29 NOV 21 – Monday Market Highlights – Transcript

Roland Houghton
Good morning. It’s Monday the 29th of November, and I’m Roland from Milford. The new COVID variant was the focus of last week, and will likely continue to be until we better understand it. What we know so far is that the strain Omicron has approximately 50 mutations relative to the Delta variant. Now it has 10 to 15 mutations as it relates to transmissibility, therefore, it is considered highly contagious. Now, there’s no evidence to suggest it’s any more dangerous than the Delta variant. However, we still don’t know at this stage how effective the vaccines are on this variant. As of now, we know it’s another five countries, however, this too was likely to increase. Governments globally have quickly responded. The UK, for example, has introduced new restrictions banning flights from a number of countries as has Israel and even Australia would expect most countries to ban flights from South Africa in the coming weeks and if it to stem the spread. Domestically, non Australian citizens who’ve been to nine countries including South Africa cannot enter Australia. If you ever traveled to one of these nine countries, you’ll have to isolate for 14 days or so flights to these countries have been suspended. Australian retail sales released on Friday and materially exceeded expectations. sales grew 4.9% month a month in October compared to expectations of 2.5%. clothing, footwear and personal accessories are up 28% month on month and department stores are up 22% New South Wales and AC T show the strongest month a month increase somewhat unsurprisingly, fact only grew 3% But it wasn’t open for much of october so you’d expect a strong November print. The minutes of the Fed’s early November policy meeting released which revealed that some participants are worried about inflation and therefore a pushing for faster rundown and its monthly asset purchases. They still believe inflation to be transitory, but admits it’s higher than expected and will take longer to normalize them previously anticipated. Turning to equity news given the outbreak of Omicron equity markets sold off aggressively in the latter half of the week. The small ordinaries fell over 2% on Friday and the ASX 200 fell 1.7%. The NASDAQ also fell 2% On Friday, travel companies one of the worst performing sectors with Flight Center of 7.5% Webjet or 5% in cuantas, or 5.5%. Email payments have been under investigation by the Central Bank of Ireland received some positive correspondence on Thursday. Email can now launch new programs as long as they don’t grow faster than the growth cap that both agreed to. This growth cap will be lifted after 12 months as long as email can prove it is executed on all of the remediation items CBI has requested of them. Email was up 32% On Thursday, Fisher and Paykel healthcare released their first half 22 results last week with revenue and profit 4% and 13% of head of consensus expectations respectively. Fisher and Parker was up 4.6% On Thursday, however, gave much of this back on Friday falling three and a half percent. Crown resorts also received another bid from Blackstone at $12.50 per share. This compares to two previous bids from Blackstone of $11.85 and $12.35 per share. Looking to the week ahead, the key focus will be on the Omicron variant as we look to better understand the implications of a new strain its transmissibility and the vaccines effectiveness. In terms of economic news, the market will closely watch US Federal Reserve Chair Jerome Powell speech to get a sense of how the Fed views inflation concerns in the US. The market expects no change the current policy rates. We also have non farm payrolls data to be released on Friday, with the market expecting 550,000 new jobs to be added in the US with the unemployment rate expected to fall to 4.5% from 4.6% and Australia. We have the September quarter GDP to be released on Wednesday. The market is expecting 3% year on year growth, a slowing from the 9.6% achieved in the June quarter. Thanks for listening. We’ll see you next week.