ASX finishes flat but up 5.4% for the week

The ASX finished flat of Friday but the index still managed to clock its best weekly gain in more than six months.

Australian stocks were poised to edge higher at the open. Picture: Bloomberg

• JobKeeper saved 4,600 firms: RBA
• Qantas adds new regional route
• CIMIC reports recovery ‘momentum’

Welcome to the Trading Day blog for Friday, October 9. Australian stocks rounded out a 5.4 per cent weekly gain but finished Friday’s session flat after plunging 20 points in the closing match. The Crown casino inquiry continues and the RBA released its financial stability review.

Lachlan Moffet Gray 5.45pm: Ex-St George staffer banned

A former employee of St George Bank has been banned from providing financial services and engaging in credit activity after it was discovered that they wrote almost 50 fake cheques worth more than $400,000.

On Friday the Australian Securities and Investment Commission said Todd Butler wrote 44 worthless cheques from his personal account with a value of $410,000 over the five years from 2012 to 2017.

Mr Butler previously worked as a business development manager for St George Bank in Sydney between 2016 and 2018 following a 23 year long career working for other financial institutions such as HSBC Bank, Firstmac, Centre Point Lending Solutions and National Mortgage Company.

In addition to writing the worthless cheques, ASIC said Mr Butler made two home loan applications, one in 2017 and one in 2018, that were declined due to the use of false documents in the application process.

One of the loans was also declined because Mr Butler understated his liabilities.

ASIC said it was concerned that one of the valueless cheques enabled Mr Butler to present an untrue asset position to a bank in an attempt to secure a loan.

ASIC also said Mr Butler accepted its findings that he signed a loan document misstating his asset position and wrote cheques from his account while knowing that the account did not have the money in it.

However, it was not found that Mr Butler engaged in fraudulent activities with any of his clients money or accounts.

As punishment ASIC handed down a band on Mr Butler engaging in credit activity and a ban in providing financial services for a period of five years as “given Mr Butler’s experience in the financial industry and the likelihood that he would contravene a financial services law or credit law in the future”.

Mr Butler can appeal ASIC’s decision through the Administrative Appeals Tribunal.

4.35pm: ASX closes flat

The local sharemarket finished flat on Friday after surging to a 5-week high and then plunging 20 points in the closing match.

At the close of trade, the ASX benchmark S&P/ASX200 had inched up 0.2 points, to be flat in percentage terms, rounding out a 5.4 per cent gain for the week.

The major banks were mixed, with Westpac putting on 0.5 per cent to $18.21, while ANZ added 0.4 per cent to $18.61. NAB lowered 0.4 per cent to $18.69 while Commonwealth Bank lost 0.6 per cent to $67.71.

BHP inched back 0.2 per cent to $36.58, while Rio Tinto fell 0.5 per cent to $97.50. Fortescue edged 0.3 per cent lower to $16.95.

Qantas lifted 1.2 per cent to $4.32 after the airline announced it would add Merimbula to its network as demand for interstate travel lifts amid boarder restrictions.

CIMIC was among the best performers, gaining 9.2 per cent to $22.17, after the construction and engineering services provider touted an improvement in operating conditions ahead on the back of numerous stimulus packages.

Lachlan Moffet Gray 3.51pm: Sub-committee should have more oversight: Mitchell

Counsel assisting Scott Aspinall has played a recording of a question asked by Stephen Mayne at Crown’s annual general meeting last year where he asked whether there was an arrangement by which James Packer could receive information ahead of other shareholders.

In the answer given by CFO Ken Barton, he discussed the service agreement with CPH but not the shareholder protocol with Mr Packer which allowed him to ask for information from the company.

Mr Aspinall asked Mr Mitchell whether he knew the answer wasn’t entirely truthful.

“As I look at it now, there probably should have been more information. I don’t think it was misleading in any way,” he said.

“I would have thought the shareholder agreement, as we say, which allowed information to Mr Packer under that whole agreement is what would have been covered, and I think that would have been in Mr Barton’s mind, he would have known better than I, but I didn’t think that, we were misleading anybody.

“And it might (be)...there was a refinement that was left out,” he said.

Mr Aspinall said he was not the case a refinement was left out, but the question wasn’t answered fully, and that Mr Mitchell knew that.

Mr Mitchell said he didn’t give it any thought at the time.

“At the time, a great big annual meeting, matters come along - questions asked, answered, I didn’t give it much more thought than all of that,” he said.

“No one was trying to mislead Mr Mayne, I should say,” Mr Mitchell said, adding that Stephen Mayne asked questions for “90 per cent of the time” of the meeting.

“It might have just passed over the top of me,” he said.

“If you have one very good question to ask, maybe you should make it the one.”

Commissioner Bergin stated that an independent director should always seek to give an honest answer to a shareholder.

“Commissioner, I agree,” Mr Mitchell said.

At that point Mr Aspinall told the inquiry he had no further questions.

A document was shown that proved Michael Johnston’s appointment to the Sydney sub-committee was approved by the board in December of last year, and Ms Bergin discussed rearranging the positioning of Crown Sydney within the group so it had more oversight.

Mr Mitchell agreed this should happen and the inquiry closed for the week.

