• Sat. Oct 29th, 2022

Australian shares are in line for further gains on Monday as investors shake off the threat of a second national lockdown in the US.

Nov 15, 2020

“There’s a lot a signs that the gains for the Australian market will continue,” Mr Welch said.
“What we have seen is earnings stabilise and start to recover. And there’s a lot of evidence that will continue in Australia because we are on the cusp of this grand re-opening, which is quite different to other parts of the globe.”
The situation in the US has continued to deteriorate after a record 177,000 COVID-19 cases were reported on Friday, consolidating an acceleration in numbers that followed a low of 24,000 cases in September.
And while a national lockdown now appears unlikely, US state governments are ramping up restrictions and interstate travel advisories as the daily case count on a national level accelerates further into unchartered territory.
On Friday the governor of Virginia announced state-wide measures, including reduced opening hours for licensed hospitality venues and limiting all “in-person” gatherings to 25 people.
Meanwhile, California, Oregon and Washington issued a co-ordinated advisory to “urge against non-essential out-of-state travel”.
The comments from Dr Murthy aligned with a statement from another member of the President-elect’s coronavirus taskforce, Celine Gounder.
“As a group, really the consensus is that we need a more nuanced approach, Dr Gounder told US media on Friday in comments that reflected the diminished willingness to advocate for a nation-wide lockdown.
Economic data from countries around the world support the view the recovery has been relatively resilient despite the rising case numbers in the US and Europe, Mr Welch noted, pointing to the forward-looking purchasing managers’ indices.
“PMIs globally have stayed in positive territory despite the second and third waves,” he said.
“Services side has lagged a little, which is expected given the limitation on services has been the response from governments, but they’ve been loathe to shut other areas of the economy.” he added. “So the economic recovery looks solid.”
Attention locally will turn to public appearances from the Reserve Bank of Australia governor Philip Lowe in a week that will also see a speech from the bank’s assistant governor Chris Kent and minutes from the RBA board’s last meeting released.
While the appearances are expected to be used as an opportunity to further explain the historic rate cut and quantitative easing policy unveiled at the bank’s last meeting, AMP Capital’s head of investment strategy Shane Olive said there may be other statements of note.
“Recent positive news regarding a vaccine may suggest upside risks to the RBAs growth forecasts if a vaccine can be rolled out earlier than expected,” Dr Oliver said.
Data on the domestic labour market due on Thursday is expected see the Australian Bureau of Statistics report a fall of 30,000 in the number of employed and an increase in the unemployment rate to 7.1 per cent, according to average market estimates.