billion in July from a month ago, the Bureau of Statistics revealed in its latest figures. This was a 12 per cent jump, compared with July 2019.

– The Nasdaq closed lower on Friday though well above its session low as selling eased late in the day after investors dumped heavyweight technology stocks due to concerns about high valuations and a patchy economic recovery.

– A relatively small but growing number of struggling borrowers who put their mortgages or business loans on hold in response the coronavirus crisis are resuming repayments, new industry figures show. As part of the banking industry’s response to the crisis, Australian lenders since March have allowed $274 billion in home loans and small business loans to be deferred for up to six months, with the possibility of further loan extensions.

– Australian iron ore stocks are riding high as the price of the steelmaking commodity remains strong. Analysts expect it to stay elevated for the foreseeable future as COVID-19 curtails supply from Brazil. Prices were below $US80 per tonne in November but have soared over the past five months, reaching $US125/t in August – the first time since February 2014.

– Wesfarmers boss Rob Scott has warned the extended lockdown in Victoria will extract a terrible toll on the state’s economy, adding that the state’s recovery road map creates more confusion for the public and businesses.

Market Update

Australian shares have experienced their biggest one-day fall in three months as investors dumped high-flying technology stocks.

At the close, the benchmark ASX 200 index had dropped 187 points (or 3.1 per cent) to 5,926, effectively wiping out all its gains from the past month.

The broader All Ordinaries index was also down more than 3 per cent to 6,109 points.

Tech stocks were the worst-performers, including WiseTech Global (-7.3pc), Appen (-7.1pc), NEXTDC (-6.8pc) and Afterpay (-6.7pc).

Afterpay has fallen from highs above $92 a share earlier this week to $78.20 after news that online payments giant PayPal is moving into the buy now, pay later space in the US, a market where Afterpay is hoping to continue growing strongly.

Outside the tech sector, Kogan.com (-10.8pc), Temple and Webster (-7.8pc), Platinum Asset Management (-6.6pc) and Magellan (-6.4pc) also saw sizeable selldowns.

Due to their size, the big banks and miners, along with CSL, were major drags on the benchmark ASX 200 index.

Westpac, ANZ and NAB fell more than 3 per cent each, while the Commonwealth Bank was down 2.1 per cent.

BHP (-3.8pc), Rio Tinto (-2.8pc) and Fortescue Metals (-3.4pc), as well as vaccine maker CSL (-4.1pc) also dropped sharply.

The Australian dollar fell around 1 per cent to 72.65 US cents and was much weaker against other currencies.

It also dropped sharply (-0.9pc) to 61.34 euro cents and 77.14 Japanese yen, and had slipped (-0.3pc) to 54.75 British pence.

Spot gold retreated (-0.6pc) to $US1,931.20 an ounce, while iron ore lifted above $US130 per tonne on strong demand from China’s steel mills.

Aside from a brief spike last year, in Australian dollar terms, iron ore is near prices last seen in 2011 of $180 a tonne.

Brent crude oil weakened (-1pc) to $US43.74 a barrel, on worries about weaker US petrol demand and a slowdown in the economic recovery.

Share Watch

China is one of the fastest growing emerging markets in the world.  After posting high single-digit growth over the past two decades, the country is expected to surpass the United States and become the world’s largest economy over the next few years. And with its enormous population, the country’s economic growth isn’t expected to slow down anytime soon.

But is this a certainty? No, nothing is, and this is why it is important to firstly develop a strong core portfolio of diversified stocks, this helps to keep your portfolio, somewhat more defensive, by not having all your eggs in the one basket, or market!

One investment we see that could compliment your existing portfolio is the VanEck Vectors China New Economy Exchange Traded Fund (ETF) (ASX: CNEW)

CNEW Provides investors with a portfolio of the most fundamentally sound companies in China having the best growth prospects in sectors making up “The New Economy” namely technology, health care, consumer staples and consumer discretionary.

What we like . .
This ETF aims to provide exposure to 120 companies in China with the best growth, at a reasonable price attributes, which are considered the best drivers for long-term capital appreciation.

Feel free to call us at the office for further information, or to discuss your investment options.

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.

