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ASX overcomes weak start, interest rates on hold, Santos (ASX:STO) to be net zero carbon by 2040, strong open ahead

Every sector on the ASX finished higher to start December, the ASX200 (ASX:XJO) adding 1.1% with consumer discretionary and financials the highlights. 

APRA released a scathing review of Westpac Bank’s (ASX:WBC) internal culture, but the market was seemingly relieved that the assessment was now over. 

FlexiGroup (ASX:HUM) which will shortly be known as Humm announced a joint venture with neo-bank Douugh (ASX:DOU) to launch a BNPL platform in the US; both shares rallied on the result. 

Santos Ltd (ASX:STO) continues to emerge from the weakness of March, updating production guidance by around 5% and reporting a forecast cash flow breakeven oil price of USD$25 per barrel. 

Management also announced the business would be Net Zero Carbon by 2040. 

Despite the positive news, the oil and gas sector will remain under pressure from an impending breakdown in OPEC production cuts. 

With most oil companies rallying ahead of the oil price recovery more diversified exposures offer better risk adjusted returns at the current time in my view.

Rates on hold, KFC paying off for Collins Food (ASX:CKF), BHP (ASX:BHP) remains immune from China pressure

The RBA kept interest rates on hold in its monthly meeting and flagged that it’s QE program would remain under review, boosting markets in the afternoon. 

KFC, Sizzler and Taco Bell owner, Collins Foods (ASX:CKF) reported a more resilient result than expected, with sales rising 11% to $499 million in the six months to October 18. 

Management confirmed further investment in their click-and-collect technology as consumption habits continue to change. 

Despite the strength, profit fell 19% to $16.5 million and shareholders incurred a $3.3 million write-down on the final closure of the Sizzler restaurant chain. 

It’s clear that Australian’s turn to comfort food in pandemics, the question is can growth continue into 2021, management are pinning their hopes on an expansion of the Taco Bell franchise, but it seems a more difficult proposition. 

BHP Group (ASX:BHP) has continued to defy the Chinese pressure, adding 1.3% on Tuesday, with iron ore seemingly immune from additional tariffs. 

According to experts, the tariffs placed on Australian goods may be causing anxiety among Chinese importers who are being forced to pay higher prices on lower quality goods from elsewhere, hopefully this contributes to a fast normalisation in recent policies.

US$900 billion stimulus is back, Zoom (NASDAQ:ZM) tanks, Blackberry (NYSE:BB) making a comeback

US markets moved back to record highs overnight, jumping in unison but once again driven by the technology sector, the Nasdaq adding 1.5% and the S&P500 1.1%. 

Every sector finished higher after the US Government flagged an impending agreement on over US$900 billion in fiscal stimulus centred around an extension of their own Job Keeper package. 

This will clear benefit the financial sector and has will see the Australian market head higher on the open. 

On a company specific level, Zoom Communications (NASDAQ:ZM) tanked by 15.7% despite announcing a 367% increase in revenue from 2019 to US$777 million, well ahead of earnings estimates. 

This reflects the tiring of the WFH story and increasing likelihood of a swift return to normal. 

In a sign that every company has it’s time in the sun, Blackberry Ltd (NYSE:BB) owner of the popular 90’s phones, signed a company changing deal with Amazon to provide their renowned intelligent vehicle data platform to Amazon Web Services allowing car companies to securely utilise vehicle sensor data. 

Australian GDP data will be released today at 10.30 am.