It was a slightly disappointing end to a fantastic week for Australian share market investors who have seen an impressive 3.5% of value added in one fell swoop.
It could have been even better if it wasn’t for a retreat on Thursday and Friday but with more than 8% still added so far in November, it doesn’t pay to quibble.
On Friday the retreat on the ASX 200 was just 0.2% to 6405.2 points after Wednesday saw the index approach a nine-month peak which takes us right back to before the COVID-19 pandemic suddenly caused a serious global market crunch.
Positive vaccine news boosts stocks
Not surprisingly, it was more news on the pandemic that supplied the fuel for this rally, with the news that a Pfizer vaccine trial had produced a better than 90% effectiveness against COVID-19 acting like a financial balm as well.
The other big driver was the post-election picture which the US market loved – a likely Biden presidency that should be more stable and predictable that the Trump years combined with a Republican Senate majority that will act as a significant hand brake on any Democrat plans to spend up big.
Profit taking for travel stocks
On Friday the main factor driving some weakness into the market was a bout of profit taking, particularly in those stocks that had risen strongly on news that a vaccine should enable a staged return to a situation that is closer to business as usual.
That was particularly the case for travel, infrastructure, energy and entertainment companies that flew up so strongly earlier in the week.
A good example was BHP (ASX: BHP) which fell 1.9% to $35.77, while financials were generally lower, along with virtually all of the property trusts.
Toll road company Transurban (ASX: TCL) was down 0.9% and there were some consistent falls among the travel stocks, including Flight Centre (ASX: FLT), Webjet (ASX: WEB), Corporate Travel (ASX: CTD) and Sydney Airport (ASX: SYD).
Worsening COVID situation tempered by vaccine news
Looking forward, the worsening virus death and infection numbers coming out of Europe and the US will continue to act as a hand brake on further rises but any positive news on other vaccine candidates will help investors to see beyond that to a brighter future.
Pulling in the opposite direction on Friday were some of the gold mining and technology stocks.
Gold stocks do well
Shining brightly in the gold space was Northern Star (ASX: NST) which added a strong 7.2% to $15.11, while heavyweight Newcrest (ASX: NCM) was up 2.8% to $29.84 while Evolution (ASX: EVN) jumped 6.4% to $5.99.
In the tech space buy now pay later company Afterpay (ASX: APT) rising 2.6% to $101.85.
Investors also warmed further to Telstra’s (ASX: TLS) plans to release value by carving the company into three with the shares up 1.6% to $3.13.
Small cap stock action
The Small Ords index rose 2.29% to close the week on 2944.0 points.
Small cap companies making headlines this week were:
Azure Minerals (ASX: AZS)
Australian explorer Azure Minerals has unearthed more nickel-copper sulphides at its promising Andover project in WA.
The fourth hole in the company’s campaign intercepted a zone containing mineralised intervals, including massive and semi-massive sulphides, and diamond drilling is underway to test for potential up-dip extensions.
In a separate announcement, Azure revealed assays from the first holes of the campaign confirmed the presence of high-grade mineralisation, improving the company’s confidence in Andover’s potential to host a substantial nickel and copper deposit.
Crowd Media (ASX: CM8)
Crowd Media has launched an artificial intelligence-driven chatbot as a beta version of its talking head technology.
The chatbot will be trialled with US skincare brand MD Complete to assist customers in selecting its range of products distributed through Crowd’s online media channels including Amazon.
The social commerce business also announced this week it had entered into two new deals to fast-track its growth aspirations, based on talking head technology and the creation of “digital ambassadors” to power influencer marketing.
Montem Resources (ASX: MR1)
ASX debutant Montem announced this week it had uncovered thick coal seams from a 2020 drilling program at its Chinook Vicary coking target area in Alberta.
Thirteen holes across eight targets recorded a maximum apparent cumulative coal thickness of 61.1m, with an average cumulative thickness of 22.7m.