Current Crown board member Andrew Demetriou was due to give evidence today but will now appear when the hearing resumes next week.

Lachlan Moffet Gray 3.27pm: Licencing agreement not on Mitchell’s radar

Mr Aspinall is now asking Mr Mitchell questions about the recent findings in a case brought by ASIC against Mr Mitchell where they alleged he “narrowly” breached his duties as an independent director of Tennis Australia on three occasions while negotiating television rights for the sport with Channel 7.

Ms Bergin asked Mr Mitchell if he gave consideration to his own position on Crown’s board in light of the finding.

“The answer is I have given consideration, and determined that I should stay on the board of Crown,” Mr Mitchell said, due to the fact much of the case was dismissed by the judge, who is determining whether penalties should be applied.

“I’ll wait to see where the further matter of that goes when the matter is completed.”

Mr Aspinall raised a whatsapp message Mr Mitchell sent James Packer last year when Mr Packer’s sale of 19.9 per cent of his Crown shares to Melco was announced.

“Dear James, Mike rang and told me of the share move. FANTASTIC!” the message read.

“I always thought that was a good idea!”

Mr Mitchell said what he meant was that it was a good idea from the perspective of Mr Packer’s financial consideration.

“I’ve always had a feeling that Mr Packer had built up personal debt,” he said.

“This was an opportunity, if he had debt to reduce it.”

Mr Aspinall asked Mr Mitchell about a message he sent Packer about the deal where he noted Mr Packer had “plenty of control”.

Mr Mitchell said he meant that he was glad the Melco deal would allow Mr Packer to retain two directors despite his diluted shareholding.

Mr Aspinall then asked Mr Mitchell about whether he considered whether the Melco deal may violate the agreement Crown had with NSW not to allow an associate of the late Stanley Ho to come into ownership of Crown.

Stanley Ho had a stake in Melco through a private company at the time.

Melco was also owned by his son, Lawrence.

Mr Mitchell said he did not give thought to it, and that he wasn’t certain Lawrence Ho was alive at the time, which he was.

Commissioner Bergin interjected:

“Your company had given very serious undertakings to the NSW government,” she said.

“It looks to me as though the company did not keep that in the forefront of its mind.”

“In my case, I hadn’t either,” Mr Mitchell agreed.

Lachlan Moffet Gray 3.15pm: Mitchell quizzed on board appointment process

Mr Aspinall has asked Mr Mitchell about a time when CPH executive and Crown board member Michael Johnston attended a remuneration committee meeting discussing the controlling shareholder protocol.

Also shared were communications where Mr Johnston discussed replacing former board member Geoff Dixon as a member of the Sydney Sub-Committee with John Alexander.

The reason Mr Johnston gave to Mr Alexander for doing this was the knowledge he had of the agreement with the NSW government regarding the Barangaroo Casino.

Mr Aspinall noted that the ASX board charter recommends committee appointments be discussed by the board in meetings.

Mr Aspinall then shared a text message from Mr Johnston to current Crown chair Helen Coonan from January 21 2020.

“I think it may be useful if I went on the risk committee, happy to discuss,” the text read.

In response Coonan said: “Please!”

Mr Aspinall said the following board meeting contained no consideration about this matter, according to the minutes.

The next meeting of the risk committee features Mr Johnston as a member, Mr Aspinall said, and he asked whether this was an appropriate appointment process.

“I do recall as we got a new chairman, a number of new committees were established and therefore put to the board...and this could have fallen in that,” Mr Mitchell said.

“Perhaps Mrs Coonan could tell you more about that.”

Mr Aspinall has now proceeded to discuss Mr Mitchell’s relationship with the Packer family, asking Mr Mitchell whether he considered himself an independent director.

“I’ve been an independent director right from the beginning,” Mr Mitchell said.

Mr Aspinall tabled pages from Mr Mitchell’s own autobiography highlighting a time when Mr Mitchell was $32m in debt in the aftermath of the 1991 recession.

“Thank you for reminding me of that,” Mr Mitchell said.

Mr Aspinall then read an extract from the book where Kerry Packer approached Mr Mitchell about the debts, saying:

“Harold, I hear you’ve got some problems son, can I help?”

Ruminating on the situation and reading from the book, Mr Mitchell read about how the debt was in part from the personal guarantee he signed in relation to an investment with the Big Banana.

“I took a small shareholding in the Big Banana...what was I thinking? What was I possibly thinking? Never invest in things you don’t know,” Mr Mitchell said, adding that other shareholders “disappeared into the banana fields.”

Mr Packer the elder offered Mr Mitchell a loan of $1.9m, interest free, despite his own financial troubles and subsequent heart attack.

In the book, Mr Mitchell said he would never forget Mr Packer’s kindness.

Commissioner Bergin inquired as to how Mr Mitchell came to know the elder Packer.

Mr Mitchell recounted that he came to know Mr Packer due to his advertisement businesses’ control of cricket ads in the late 70s, when Mr Packer was dealing in the rights of the sport.

Mr Aspinall then read a news article from advertising trade site Mumbrella that claimed Mr Mitchell owed a favour to the Packers due to the loan, and due to the fact that James Packer invested in a business of Mr Mitchell’s called Emitch.

“No,” Mr Mitchell said, adding that Lachlan Murdoch was also an investor in Emitch.

