From bulls to bears and back again, all in 11 frantic days
The US is officially back in a bull market and the bear is dead, at least for this week.
The markets are ruled by fear and greed.
The Dow Jones rose another 6.4 per cent overnight, ending a technical bear market, which is indicated by a fall from a peak of 20 per cent or more.
The bear market last just 11 days, the shortest in history.
The ASX 200 is following suit but is still 26 per cent down on its highs. It followed this morning with a rise of 2 per cent at the open, but fell by midday to be down 64 points. Business is also expecting more help to be announced today by the Federal Government.
The revival in America is on the back of a $US2 trillion ($A3.3 trillion) stimulus for the nation which is now the coronavirus hotspot with a huge surge in cases overnight. There are now 82,000 cases in the US overtaking China’s official figure of 81,000, which is considered well below reality.
One of the winners in this morning’s ASX trade was Afterpay, which has climbed back after being slashed by the market in recent weeks. Its shares rose another 15 per cent this morning.
One of Australia’s biggest companies, Woodside, announced a big cutback in spending on the back of a collapsing oil price.
Woodside will cut its capital expenditure by 60 per cent stalling its development of the Pluto and Scarborough projects.
Coal producer South 32 also cut $US60 million ($A264 million) from spending over the next 15 months to protect its financial position.
South 32’s biggest step was to cut its $121 million share buyback.
RBC Capital markets said the move by Woodside was prudent and followed similar actions by Oil Search and Santos.
Incitec Pivot also said its coal seam gas joint venture in Queensland with Central Petroleum has been stalled at the request of Central.
Incitec said the oil and gas sector had been significantly impacted by logistical disruptions caused by the COVID-19 pandemic, as well as significant disruptions to the global oil and domestic gas markets.
“IPL and CTP remain committed to the domestic gas project and look forward to restarting activities on the planned three-well production pilot as soon as possible,” IPL managing director Jeanne Johns said.
“IPL’s gas supply agreement with CTP, for the supply of natural gas to IPL’s Gibson Island site in Queensland ended in December 2019. Gas supply from Australia Pacific LNG will meet the plant’s needs from 1 April through to 31 December 2022.
Queensland company Terracom also told the market this morning that it now had more than 90 per cent of acceptances for its offer for Universal.
