ASX Markets

WES delivered stronger than expected 2H20 sales growth with Bunnings up almost 20% on the same time last year and Officeworks up 28%.

Total online sales growth across the retail businesses was very strong, up 89%. Full-year FY20 underlying EBIT A$2.9bn.

WES has been too expensive and our patience is now paying off. The stock has corrected 10% but could have further to go, given the overall selling we’re now experiencing in global markets.

WES trades on a forward yield of 3.65%. The chart below shows the wide range where we expect buying support to build.

Stay short the NASDAQ or other related hedges, as long as the index continues to trade below the 10-day average.

Our hedge basket includes; BBUS, BBOZ, SNAS, YANK and GDX.

For more detail on our portfolio strategies, please call 1300 614 002.

U.S. consumer spending appeared to slow in August as extended unemployment benefits were cut for millions of Americans.

Job growth slowed further and new applications for unemployment benefits remained at high levels in September.

The correction in the NASDAQ continues, as reflected in the daily close levels below the 10-day average.

For more detail on our portfolio hedging strategies, please call 1300 614 002.

Citigroup was more downbeat about recent economic trends than some peers. The bank’s latest forecast contemplates a slower pace of economic recovery, particularly in the U.S.

Macquarie Bank has guided to 20 – 30% lower earnings in FY21.

For regular listeners to our weekly webinar series, you’d be aware of our negative outlook on Macquarie Bank and the overhead resistance at $130 per share.

1H21 profit guidance is now 35% lower than the same time last year, this implies 1H21 profit of $950mn.

There may be room for a slight improvement in the 2H21, due to asset sales but the outlook for full year earnings remain well below FY20 levels.