“I don’t accept that, Mr Aspinall, not at all.”

“It’s a gossipy trade magazine and it’s a good yarn, as they would say.”

Ms Bergin interjected to say that the article was based on a “good yarn” from Mr Mitchell’s own book.

Mr Mitchell joked he was not sure he should have written the book.

2.52pm: New home loans spike in August

The value of new mortgages surged to $21.3bn for the month of August, up 19.3 per cent year-on-year, in what the highest level since January 2018.

RateCity.com.au research director Sally Tindall said the home lending market was proving to be more resistant to the coronavirus crisis than what had been expected.

“The country-wide lockdown put the brakes on home sales in May, but since then, the market has rebounded defiantly,” she said.

“While this month’s data might be skewed by a backlog of home loans from the banks, over 200,000 new loans have settled since COVID hit – that’s a pretty decent number considering the turmoil we’ve been through.

“First home buyers in particular have stormed back on to the property scene, with the highest number of new loans settled in more than 10 years.”

Ms Tindall said she expects the number of new loans to fall next month as Victoria’s second COVID-19 wave flows through to the home lending market.

Read more: Home lending numbers spike but Aussies pay down personal debt

Lachlan Moffet Gray 2.40pm: Crown inquiry probes board succession planning

Moving on to discussing the ASX guidelines for company management, Mr Aspinall read a clause that said a well-run company needs independent directors on the board who can challenge management and asked if the Crown board should have done so.

“I’d say looking back of course we could have,” Mr Mitchell said, adding that the “modern board” was “more questioning” and there was “much, much more awareness to it.”

As an example, Mr Mitchell mentioned how Crown was conducting an international headhunt for a group head of compliance and financial crime.

Turning to board succession planning, Mr Aspinall mentioned that a number of Crown board members, including Mr Mitchell had been on the board for “a long time” and asked whether that could impact their independence.

Mr Mitchell raised that many board members are advanced in age and are effective corporate actors, such as News Corp’s Rupert Murdoch.

News Corp publishes The Australian.

“We think that you should continue to get younger people. It doesn’t mean there is anything wrong with older people,” he said.

“I wouldn’t draw a line under the fact that people are in their seventies.”

Mr Aspinall said he was talking specifically about length of tenure of service than age.

“I’d be reluctant to just write a rule that says if you’ve been there a long time you are no longer independent as you might have been,” Mr Mitchell said, adding that Crown board members essentially re-justify their own position every three years.

Mr Aspinall asked if Crown’s board vetting process works in light of the controversies discussed today and whether independent directors could dissent and be listened to.

Mr Mitchell said board processes have only improved and that current chairman Helen Coonan facilitates an environment where things can be discussed openly.

Mr Aspinall has asked Mr Mitchell whether he approves of a service agreement between Crown and their largest single shareholder, the Packer-owned Consolidated Press Holdings, wherein Crown pays a fee for the service of CHP executives.

Mr Mitchell said he supported the agreement as it “formalised” pro bono services provided by CHP executives like Michael Johnston, who is also a Crown board member, for an agreeable price.

Ms Bergin asked if the evidence from the inquiry this far showed that it was “perhaps” better that board members do not “descend” to the level of executives.

“I agree,” Mr Mitchell responded.

Mr Aspinall is now discussing board meeting minutes from a few years ago where a service agreement proposal with James Packer was contemplated, showing Mr Mitchell in favour of the agreement.

The agreement was discussed earlier in the week - it would see Mr Packer take on a role promoting Crown internationally for an annual fee of $11.5m a year.

Mr Mitchell said it seemed to be a good decision at the time.

With Mr Packer he’d proposed it obviously, or CPH had, and i’m mindful of the fact...that Mr PAcker at the earlier time, before all of this, had been instrumental in some incredible international moves we had made,” Mr Mitchell said, pointing to the Melco-Crown venture in Macau.

Mr Aspinall also asked Mr Mitchell why he supported a controlling shareholder protocol that allowed Mr Packer as a private shareholder to receive company information ahead of other company owners.

The agreement allowed Mr Packer to request information without a log being kept of what was disclosed.

Mr Mitchell said he saw nothing wrong in supporting the agreement, and said that he never personally shared company information with Mr Packer while he was just a shareholder in the company.

“The main thing that Mr Packer and I talked about, in the years that followed, was how to keep your weight down,” he said.

Mr Mitchell said that Crown would transition away from the services agreement with CPH.

David Swan 2.36pm: ACCC backs France’s directive for Google

Australia‘s competition tsar Rod Sims has welcomed France’s move to order Google to negotiate with media companies, and says he’s working closely with regulators across the globe, including in France, as Australia moves towards a mandatory media bargaining code.

On Thursday night a Paris appeals court upheld an order for Google to negotiate with media groups in a long-running dispute about revenues from online news.

The French skirmish closely echoes the fiery battle playing out between media companies and Facebook and Google in Australia, over to what extent tech giants should compensate media companies for news.

Read more: ACCC welcomes France Google move

Lachlan Moffet Gray 2.20pm: Mitchell quizzed on 60 Minutes expose

The inquiry has resumed and counsel assisting Scott Aspinall is asking Mr Mitchell about an ASX statement and full-page newspaper advertisement rebutting the components of a Nine Media expose on the company in July 2019.

