Weekly Market Wrap

Weekly Market Wrap Nov 23, 2020 / Reading Time: 2 mins
By Joshua Barker Reading Time: 2 mins

23rd of November 2020

ASX Update

The ASX finished the week with a 0.1% dip to 6539. Investors still managed to add 2.1% for the week – the third straight week of gains. The month’s current 10.3% rise would be the biggest monthly gain since the ASX 200 came into operation in 2000. The index is now just 2.2% lower for 2020.

Gains over the past three weeks have been helped by a rotation back into cyclical stocks such as the banks, property, and energy. A favourable US election result and a slew of vaccine updates have also aided investor confidence, as has signs locally that the containment of the virus and economic recovery remains on track.

Top/Bottom Performers (in ASX200)

Top Gainers:

  • Unibail-Rodamco-Westfield +25.7% (URW.AX)
  • Bendigo & Adelaide Bank Ltd +14.5% (BEN.AX)
  • Alumina Ltd +12.8% (AWC.AX)

Top Losers:

  • Evolution Mining Ltd -8.8% (EVN.AX)
  • Gold Road Resources Ltd -8.6% (GOR.AX)
  • Silver Lake Resources Ltd -7.2% (SLR.AX)

Global Market

Wall Street closed in the red on Friday, as rising new coronavirus cases and policy uncertainty dented sentiment. On Friday, the Treasury Department and the Federal Reserve disagreed over the continuation of funding for some of the emergency programs implemented during the recession, as Secretary Steven Mnuchin is seeking to end several Fed facilities. On the pandemic side, California Gov. Gavin Newsom issued a “limited Stay at Home Order” on a majority of the state’s residents, while the CDC advised Americans against traveling for Thanksgiving. On the positive side, Pfizer and BioNTech said they will apply for an emergency approval of its Covid-19 vaccine from the Food and Drug Administration on Friday. 

The Dow Jones lost 220 points or 0.8% to 29,263 and the S&P 500 shed 24 points or 0.7% to 3558, while the Nasdaq fell 50 points or 0.4% to 11,855. During the week, the Dow retreated 0.7% and the S&P 500 dropped 0.8%, whereas the Nasdaq rose 0.2%. 

Play of the WeekFurther Vaccine Talks

Over the past couple of weeks we have seen updates from both Pfizer and Moderna, both boasting around 95% effectiveness rates. This week we will most likely get another update from them, as well as interim results from AstraZeneca if it’s Phase 3 trials. Since being released, some have chosen to critique the results’ conclusiveness and even the safety of the drugs so how the market reacts to these further and more detailed updates will be telling to the direction the market takes. 

Commodities

WTI crude futures gained 5% this week to settle at $42.2 per barrel on Friday, booking a third consecutive weekly rise, helped by successful COVID-19 vaccine trials and hopes that OPEC+ would delay by at least three months from January a planned crude output increase.

Spot gold dropped 0.8% this week to settle at $1,873 per ounce on Friday, booking a second week of losses.

Silver declined similarly with a drop of 2.4% to $ 24.10.

Iron ore currently trades at $123.

Looking Ahead…

Minutes from the Fed and ECB meetings will be in the spotlight next week along with PMI surveys for the US, UK, Eurozone and Australia. Also, the US is releasing the second estimate of Q3 GDP.