ASX to open mixed, Wall Street slides again, despite Fed aid, Senate deadlocked, again, on stimulus deal

March 24, 2020 - 1 week ago
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Another attempt to advance the U.S. aid bill on Capitol Hill failed in an afternoon vote on Monday, as Congress hits another roadblock in talks to inject nearly $2 trillion into the economy.

Meanwhile, Wall Street losses continued to swell despite the Fed’s announcement overnight that it would take additional aggressive action, including buying an unlimited amount of Treasury bonds.

The Dow Jones Industrial Average on Monday fell below 18,332.74, briefly, with the 30-stock index below the level where it closed on Nov. 8, 2016, the day Trump won the 2016 election over Democrat Hillary Clinton.

The index later moved off its session lows to close at 18,591.93, 259 points above its close on Election Night 2016.

The SPI 200 futures closed at 4,522 and points to a +39 rise or +0.9%; meanwhile, the Australian Dollar, our local currency is currently buying US$0.5830 (as of writing).

Daily outlook on the benchmark S&P/ASX 200

The benchmark S&P/ASX 200 Index spirals lower on Monday and erases nearly $100 billion in a day of volatile trade after the Australian states move to a shutdown of more businesses, with only those deemed as essential services allowed to remain open in an attempt to halt the spread of the deadly coronavirus.

Investors were also rattled by the failure of the U.S. Congress to pass the $US1.8 trillion ($3.1 trillion) package announced by U.S. President Donald Trump.

The stalemate came hours after Democratic leaders warned that the bill was not to their liking because they said it did too much to bail out companies and not enough to help workers.

Meanwhile, the finance sector was the most significant weight on the ASX as the “Fab Four” (banks) led the sector to a 10.22% decline and its lowest point since 2011.

The National Australia Bank plummeted tumbled back to the lows last recorded back in 1996, after falling -9.88% to $14.225, while Westpac Banking Corp lost -10.22% to $14.23, ending the day’s session its lowest point since March 2003.

Meanwhile, the Commonwealth Bank dropped -7.35% to $55.505, with the ANZ Banking Group erasing -9.66% to close the session at $14.40.

Elsewhere, Macquarie Group was also struck and finished the session down -13.25% at $74.06.

Shares in the investment bank have now roughly lost -50% from their record highs hit last month.

After a very turbulent day, the battered and bruised index closed at its lowest level since late November 2012, erasing -270.6 points, or -5.6%, to 4,546, and now down -36.8% from its peak just over a month ago.

Several other index heavyweights were also taking a heavy blow, with most stocks on the index falling through the session.

Goodman Group dropped -9.29% to $10.45, while Wesfarmers plummeted -4.54% to $31.77.

The closure of casinos, pubs and clubs as of Monday weighed heavily on the major casinos’ stocks with Crown Resorts and Star Entertainment Group shares didn’t trade on Monday, with both companies entering a trading halt.

SkyCity Entertainment Group plummeted -15.17% to $1.23 while gaming machine manufacturer Aristocrat Leisure plunged -10.97% to $15.615.

Afterpay shares also took a massive blow after plunging -28.46% to $8.90; meanwhile, Xero lost -4.86% to $58.75, with Computershare dropped -6.36% to $8.69 while WiseTech outperformed and gained +1.69% to $12.00.

Even Commodity prices couldn’t dodge the weight on the index as Titans Rio Tinto dropped -3.29% to $78.71, while Fortescue Metals Group declined -8.58% to $9.59 and South32 lost -5.93% to close at $1.665. Meanwhile, BHP Group rose +0.07% to $27.03.

The major supermarkets were also weaker, with Woolworths and Coles reporting supplies were now returning to normal levels, and panic buying was easing. Woolworths dropped -2.72% to $36.45 and Coles tumbled -7.2% to $15.58.

Only a minority of companies ended the session higher on Monday with gold miners leading the gains with Newcrest Mining advancing +4.55% to $22.73, while Northern Star Resources climbed +2.3% to $10.97, and Evolution Mining advanced +0.8% to $3.65.

Some healthcare stocks also came around to support a modest bid tone with CSL managing to reverse a substantial down opening to close to a gain of +4.19% at $282.24, NIB Holdings rose +1.8% to $5.05, and Fisher & Paykel Healthcare added +1.9% to close the session at $26.30. Sonic Healthcare rose +6.32% to $23.04, while Cochlear slipped -0.28% to $159.41.

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