Afternoon Report / CBA upgrades GDP outlook

By Market Matters 13 November 20

CBA upgrades GDP outlook

Market Matters Afternoon Report 13th November 2020

WHAT MATTERED TODAY

A bit of shine came off the market into the end of the week though investors were pretty keen to buy weakness, helping to lift the index around 25pts from the lows. REITs – one of the big winners from positive vaccine news earlier in the week – gave some back today, as did energy which was softer overnight on higher inventories. Communications led the index as Telstra saw some follow through buying on the back of yesterday’s investor day.

CBA upgraded their growth outlook into 2021 looking for a 4.2% rise in GDP as the economy recovers. The bank is now the most bullish of the private forecasters for next year. The modelers seem to have undershot the recovery thus far, and if upgrades keep coming it could prove a tailwind for banks in particular with the market pricing in some pretty dire bad debt charges through the next few years on a soft economy. Costa Group (CGC) promoted current COO Sean Hallan into the CEO seat – Hallan has been with Costa since 2017. We like the hire; it reduces the risk of a new management re-set to earnings – we hold CGC in the Growth Portfolio.

By the close, the ASX 200 fell -13pts / -0.2% to close at 6405. Dow Futures are trading down -28pts/-0.10%

ASX 200 Chart

ASX 200 Chart

CATHCING MY EYE

Sectors this week

Stocks this week

BROKER MOVES

·         Sonic Healthcare Raised to Buy at Citi; PT A$38.50

·         Evolution Reinstated Buy at Jefferies; PT A$6.50

·         CSR Cut to Neutral at Macquarie; PT A$5.10

·         Xero Cut to Market-Weight at Wilsons; PT A$115.91

·         Seven West Raised to Outperform at Credit Suisse

·         GrainCorp Raised to Add at Morgans Financial Limited; PT A$4.79

·         Decmil Rated New Speculative Buy at Euroz; PT A$1.01

·         GrainCorp Raised to Buy at Bell Potter; PT A$4.85

OUR CALLS

No changes today

Have a great weekend,

James, Harry and the Market Matters team

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