After a steady rise. the market seems to be quieter and sluggish heading into the Christmas holiday period. That suits most ASX investors just fine, especially with the US markets flat overall. It’s like T20 season on the markets is over for now and we’re in the middle overs of a one-day game.
Key Market Headlines
- The FDA has been busy, saying that Moderna’s coronavirus vaccine is “safe and highly effective”, market is anticipating approval by end of the week
- FDA also approves first COVID home testing kit that can be purchased without a prescription
- Pfizer’s vaccine is being deployed across US hospitals
- Australian unemployment rate out this morning, down to 6.8% from 7%
- Resources have been doing well. Oil up 0.4%. Base metals mainly stronger. Iron ore up 0.8%.
The ASX VIX (volatility index) is holding under 15.
Volatility doesn’t necessarily show market direction (up or down) but the range of average price changes over time.
The S&P/ASX 200 VIX Index (XVI) calculates the amount of volatility expected in the market over the next 30 days.
• High readings indicate uncertainty (bearish)
• Normal readings suggest a slight bullish bias
• Low readings indicate low volatility (bullish) and strong investor confidence.
Watchlist, portfolio updates and purchase entries for members are at the bottom of this update.
On to the latest CEO insights.
CEO Insights by Sector
Retail & Ecommerce
“What we have seen as physical retail opens up, this has not had a cannibalising impact on the online channels. It is additive to what is already a tide that has risen online”
Nick Molnar, Co-CEO, Afterpay Ltd
“As we look ahead to post-COVID, we do believe that a lot of the e-commerce gains will stick, and we’ll continue to grow off of a higher base and the reasons why we believe that is convenience is habit forming”
Amy Shapero, CFO, Shopify Inc
“I think the other trend that we believe is significant here [for e-commerce] is entrepreneurship, in times of tough economic climates, we know that business formation generally increases”
Domestic Economy
“We’ve been through some seven years of drought where most of those economies in the Australian bush have struggled to keep afloat, and now with the good harvest and the good tourism, there is money coming back into communities”
Peter Langley, CEO, FedEx’s Australasia
Domestic Property
“The market is improving and there is one reason for that: there is a lot of money at very low rates of interest. That’s the only reason. There is always demand, and there is always insufficient supply. That is still the case. What’s changed is cheap money in great abundance”
Harry Triguboff, CEO Meriton
Energy & Resources
“We’re not an electricity company so we’re not going to make a big announcement about going into renewables. Why? Because I don’t see much money in it, No 1. And No 2 it’s already a very, very crowded space. Electricity markets and retail markets are very crowded. We will continue to operate in fuels”
Kevin Gallagher, CEO, Santos Ltd
Food, Beverage & Hospitality
“There’s absolutely no doubt in my mind that it’s going to take a very long time to recover to 100% of bars and restaurants that were open before the pandemic. I think that’s a long-haul – if we ever get back to that place”
Gavin Hattersley, CEO, Molson Coors Beverage Company
Telecommunications
“Structural shifts are stripping profitability out of the sector: The NBN, growth of the tier-two MVNO [mobile virtual network operator] market, and the OTT [over-the-top/streaming] providers, who contribute little, if anything, to the infrastructure they rely on, yet drive increased usage and continued investment for telecommunications providers”
Kelly Bayer Rosmarin, CEO, Singtel Optus Pty Ltd
Technology
“Over the next decade, technology spending as a percentage of GDP is projected to double”
Satya Nadella, CEO, Microsoft Corporation
“I think we definitely are going to have real structural change [with technology adoption] so when we remove the pandemic constraints, I don’t think we just go back to the way things were in the beginning of 2020 or late 2019”
“We believe the explosion of devices, applications and data at the edge [computing] will continue to drive demand for secure connectivity, cloud computing capabilities and analytics, especially in a post-COVID world”
Antonio Neri, CEO, Hewlett Packard Enterprise Company
Social Media
“When we think about what drives people to Twitter, we think about the events and topics that are happening in the world”
Ned Segal, CFO, Twitter Inc
Automotive
“It’s very much [a] truck first recovery so far”
Mark Smith, CFO, Cummins Inc [global engine manufacturer]
“I think overall the automotive industry is going to have a strong fourth quarter, and I do believe it’s going to be a strong 2021. I think the industry is in a sweet spot right now”
Mark Fields, Former CEO, Ford Motor Company
“Labour shortages have become increasingly the concern since we restarted our operations in Q3”
Doug DelGrosso, CEO, Adient plc [world’s largest automotive seat manufacturer]
Transport & Logistics
“We have the weekly normal flights, but we’ve had to top them [up] with additional flights because there has been so much volume coming into Australia and it has been difficult to get the volume in”
Peter Langley, CEO, FedEx’s Australasia
Travel & Leisure
“There’s been a rush of bookings as each border restriction lifted, showing that there’s plenty of latent travel demand across both leisure and business sectors”
Alan Joyce, CEO, Qantas Airways Ltd
Environmental, Social & Governance (ESG)
“If we’ve got customers today that aren’t thinking about climate change, haven’t considered it in terms of their operations, what the risks are and what they should do about it, that’s a pretty big red flag to me that these are not good customers in the way they think about other issues”
Shayne Elliott, CEO, ANZ Banking Group Ltd