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

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

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

Market Insights – 21/09/2020

Market Insights – 31/08/2020

Market Insights

31 August 2020

Top ASX Stocks

CODEPRICECHANGE CODEPRICECHANGE
CSL$289.890.13% ANZ$18.400.82%
CBA$69.09-0.70% WES$48.26-1.49%
BHP$37.73-1.23% WOW$39.771.02%
WBC$17.562.33% MQG$128.240.68%
NAB$17.931.87% FMG$18.872.95%

Market and Exchange Rates

MAJOR FOREIGN MARKETS

 

AUS DOLLAR IS BUYING

All Ords

6,260.80

-0.79%

 

US Dollar

0.7363

Dow Jones

28,653.87

0.57%

 

Euro

0.6183

FTSE-100

5,963.57

-0.61%

 

GB

0.5515

Nikkei 

22,882.65

-1.41%

 

Yen

77.5660

Commodities

Oil (WTI)

42.900

-0.21%

Gold

1,942.000

-0.55%

Iron Ore

122.390

0.05%

Major Market Announcements

– Wall Street advanced on Friday, with technology stocks driving the S&P 500 to its sixth record closing high since confirming a bull market on Aug. 18.

– More than 400,000 unemployed Victorians are set to have their dole payments slashed by $300 a fortnight in the Senate this week as they remain confined to their homes to protect fellow citizens’ lives. An estimated one in ten Victorians is now unemployed according to a new Treasury analysis of the ‘real’ jobless rate in the state battered by COVID-19 shutdowns.

– Macquarie Group executive Greg Ward says front-line bank staff face the toughest period in decades, as they prepare to deal with struggling customers who cannot resume their mortgage repayments after an emergency pause.

– Australia’s four remaining oil refineries are being pushed to breaking point by a sharp slump in fuel use with operators fearing demand will stay below pre-pandemic levels for the foreseeable future and less air travel is here to stay.

– The head of Australian mining giant BHP says new plans to boost exposure to the “future-facing” commodities nickel and copper will focus first on exploring for new deposits and finding ways to extract more from existing assets, rather than looking for acquisitions.

– Harvey Norman has posted a profit increase of nearly 20 per cent as lockdown measures sparked by COVID-19 fuelled a sales rush for furniture and home goods. For the 12 months ending June 30, the retailer booked a full-year net profit of $480.5 million, a rise of 19.4 per cent on the previous corresponding period.

Market Update

The Australian share market remains in the red after a mixed finish on Wall Street following a shift in the US central bank’s approach to inflation, which means lower interest rates for longer.

By the close, the ASX 200 index had lost 0.9 per cent to 6,074 points.

Tech, telco and mining stocks continued to lead the falls.

The Australian dollar had risen by about 0.5 per cent against the US dollar, to 72.96 US cents around 4:30pm (AEST).

Worry, Worry, Worry..

PANDEMIC and INVESTMENT MARKETS  

Some of us are born worriers and there are many media statements (can be totally unnecessary when it comes to investments) that accentuate this.

Statements such as:

THIS IS CATASTROPHIC
or
WE HAVE NOT HAD ANYTHING LIKE THIS BEFORE 

do not help the containment of worry.

Both statements are of course true as:

Any loss of life is TRAGIC and even if we are not well and just in bed (for any health reason) this time, helps to put some things into perspective – as they say good health is everything.  And LOCKDOWNS ETC – yes we have never had anything like this before – post 1950’s anyway.

But when it comes to INVESTMENTS then EVENTS effecting investments have occurred before. Let’s look at the last 30 years (1990 to 2020) and EVENTS that clearly disrupted investment markets in some way.

– Asian Currency Crisis
– Early 90’s Recession
– Dot Com Bubble Burst
– US Terrorist Attack
– Iraq War
– Tsunami
– Global Financial Crisis (GFC)
– Brexit
– Covid-19

So, this time it is different. Well YES and NO.

YES – it is different – a Pandemic (certainly COVID-19 is different) and the flow on causing investment market disruption.

 NO – it is not different (in a sense) as EVENTS occur that disrupt. There will always be something unexpected around the corner. Life is certainly like that and so is investment market behaviour.

Markets go up and they go down but they always recover – sometimes it takes longer than others.

The following illustrates the frequency and percentage number of positive and negative periods, ending 30 June, over the last 30 years (1990 to 2020) with the main driver of share markets around the world being Wall Street by way of US Shares, S&P 500 Index.

