From Jonathan Bayes, consultant Chief Investment Officer, Bentleys Wealth Advisors
Key market themes
Update on the coronavirus
- The Italian Prime Minister Tuesday morning announced a nationwide ‘quarantine’ restricting travel without a business or health-related justification until at least April 3rd. Schools and universities are already closed and public events will be cancelled.
- President Trump plans to unveil a fiscal aid package on Tuesday designed to alleviate some of the pressures on business and individuals in the wake of coronavirus quarantine measures. The package will likely see a payroll tax cut and paid sick leave for those hourly workers quarantined by the virus
US Politics
- Joe Biden’s success in winning 10 of the 14 states up for grabs at last week’s Super Tuesday has put him in a strong position to win the Democrat nomination and to challenge President Trump at the November election
- Trump’s questionable handling of the coronavirus contagion has dented his poll standing and seen Biden leap to near enough neck and neck in the odds for
Economic data released
US Economic data finished February strong and untouched by virus concerns
- Manufacturing data has stabilised with the new year and China trade deal, whilst consumer confidence and small-business confidence remains elevated and untouched by coronavirus fears
- February payroll data surged by 273,000 jobs
Australian economic data however remains as mixed as ever
- Weekly ANZ Consumer Confidence this week dropped to its lowest level on record
- January Building Approvals saw a substantial monthly pullback that took annual approvals -15%. Apartment approvals dropped to their lowest monthly figure since 2013.
- February Australian Industry Group data on the Construction industry remain significantly in contraction
- Q4 GDP posted an annual rate of 2.2%, marginally ahead of expectations
Observations from the past week
High Yield Credit Spreads blow out
Alongside the sell-off in global equity indices, corporate credit markets similarly saw investors seeking to de-risk portfolios.
The chart below shows the average spread above swap rates on US High Yield bonds which this month has blown out from 300bp over to 642bp over currently, but remains below the levels achieved during the European debt crisis in 2011 and an eerily similar sell-off in 2015 when oil prices collapsed and led to fears of defaults from highly indebted oil exploration companies.
Looking ahead
| Monday | N/A |
| Tuesday | AU NAB Business Confidence (Feb), US NFIB Small Business Confidence (Feb) |
| Wednesday | AU Westpac Confidence (Mar), |
| Thursday | US Bloomberg Weekly Confidence |
| Friday | US Michigan Consumer Sentiment (Mar) |
Monday 5pm values
| Index | Change | % | |
| All Ordinaries | 5822 | -689 | -10.6% |
| S&P / ASX 200 | 5760 | -681 | -10.6% |
| Property Trust Index | 1507 | -72 | -4.6% |
| Utilities Index | 7716 | -116 | -1.5% |
| Financials Index | 4987 | -917 | -15.5% |
| Materials Index | 11034 | -1356 | -10.9% |
Monday closing values
| Index | Change | % | |
| U.S. S&P 500 | 2746 | -208 | -7.0% |
| London’s FTSE | 5966 | -614 | -9.3% |
| Japan’s Nikkei | 19968 | -1174 | -5.6% |
| Hang Seng | 25040 | -1089 | -4.2% |
| China’s Shanghai | 2943 | +63 | +2.2% |
Key dividends
| Date | |
| Mon 9 March 2020 | Div Ex-Date – QUBE (QUB), REA Group (REA). WBCPI
Div Pay Date – Metrics (MXT, MOT) |
| Tue 10 March 2020 | Div Ex-Date – Reliance Worldwide (RWC), Sonic Healthcare (SHL)
Div Pay Date – MQGPD |
| Wed 11 March 2020 | Div Ex-Date – ANZPG/ANZPH BWX (BWX), Brambles (BXB), CSL(CSL), NABPE, Regis Healthcare (REG)
Div Pay Date – APA (APA) |
| Thu 12 March 2020 | Div Ex-Date – Costa (CGC), NABPC, WBCPE/WBCPF/WBCPH |
| Fri 13 March 2020 | Div Ex-Date – ANZPE/ANZP, Boral (BLD)
Div Pay Date – Domain (DHG), Dominoes (DMP) |
Monday 10 March 2020, 4pm
For more information on the above please contact Bentleys Wealth Advisors directly or on +61 2 9220 0700.
This information is general in nature and is provided by Bentleys Wealth Advisors. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