Mr Mitchell agreed with Mr Aspinall’s statement that the advertisement contained many inaccuracies in terms of statements about Crown’s ongoing relationships with junkets.

He said he watched the 60 Minutes report on Crown, but only “scanned” the follow up articles in Nine’s newspapers.

“It’s a bad habit of mine I have to say Mr Aspinall, but I often do that,” Mr Mitchell said.

Mr Aspinall raised comments Mr Mitchell made last year which inferred that the article lacked objectivity and was sensationalised, but Mr Mitchell denied that he was implying the report lacked truth, only that the media was generally guilty of sensationalising stories.

Mr Mitchell said he was involved in the decision to publish the advertisement “in the end, not in the beginning” but said he did not approve that the language used in the letter being called “strong.”

“I don’t like strong language, I have to say...assertive language, where it has to be so, i’m ok that,” he said.

Mr Mitchell said he signed off on the advertisement based on information in a Crown internal report.

Commissioner Patricia Bergin asked Mr Mitchell when he became aware of the inaccuracies in the advertisement.

“Only more recently and probably as a result of this inquiry,” he said.

1.44pm: Banks rebound on FSR comments

The S&P/ASX 200 turned up slightly in early afternoon trading as the financials sector rose 0.2pc after an early fall and two of four major banks turned up after early falls.

The index is now back on track for a fifth-day of gains, its first since a 7-day run ending June 10.

Westpac leads the banks with a 0.7pc rise while NAB is the laggard down 0.4pc.

It comes after the RBA’s Financial Stability Review said that while risks to the financial system would be “exacerbated by a weaker-than-expected economic recovery”, like “further setbacks on the health front or international political tensions”, stress tests of the Australian banking system indicate that banks would remain above their minimum capital requirements “even if the economic contraction is substantially more severe than expected”.

“Given their strong balance sheets, banks will be well placed to continue lending, supporting the economic recovery and so in turn the Australian financial system,” the RBA said.

Banks have driven much of a 5.5pc rise in the ASX200 this week amid supportive measures in the budget.

1.40pm: Nova Minerals touts addional ounces in latest project

Gold miner Nova Minerals has lifted in Friday’s trade after the company said growth had continued at its Estelle Gold Project in Alaska, with encouraging mineralisation opening up a new area within the project.

“As we have repeatedly stated, our next corporate goal was to add significant tonnes and ounces in this current drill program and we strongly believe this will be achieved and eclipsed during the rest of 2020 and into 2021,” said chief executive Christopher Gerteisen in a statement to the market.

Nova Minerals last up 3 per cent at 1c.

1.23pm: China services activity picks up

A private gauge of China’s services-sector activity expanded at a faster pace in September, buoyed by strong domestic demand amid a continued economic recovery at the end of third quarter.

The Caixin China services purchasing managers index rose to 54.8 in September from 54.0 in August, Caixin Media Co. and research firm Markit said.

It was the fifth straight month the index stayed above the 50 mark that separates expansion from contraction. The rate of expansion was also the sharpest in three months, Caixin said.

The reading was supported mainly by continued solid demand in Chinese markets, while export orders contracted further last month, according to respondents surveyed by Caixin.

Dow Jones Newswires

Lachlan Moffet Gray 1.05pm: Crown diligence ‘not good enough’

Counsel assisting Scott Aspinall is now asking Harold Mitchell about specific junket operators and their relationship with Crown executives, showing proof of Barry Felstead having met with a controversial junket operator named Zhou Qiyun.

Mr Aspinall asked Mr Mitchell if he thought Crown’s level of diligence regarding who they went into business with was insufficient.

“Absolutely sir, not good enough, absolutely sir,” Mr Mitchell said.

Mr Aspinall is now displaying an email that was discussed yesterday where Crown staff in China referenced a customer having “underground network” connections, as well as certain adverse outcomes that may occur if money is not deposited on the customer’s behalf.

“On the face of what we are looking at here, it probably shouldn’t have happened,” Mr Mitchell said.

“Well this looks a strange set of circumstances, I have to say...the general position of where all of this goes, you believe it just shouldn’t be happening.”

Mr Aspinall asked if the event not being reported indicated a failure in Crown’s culture.

“Hopefully not the whole culture, but certainly the system,” Mr Mitchell replied

As a manager called Roland Theiler was involved in the email chain, and Mr Aspinall is again asking whether the executive remuneration structure encouraged Crown bosses to overlook such incidents to maintain their bonuses.

Mr Mitchell denied this, and said he did not think a remuneration structure that paid people for doing the right thing would necessarily be the right way to organize a company, saying he hoped the company culture would compel people to act truthfully.

Counsel assisting Scott Aspinall is now asking Mr Mitchell about Southbank and Riverbank pty ltds, two subsidiaries of Crown allegedly linked to money laundering activity.

Accounts linked to the companies were closed by HSBC in 2013 during a company wide crackdown on accounts linked to suspicious activity, but Crown at the time opened new accounts with the companies at Commonwealth Bank.

Mr Aspinall is showing transaction details for accounts linked to the companies in 2014 where multiple $10,000 cash deposits were made over the course of several days, as well as other, higher-value deposits.

