Afternoon Report / Stocks make a comeback ahead of the weekend

By Market Matters 26 June 20

Stocks make a comeback ahead of the weekend

Market Matters Afternoon Report 26th June 2020

WHAT MATTERED TODAY

After a tough day at the office yesterday, stocks recovered today thanks to a late rally in the US overnight despite continued growth in COVID-19 infections. While this week saw a distinct increase in negative news flow, both in terms of the virus + concerns locally around rising unemployment and the looming ‘fiscal cliff’ in September (when Govt assistance packages are due to roll off), the market remained fairly resilient which the ASX 200 off only -0.65%, highlighting MMs view that dips are being bought. QANTAS (QAN) came back on the boards after successfully raising $1.4bn at $3.65 a share, opening at $4.00 this morning, which was a strong result, although that move tapered off during the session with the stock closing at $3.81, down 9%.

Material stocks were well supported today, Copper doing well with Oz Mineral (OZL) +3.39% and Sandfire +6.2% on a UBS upgrade while the banks were led higher by Westpac / +3.27% thanks to a win in the Federal Court in what was known as the ‘Shiraz & Wagyu’, case, essentially the regulator claimed that WBC loan suitability tests were floored,  something they disagreed with and so too did the regulator. Another hit to the regulator who will also pick up Westpac’s costs.  

Nickel stocks remain on our radar, today Western Areas (WSA) remained well bid while Mincor (MCR) came back online post equity raise. We’ll look at this stock again when shares have been issued with the view that the stock will track closer to 70c. Gold also in our sights with Newcrest Starting (NCM) starting to look good.

Overall, the ASX 200 added +86pts / 1.49% today to close at 5904 - Dow Futures are trading down -53pts/-0.21%

ASX 200 Chart

ASX 200 Chart

CATCHING MY EYE:

Sectors this week

Source: Bloomberg

Stocks this week

Source: Bloomberg

BROKER MOVES:

·         Metals X Cut to Speculative Buy at Bell Potter

·         Coronado Global GDRs Raised to Buy at UBS; PT A$1.80

·         Western Areas Cut to Neutral at UBS; PT A$2.85

·         Sandfire Resources Raised to Buy at UBS; PT A$6

·         Freedom Foods Cut to Neutral at Citi; PT A$3.27

·         Qantas Cut to Neutral at Citi; PT A$4.60

·         Crown Resorts Raised to Buy at Morningstar

·         Alumina Raised to Hold at Morningstar

·         Sydney Airport Raised to Buy at Morningstar

·         Orocobre Cut to Neutral at Credit Suisse; PT A$2.50

·         Flight Centre Cut to Hold at Jefferies; PT A$13

·         Mayne Pharma Raised to Buy at Bell Potter

·         Woodside Raised to Overweight at JPMorgan; PT A$26.50

OUR CALLS

No changes today

Major Movers Today

Have a great night

James & the Market Matters Team

Disclosure

Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.

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