– If you invested for only a day then 54% of the time you would have a positive return and 46% of the time a negative return.

– If you invested for only a month then 36% of the time you would have a positive return and 64% of the time a negative return.

– If you invested for 1 year then 80% of the time you would have a positive return and 20% of the time a negative return.

– If you invested for 3 years then 75% of the time you would have a positive return and 25% of the time a negative return.

– If you invested for 5 years then 70% of the time you would have a positive return and 30% of the time a negative return.

If you invested for 10 years then 81% of the time you would have a positive return and 19% of the time a negative return.

– If you invested for 20 years then 100% of the time you would have a positive return and NIL% of the time a negative return.

– If you invested for 30 years then 100% of the time you would have a positive return and NIL% of the time a negative return.

Looking at just probabilities of a negative capital loss, as can be seen, generally the longer the time period that you are in the market, the less frequency of a likely overall negative return.

Moreover, if you have investments spread across various asset classes by way of diversification, it even further reduces your chances of a negative return over various periods.

It is a pretty safe investment strategy that as history shows (see below) that markets will return to long term averages to reward patient investors.

As always, we are not great believers in dumping large amounts of capital into markets at any one time rather than take a “drip feed” approach which also lessens the prospect of negative returns over various periods.

For a lot of people their exposure to investment markets will be by way of investments in individual’s own name/s, superannuation, pensions or other means such as trusts.

BOTTOM LINE

We will get over this Pandemic and ups and downs in markets will be reflected in good average medium and long term returns above inflation (so your purchasing power remains intact) for the Growth Assets in your investment portfolio.

At Plus 1 Group, we are available at any time to discuss issues of this nature with due regard to your investments or financial planning generally.

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.

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

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

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

Market Insights – 21/09/2020

Market Insights – 24/08/2020

Market Insights

24 August 2020

Top ASX Stocks

CODE

PRICE

CHANGE

 

CODE

PRICE

CHANGE

CSL

$295.52

5.54%

 

ANZ

$18.38

-0.33%

CBA

$69.63

-2.07%

 

WES

$48.73

3.00%

BHP

$38.36

-3.40%

 

WOW

$39.58

-1.10%

WBC

$17.23

-3.42%

 

MQG

$127.43

1.64%

NAB

$17.65

-1.78%

 

FMG

$17.99

0.62%

Market and Exchange Rates

MAJOR FOREIGN MARKETS

 

AUS DOLLAR IS BUYING

All Ords

6,270.70

-0.02%

 

US Dollar

0.7161

Dow Jones

27,930.33

0.69%

 

Euro

0.6068

FTSE-100

6,001.89

-0.19%

 

GB

0.5470

Nikkei 

22,920.30

0.17%

 

Yen

75.7656

Commodities

Oil (WTI)42.220-0.87%
Gold1,915.000-0.72%
Iron Ore123.740-0.77%

Major Market Announcements

– The S&P 500 and Nasdaq closed at record highs on Friday, with both lifted by Apple after data pointed to some pockets of strength in the U.S. economy.

– Australia’s ‘real’ unemployment rate is set to soar back to 13 per cent as state borders remain closed and Victoria emerges from a second lockdown. Treasurer Josh Frydenberg has confirmed the grim news that he expects an increase of around 450,000 people out of work in coming months and the majority of jobs lost will be in Victoria. The prediction is likely to increase the pressure on the Morrison Government to reconsider plans to slash the value of the $1,500 JobKeeper subsidy and the COVID-19 changes to double the dole.

– Industry super funds have called on the federal government to pay one-off contributions of up to $5000 into the accounts of low-income earners who have withdrawn retirement savings early. The Australian Institute of Superannuation Trustees, which represents industry funds, is behind the proposal. It recommends increasing the concession tax rate of super earnings for accounts with balances of more than $10 million to 30 per cent, rather than 15 per cent.

– Banking and insurance group Suncorp says governments can no longer leave climate change in the “too-hard basket”, warning extreme natural disasters will hurt businesses already grappling with the effects of COVID-19.

– Shell’s massive floating LNG factory off the Kimberley coast has been in shutdown since February and industry analysts are divided on whether the $12-17 billion facility has a future.

Market Update

Despite a strong start, the Australian share market lost all its momentum throughout the day as investors traded cautiously.