Mr Aspinall asked Mr Mitchell if he was aware $10,000 was the limit above which cash deposits have to be disclosed to the financial crimes regulator. Mr Mitchell said he did.

When asked if issues relating to these accounts were ever raised at board level, Mr Mitchell said: “No, I don’t remember it being raised at board level.”

After an article last year was released discussing the accounts, Mr Mitchell said he did not raise the issue at board as he assumed it was being handled by Crown executives.

The inquiry has been adjourned until shortly before 2pm.

Lachlan Moffet Gray 12.34pm: We will consider action if needed: Berejiklian

At the NSW gaming inquiry, counsel assisting Scott Aspinall is now asking Harold Mitchell about evidence given by Ben Brazil on Thursday, namely that there was “pushback” to his suggestion that the board establish culpability for the arrest of Crown staff in China in 2016.

Mr Mitchell said he didn’t recall this happening

“I didn’t hear him banging the table,” Mr Mitchell said in reference to what Mr Brazil claimed he did during a board meeting in the aftermath of the event.

After Patricia Bergin informed him this comment was metaphorical, Mr Mitchell said:

“Oh, he was up the other end of the room from me anyway, I thought he may have and I didn’t hear it.”

Mr Aspinall pivoted to the topic of junkets, asking Mr Mitchell when he became aware of what the term referred to.

“I think for me, probably from about 2015-16 onwards but it only grew in a greater awareness particularly in the last year or two,” Mr Mitchell said.

Meanwhile, NSW Premier Gladys Berejiklian has been asked whether she will allow the Crown Barangaroo casino to open in December before the inquiry makes its recommendation to the government. “There’s a formal process there, and I need to let that formal process take its course,” she said.

“If the state government needs to consider any action, we will.”

12.24pm: ASX flat at lunch

Australia’s share market was almost flat at 6095 early Friday afternoon after reversing an early rise of 0.3pc.

While a fall today would end a four-day winning streak, S&P 500 futures are up 0.4pc, pointing to further gains on Wall Street.

Bank shares bottomed after the RBA’s Financial Stability Review said they would stay well capitalized “even if the economic contraction is substantially more severe than expected.”

Market sectors are mixed, with falls in Health Care, Utilities, Real Estate, Financials and Communications offsetting gains in Energy, Materials, Tech, Consumer Discretionary and Staples.

The market appeared to be hit by heavy selling just after 11am. Share trading volume is now 23pc above decent volume.

News that NSW had 5 new locally-transmitted COVID cases in the past 24 hours came as the share market fell toward an intraday low of 6087.6.

Among heavyweights, CSL and NAB were down 1pc while Newcrest and Northern Star were up at least 2pc.

CIMIC was strongest with a 7.4pc rise after a strong trading update.

Harvey Norman was down 3.9pc ex-dividend.

12.15pm: Mitchell ‘had not known’ of staff in China

Turning again to Mr Mitchell’s role on Crown’s remuneration committee, Mr Aspinall is asking how many people’s salaries at Crown are set by the committee.

Mr Mitchell said it was about twenty, but did not have the exact number on hand.

Mr Aspinall asked if Crown’s former head of international marketing Michael Chen was someone who the committee dealt with, but Mr Mitchell said he most likely wasn’t.

Mr Aspinall also asked if executives might have been hesitant to deal with issues they were aware of, such as the risks facing staff in China prior to their arrest, as it may impact their short term remuneration.

Mr Mitchell said this most likely wasn’t the case.

“Well you need to look at how the short term is set, and it’s often linked to the share price. And the share price is rather seperate to all of those matters,” he said.

Turning to Crown’s operations in China, Mr Aspinall asked if Mr Mitchell was aware of that part of the business when he joined the board in 2011.

“No I’d say it seemed a very minor thing in what we were doing,” Mr Mitchell said, although he did become more aware of its significance over time.

“It clearly changed because the size of the market...the size of the Chinese economy changed and it changed so very quickly.”

However, Mr Mitchell said that until the Crown staff in China were detained by the government in October of 2016, he did not directly or indirectly know that Crown had staff in the country.

“I knew we dealt with China obviously...but did we have people there on the ground in offices? No,” he said.

Mr Mitchell said he also did not directly know about the impending crackdown on gambling promoters by the Chinese government that was widely reported in 2015, despite many articles at the time naming Crown-Melco as a company that may be affected by the policy change.

James Packer earlier in the week claimed that he was also not aware of this trend.

12.08pm: Australia’s financial system position, ‘strong’: RBA

Australia’s financial system is up to the task of supporting economic recovery from the coronavirus pandemic, according to the Reserve Bank’s biannual Financial Stability Review.

While acknowledging that “risks are elevated” the Council of Financial Regulators, of which the Bank is a member, maintains that “the Australian financial system is in a strong position”.

Risks would be “exacerbated by a weaker-than-expected economic recovery”, for example stemming from further setbacks on the health front or international political tensions, the RBA cautions.

However, stress tests show the banks would remain above their minimum capital requirements even if the economic contraction is substantially more severe than expected.