Coal quality test results are expected in the new year and Montem is embarking on a new mining concept study for the project.
Argent Minerals (ASX: ARD)
Confidence has increased in the development potential of Argent Minerals’ Kempfield project in New South Wales after assays returned broad zones of high-grade silver, lead and zinc.
Grades of up to 126.14g/t silver, 2.63% lead and 4.6% zinc were returned from infill reverse circulation drilling with the entire program comprising 23 holes for 2,624m.
Argent said the results continue to shore up its resource model for Kempfield.
Megado Gold (ASX: MEG)
Fieldwork exploration at Megado Gold’s prospective Chakata project in Ethiopia has discovered multiple artisanal workings and visible gold in outcropping quartz veins.
A review of historical exploration has also yielded “highly significant results”.
The newly-listed company believes the structure which hosts the neighbouring Lega Dembi and Sakaro gold mines extends south through Chakata and is “readily identifiable” in geophysical imagery.
Lifespot Health (ASX: LSH)
As it advances its medical cannabis inhaler device program, Lifespot Health has enhanced its leadership team and topped up its cash reserves.
The company plans to begin clinical trials of its Medihale medical cannabis vape device by the June quarter next year.
“Lifespot has viewed cannabis as a medical solution for patients from its inception, and it’s backed that position with the development of its inhaler devices to meet the needs of patient and physicians. It’s a position that aligns not only with medical professionals but also knowledgeable investors such as Cannvalate and MDI,” Lifespot chief executive officer Matthew Golden told Small Caps.
NewPeak Metals (ASX: NPM)
Queensland-based NewPeak Metals announced on Thursday that its projects in New Zealand, Argentina and Finland would be prioritised for gold drilling in the coming months.
At least 12 shallow and deeper diamond drill holes, with a maximum depth of 200m, have been planned in New Zealand for more than 1,000m of drilling.
Argentina will be next in line, with drilling at the Cachi project starting next month and the Las Openas project scheduled for the first half of 2021.
In Finland, NewPeak said it would be assessing the gold potential of a large reservation permit surrounding its Hopeavuori project.
Alice Queen (ASX: AQX)
At its Horn Island project in Queensland, Alice Queen has intercepted gold in all holes undertaken in its resource extension program.
The company has now received assays from the six diamond core holes with all holes uncovering mineralisation exceeding 0.5g/t gold.
Highlight results were 35m at 2.1g/t gold, including 9m at 5g/t and 1m at 22.4g/t; 19m at 2g/t gold, including 2m at 6.3g/t and 1m at 6.1g/t; and 13m at 1.7g/t gold, including 1m at 15.6g/t.
The week ahead
For once there is no shortage of Australian news to look forward to in the coming week, particularly focussed on the Reserve Bank which has been pivotal in setting up the Australian economy to resume growth after the pandemic recession.
There will be plenty of work for RBA analysts with Governor Philip Lowe delivering a speech on Monday.
That is followed up by the release of the Reserve Bank Board meeting minutes on Tuesday and also a speech from Reserve Bank Assistant Governor Christopher Kent speech on the same day while Dr Lowe will return for a return performance in a forum on the same day.
With the Board deciding on a $100 million government bond buying program to suppress interest rates and also reducing the cash rate to just 0.1% there is plenty of explanation that market analysts will be keen to hear.
Add on a speech by deputy governor Guy Debelle in the following week and that’s a heck of a lot of RBA information in a very short period of time.
That’s not all for the coming week with some pivotal data updates on jobs, wages and retail spending that will paint a fairly detailed picture on how the economy is recovering after pandemic lockdowns.
There is also the Australian Bureau of Statistics (ABS) October release on the household impacts of COVID-19 survey which could also be useful in working out how the recovery is proceeding.
Internationally there is also a fair bit to look out for with a range of Chinese numbers on retail, production, investment and house prices.
Similarly, there is a welter of data from the US including manufacturing, retail sales, imports and exports, industrial production, business inventories and a range of housing figures.