The ASX 200 slipped by 0.1 per cent to close at 6,111, while the broader All Ordinaries index was flat at 6,271 points.

Since the week began, the Australian market dipped slightly, by 0.2 per cent.

Reporting season continues, with Suncorp reporting an increase in full-year net profit to $913 million, including profits from the sale of some businesses.

Suncorp shares jumped 11 per cent to $9.65, making it one of the best performers on the benchmark index.

However, cash earnings were down by about a third at $749 million, due to reduced profits from its insurance and banking and wealth divisions.

“It has been a challenging 12 months for Suncorp and for the customers and communities we support,” chief executive Steve Johnston said, highlighting the extreme weather conditions over the summer, followed by the pandemic.

Shareholders will receive a final dividend of 10 cents per share.

Webjet, Suncorp and Nearmap were also among the top performers, rising by 11.8, 11 and 10.3 per cent respectively.

Shares in Mosaic Brands dropped 7.6 per cent after the clothing retail group said 129 of its stores in Westfield centres nationally had been closed by landlord Scentre Group.

Australia’s largest companies — the banks, miners, utilities and healthcare companies — were the biggest drag on the market.

Westpac, ANZ and NAB slipped between 0.2 and 0.4 per cent, while Commonwealth Bank shed 0.9 per cent. BHP and Origin Energy lost 0.9 and 1.3 per cent respectively, while CSL shed 1.5 per cent.

The Australian dollar was steady at 71.9 US cents.

Westpac has lifted its forecast for the currency, now expecting it to rise to 75 US cents by year-end, and 80 US cents by the end of 2021.

The Simple Math’s of Investing

During these volatile times, it is easy to go off track from your investment goals.

The below Index Chart powerfully illustrates how sticking to a disciplined investment plan, with diversification across a range of asset classes, will invariably override short-term market volatility and deliver long-term returns.

Click here to download Vangaurd Index Chart

What if you put $10,000 into Australian Shares in 1990, how much would it be worth today? Watch the below video to find the answer.

https://www.youtube.com/watch?v=5Gx62yQtxjA&feature=youtu.be

As always, we are free to discuss your portfolio, your options with beginning to invest, or any other aspects to your financial planning needs.

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.

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

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

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

Market Insights – 21/09/2020

Market Insights – 17/08/2020

Market Insights

17 August 2020

Top ASX Stocks

CODE

PRICE

CHANGE

 

CODE

PRICE

CHANGE

CSL

$279.34

0.93%

 

ANZ

$18.68

4.94%

CBA

$71.76

-0.47%

 

WES

$47.61

2.39%

BHP

$40.01

2.25%

 

WOW

$40.27

2.52%

WBC

$18.04

6.68%

 

MQG

$126.18

0.44%

NAB

$18.22

6.05%

 

FMG

$17.98

-0.39%

Market and Exchange Rates

MAJOR FOREIGN MARKETS

 

AUS DOLLAR IS BUYING

All Ords

6,261.70

0.61%

 

US Dollar

0.7170

Dow Jones

27,931.02

0.12%

 

Euro

0.6054

FTSE-100

6,090.04

-1.55%

 

GB

0.5471

Nikkei 

23,289.36

0.17%

 

Yen

76.4100

Commodities

Oil (WTI)

42.000

-0.26%

Gold

1,835.400

-0.31%

Iron Ore

119.860

0.23%

Major Market Announcements

– The S&P 500 ended nearly flat on Friday despite coming close again to its record closing high, as data on the U.S. economy added to uncertainty over the recovery.

– The Reserve Bank of Australia has flagged keeping the official interest rate at a historical low for the next three years, expecting it will take at least that long for the jobs market to recover from the coronavirus pandemic.

– oOh! Media has asked staff to take a smaller pay cheque until the end of the year as the billboard company tries to cope with low demand from advertisers. Employees at oOh! Media have been working reduced hours with lower salaries since April and were expected to return to full time work in the next few weeks. However, continued weakness in advertising spending caused by economic factors related to the coronavirus pandemic is continuing to put financial pressure on the business.

– Widespread rains that fell across southern Western Australia this month have saved the state’s grain growers from potential disaster, with predictions there could even be a bumper harvest. In its latest outlook on the summer crop, the Grains Industry Association of WA (GIWA) said recent rains that drenched large parts of the state’s wheatbelt had fallen “just in the nick of time” and turned the season on its head.