Amid large fiscal stimulus payments, loan repayment deferrals and the early release of funds from superannuation, household finances have been cushioned from the impact of the pandemic by support measures, with overall household income rising and savings surging despite the sharp decline in output and falling employment in the first half of the year.

Support measures, in conjunction with temporary insolvency relief, have seen increased cash buffers and lower rates of business failures this year, and the continued availability of equity and debt funding has enabled large businesses to shore-up their balance sheets.

11.50am: JobKeeper saved 4,600 businesses: RBA

The introduction of the $100bn JobKeeper wage subsidy program through the Covid pandemic is estimated to have reduced business failures by around 4,600 firms in financial year 2020, according to Reserve Bank figures.

Assuming that JobKeeper and other policy stimulus is tapered in line with current announcements, a further 6,600 firms are estimated to be saved in financial year 2021, relative to no policy response, the Reserve Bank says in its latest Stability Review released Friday.

“The decline in revenue to date would have been larger in the absence of the policy response, and so likely understates the effect of the COVID-19 pandemic,” the Reserve Bank said.

The central bank said firms in the accommodation and food services, arts and recreation services, and other services industries were proportionally more likely to receive the JobKeeper wage subsidy.

Even so, assuming no economic recovery in revenue in financial year 2021, the model estimates a further 5,200 additional firms would fail, relative to normal times.

11.59am: Mitchell takes the stand in Crown inquiry

Longtime Crown non-executive director Harold Mitchell has taken the stand at the Crown enquiry, swearing an oath on the Bible and appearing in front of a Zoom filter background of bookcases.

Counsel assisting Scott Aspinall will be asking him questions this morning after a long afternoon on Thursday spent questioning former Crown board member and Packer confidant Ben Brazil.

Mr Aspinall began by asking how Mr Mitchell came to be appointed to the board in February of 2011.

“I was invited to be a director by the chairman at the time, Mr James Packer,” Mr Mitchell said.

“It was as simple as that - it was a telephone call, a discussion, a meeting of course...then it took place.”

Mr Aspinall proceeded to ask Mr Mitchell questions about his involvement with Crown’s remuneration and nomination committee, of which Mr Mitchell is a member, and the process by which new board members are appointed.

He also asked if Mr Mitchell had any experience with anti-money-laundering practices at the time of his appointment.

“No, I have to be honest and say not at the time,” Mr Mitchell said.

Commissioner Patricia Bergin also established Mr Mitchell has been a member of Crown’s corporate social responsibility committee since 2013, which he says looks after Crown’s policies in regards to first nations peoples and members of the LGBTQ community.

Counsel assisting Scott Scott Aspinall is now asking a similar line of questions to what he asked Ben Brazil on Thursday, asking Harold Mitchell if he received training on the regulation regime governing casinos when appointed to the board.

“Not specifically, I have to say, that developed over a period of time,” Mr Mitchell said, adding that the company did now train directors in anti-money laundering practices.

Mr Mitchell said that Crown’s anti money laundering training, which he scored a perfect score on, was completed within the last month and took between half and hour and an hour.

Mr Aspinall asked Mr Mitchell if at the time of his appointment he was generally aware of the potential links between casinos and organised crime.

“No, i’d have to say I wasn’t. I wasn’t aware of that,” Mr Mitchell said, although he told Commissioner Patricia Bergin that he became aware of that.

“Only more recently I imagine, the events of right now of course, your own commission, but more generally in the last four or five years I guess - but not deeply,” he said.

Mr Aspinall asked Mr Mitchell if he thought current Crown directors should be put through induction training.

“I’d think Mr Aspinall to be continually updated...in a formal sense, it would make sense to do that,” he said.

Mr Mitchell said he was broadly aware of the Casino control acts in jurisdictions across the country, but had never read the acts or asked to be educated about their specific contents.

He said a course on the subject matter would be useful to directors.

“I think it would help, I’d have to say,” he said.

11.47am: Tokyo stocks open higher

Tokyo stocks opened higher on Friday, extending rallies on Wall Street on revived hopes for US stimulus, and helped by a cheap yen against the dollar.

The benchmark Nikkei 225 index was up 0.22 per cent or 52.49 points at 23,699.56 in early trade, while the broader Topix index gained 0.02 per cent or 0.32 points to 1,655.79.

AFP

11.33am: Home loans jump in August

Total new housing finance commitments jumped 12.6 per cent in August, seasonally adjusted, according to the Australian Bureau of Statistics.

Owner-occupier lending was up 13.6 per cent, and investor loans rose 9.3 per cent.

11.11am: ASX dips into the red

News of five new locally-transmitted COVID cases in NSW saw Australia’s S&P/ASX 200 share index dipped 0.1pc to an intraday low of 6096.3.

The market seemed to be bracing for this announcement after shying off an early high of 6123.8.

Now that it’s out of the way, the focus may shift back to the improving US share market.

S&P 500 futures are currently up about 0.5pc, pointing to another strong night on Wall Street.

Lachlan Moffet Gray 11.05am: Mitchell fronts Crown inquiry

The NSW Independent Liquor and Gaming Authority’s inquiry into the worthiness of Crown Resorts to hold a casino licence will soon be underway with notable media buyer and current Crown board member Harold Mitchell in the witness box.

Mr Mitchell’s appearance comes just months after the federal court ruled that he breached his duties on three occasions as a Tennis Australia director in relation to his negotiations with Channel 7 over tennis television rights. Mitchell avoided a penalty ban on serving as a company director.

Crown director Harold Mitchell. Picture Stefan Postles

His time on the stand will be followed by an appearance by fellow Crown board member and ex-AFL boss, Andrew Demetriou.

The recommendations of inquiry Commissioner Patricia Bergin will weigh heavily on the NSW government’s decision to either revoke Crown’s Barangaroo casino’s license, or to impose conditions on it.

Over the past three days the inquiry has heard mainly from James Packer and has focused on the extent of his knowledge of the organised crime risk surrounding the use of “junket” gambling promoters and about the events leading up to the 2016 arrest of 19 Crown employees in China.

Although Mr Packer levied much of the blame on Crown executives, he offered multiple mea culpas and even told Ms Bergin that he would sell down his stake in Crown if she recommended he do so.

Robyn Ironside 11.02am: Qantas adds new regional route

Qantas is adding Merimbula on the New South Wales south coast to its network as part of the airline’s efforts to stimulate travel demand in the COVID crisis.

The QantasLink flights on 50-seat Q300 turboprops will operate four times a week from December 18, adding more than 400 seats to the route each week.

With border restrictions fuelling demand for intrastate travel, QantasLink CEO John Gissing said they saw an opportunity to bring more tourists to Merimbula.

“This will be the first time that the flying kangaroo has flown to the Sapphire Coast, which will mean more competitive fares on a route that has been a monopoly for decades,” Mr Gissing said.

“We’ll be promoting Merimbula to millions of our frequent flyers across the state in the lead up the flights commencing.”

Qantas last up 1.1 per cent at $4.32.

Read more: Qantas challenges Rex on NSW south coast route

10.45am: Fiscal stimulus favours value: MS

Morgan Stanley’s Antony Conte says fiscal stimulus from the budget should see value stocks to build on their September run with banks, REITS, utilities and builders likey to be standouts.

“The additional fiscal stimulus announced at the federal budget for shovel-ready infrastructure projects and support for business investment is a positive for value orientated stocks,” he says.

Within the builders, he says Adbri and Downer are well positioned to benefit from the small-medium size projects, while Transurban, Aurizon and Qube logistics stand to gain from new road and infrastructure projects.

“Banks will benefit from business investment, housing market and employment support,” Mr Conte says.

“The Home Loan Deposit Scheme will provide a boost for Stockland and Mirvac.”

He also says the generous new depreciation allowance for businesses with turnover up to $5 billion will “add some incentive to mid-small caps stocks to invest.”

Potential beneficiaries include Transurban, Spark Infrastructure, Crown, NEXTDC, Sydney Airport, Nearmap, WiseTech, Beach Energy, Saracen Mineral, Oz Minerals, Regis Resources, and Oil Search.

10.33am: Trump has ‘completed Covid therapy’

President Trump’s recovery continued to progress as he completed his therapy for the coronavirus infection, White House physician Sean Conley said in a memo.

Dr. Conley said he anticipates that Mr. Trump would be able to hold public events again by Saturday.

“Overall he’s responded extremely well to treatment, without evidence on examination of adverse therapeutic effects, “ Dr. Conley wrote, adding that “Saturday will be day 10 since Thursday’s diagnosis, and based on the trajectory of advanced diagnostics the team has been conducting, I fully anticipate the president’s safe return to public engagement at that time.”

Dr. Conley has remained optimistic about Mr. Trump’s recovery since the president was hospitalized on Friday after being given supplemental oxygen at the White House.

His blood oxygen level dropped Saturday and he was taking a steroid typically prescribed to Covid-19 patients who are seriously ill.

Mr. Trump made a theatrical return to the White House on Monday and on Wednesday credited an experimental drug cocktail from Regeneron as a key to his recovery.

Dow Jones

10.25am : Stocks flat after opening jump

A solid rise in US stock index futures added to positive leads for Australian shares from Wall Street.

The S&P/ASX 200 rose 0.3pc to 6120 in early trading as S&P 500 futures rose 0.5pc.

But it fell back to the unchanged mark, perhaps on weekend profit-taking after rising 5.4pc in 4 days.

Energy is the strongest sector with Santos up 2.4pc after WTI crude rose 3.1pc overnight.

Gold miners are leading the materials sector with Northern Star up 2.2pc and Newcest up 1pc.

Banks are mixed after strong gains this week as the budget lessened economic risk.

Real Estate is bouncing back from Thursday’s underperformance with Mirvac up 1.8pc.

CIMIC is up 4.2pc after a strong 9-month trading update.

10.11am: Afterpay prospects remain strong: Macquarie

Afterpay’s near-term prospects “remain strong” after Sezzle’s 2Q trading update confirmed strong momentum in the buy-now-pay-later sector in the US, according to Macquarie.

The broker sees Afterpay’s gross merchandise value doubling to $22bn in FY21 and net transaction margin holding above 2pc from 2.25pc in FY20.

“The December quarter is seasonally strong for Afterpay, with increasing network effects to drive momentum with the launch of US in store, Afterpay’s loyalty program and recent entry into Canada all contributing,” Maquarie says.