– MGC Pharmaceuticals (ASX: MXC) has signed a distribution agreement with leading UK medical cannabis provider, LYPHE Group Limited, to distribute its EU GMP cannabinoid medicines into the growing UK market

Market Update

The Australian share market has closed higher, after technology and industrial stocks led the way, while NAB updates on its earnings and deferred loans.

Anti-inflammatory treatment developer Mesoblast was almost singlehandedly powering a big rise in the biotech sector, with its share price surging 39 per cent to $4.70 after clearing a major US regulatory hurdle for remestemcel-L to be approved for treating steroid-refractory acute graft versus host disease in children.

This is an auto-immune condition that can affect patients receiving bone marrow transplants to treat blood cancers and serious cases are often fatal.

The company had seen its share price fall significantly earlier in the week after preliminary reports from an FDA subcommittee cast doubt over the treatment’s effectiveness.

Gold miner Newcrest reported a statutory net profit of $647 million, up 15 per cent on the prior year and an underlying profit of $750 million, up 34 per cent.

However, investors appear to be disappointed it did not post stronger profit growth given a roughly 25 per cent increase in US dollar gold prices between the end of financial year 2019 and June 30 this year.

Newcrest’s share price ended down by 0.9 per cent to $34.16, despite an overnight rebound in the gold price and gains for many of its rivals.

The ASX 200 finished the session 0.6 per cent higher at 6,126 points, while the All Ordinaries index added 37 points to 6,261.

The Australian dollar was buying 71.55 US cents by 5:20pm AEST.

The Simple Math’s of Investing

One of the great sayings is:

YOU CANNOT GET BLOOD OUT of A STONE

And so, it is with investing

YOU CANNOT GET RETURNS THAT PUT YOU WELL IN FRONT OF ACHIEVING JUST INFLATION (CPI) WITHOUT SOME RISK TAKING

Ultimately what you are most likely going to earn on your savings/investments (excluding any taxes and fees for this article) is all about:  

  • Your Asset Allocation  
  • Your attitude to risk

Considering that the main areas we can invest in are essentially:  

  • Cash based investments (bank accounts – all types)
  • Fixed Interest investments (mainly term deposits and bonds)
  • Property investments (residential, commercial, retail and industrial)
  • Share Based investments – Australian and/or International share investments.

The majority can be accessed in many ways either directly or indirectly by way of the funds management industry. The tax structure of any investment could be just ordinary investments in individual’s own names, superannuation, pensions or a few other means.

All that being said history shows that with an average inflation rate of say 2% -3% per annum then over most 10-year periods the estimated returns on these Asset Classes would average:  

  • Cash and Fixed Interest – 3% to 5% per annum
  • Residential Property – Gross Rent 5% with Capital Growth 3% pa to 5% pa
  • Share Based – total Income and Growth an average of 10% per annum

Whilst these are a good guide to the averages you can expect, for shares and property in particular the range of annual returns may differ substantially from the averages over a 10 year period.

By way of illustration and supporting the above with some projections let us have a look at the impact of the differing returns on an investment of say $20,000 to start with and regular investments of $500 per month (and these regular payments  increased by 3% per annum in line with inflation) over a given 10 year period.

So as can be seen the differences in end results are significant for cash etc based investments versus higher returns in growth-based investments.

To further illustrate if we are prepared to have a DIVERSIFIED PORTFOLIO with approximately 70% in Growth Assets and 30 % in more Defensive Assets, then the average annual return over the 10 years to 30 June 2020 was 8.27%. Using this average return figure, the result is:

Of course, in reality the average 8.27% was not achieved without some ups and downs so the following table keys in the actual annual returns for a Diversified Portfolio so you can see the ups and downs versus just using the average of 8.27%

Good food for thought in deciding your Asset Allocation and hence risk appetite is clearly ONE OF THE MOST IMPORTANT ASPECTS OF ANY FINANCIAL PLANNING.

We clearly cannot get blood out of a stone, but you can achieve well above inflation investment returns over the long term with a well-diversified portfolio with a weighting to growth assets.

At Plus 1 Group we are available at any time to discuss issues of this nature with due regard to your investments or financial planning generally.

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.

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

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

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