But while noting that Afterpay is scaling well, Macquarie keeps a Neutral rating and $90 price target.

“Ultimately, we believe it needs to convert this leadership into a sustainable, scaled position across key markets,” it says.

Still, Afterpay has discussed areas of competitive advantage that it can establish, including scale, brand/loyalty, marketing/lead-generation capability, global reach, cost efficiencies/partnerships, risk management and adjacencies.

Afterpay shares are up 2.1pc at $88.90 early Friday to be up 11.3pc this week.

9.55am: What’s impressing analysts?

Bank of Queensland cut to Hold: Morningstar

Bapcor cut to Sell: Morningstar

Challenger raised to positive: Evans & Partners

Elmo Software raised to Outperform: RBC

Netwealth raised to Neutral: Macquarie

Transurban cut to Neutral: Macquarie

ARB raised to Neutral: Citi

Ben Wilmot 9.50am: Charter Hall in Brisbane hospital deal

Acquisitive property funds manager Charter Hall has swooped on a Brisbane hospital headquarters in a $122.5m deal that signals its desire to push further into health property.

The $43bn funds manager already has major office, industrial and convenience retail holdings and has more recently forged into petrol stations, agriculture and pub assets.

The listed Charter Hall Social Infrastructure REIT said it bought 14 Stratton Street in Newstead, Queensland, via a sale and leaseback transaction with Mater Misericordiae.

Mater is Queensland’s largest Catholic, not-for-profit health provider, owning and operating an extensive network of hospitals, health centres and a world-class research institute and gross assets of over $1bn.

The purchase price reflects a passing yield of 4.84 per cent, with fixed annual rental increases of 3 per cent. The property is underpinned by a new 10-year lease to Mater with two 5-year options.

The building is under construction with settlement to occur following practical completion, expected to be in the June 2021 quarter. It will comprise an A-grade, 11-storey building with 5-star NABERs rating.

The building will be the new corporate headquarters for Mater, as well as offering healthcare training facilities. The building will be fitted out by Mater and is near their existing hospital and training campus in South Brisbane.

Charter Hall managing director David Harrison said the company had established a relationship with Mater as a major tenant within its growing social infrastructure portfolio.

“We have invested in this near Brisbane CBD location for a decade having developed the $230m headquarters for Aurizon at 900 Ann Street, Fortitude Valley and the $240, Bank of Queensland anchored office project at Newstead nearby,” he said.

The deal was negotiated in a closed, off market campaign, facilitated and managed by Peter Court and Mike Walsh of Cushman & Wakefield.

9.45am: Stocks tipped for positive start

Australia’s share market should rise for a fifthconsecutive day.

Overnight futures relative to value suggest the S&P/ASX 200 will open up 0.1pc at 6108.

If sustained, this will be first five-day rise in the index since a 7-day run up to a peak near 6200 in early June.

S&P 500 futures are up 0.2pc in early Asian trading, giving upside risk.

On Wall Street, breaks of resistance levels from mid-September highs are very encouraging.

It comes amid strong chance of a Democrat “blue wave” heading off potential domestic conflict and leading to massive fiscal stimulus.

After President Trump’s fiscal policy backflips and the Vice Presidential debate, Joe Biden’s lead in the Real Clear Politics average of betting odds hit a new high of 29.5 points.

Some unwinding of the recent extreme risk aversion associated with the prospect of a contested election outcome now favours risk assets.

If the VIX falls toward 20pc on a break of its 50-day moving average at 25.5pc, it would allow risk parity investors to put more into equities.

Of course there is potential for renewed jitters in coming weeks since Trump won against much worse odds in 2016.

But there’s also renewed hope of imminent fiscal stimulus after House Speaker Pelosi told Bloomberg that after speaking to Treasury Secretary Mnuchin she drew the “inference” that the Treasury secretary was interested in broader stimulus talks and the two are expected to continue to talk on Thursday.

And President Trump told Fox Business that talks on an economic stimulus plan are now “starting to work out.”

On the S&P/ASX 200 a double-bottom pattern continues to target 6200 on the S&P/ASX 200 with strong support now from the 200-day moving average at 6019.

Energy the ASX should lead after the S&P 500 Energy sector rose 3.8pc as WT crude rose 3.1pc to $US41.19 as Hurricane Delta forced operators to shut nearly 92pc of crude output in the Gulf of Mexico.

Banks may remain the driving force though after Australia’s world-leading fiscal stimulus announced this week.

NSW coronavirus numbers may cause a setback for the local market if the latest outbreak spirals out of control.

9.40am: US stimulus talks resume

Democratic and White House negotiators resumed discussions over a sweeping coronavirus relief deal, but gave no indication they were closer to a breakthrough in resolving deep-seated disputes that led President Trump to end the negotiations earlier this week.

Few on Capitol Hill were optimistic that Congress and the White House would reach an agreement before the November 3 election. Still, negotiations that had been frozen showed signs of life after House Speaker Nancy Pelosi ruled out moving forward with special support for the battered airline industry without a broader agreement.

In a call Thursday afternoon (US time), Treasury Secretary Steven Mnuchin made clear that Mr. Trump was interested in reaching an agreement on a broader bill, according to Mrs. Pelosi’s spokesman, Drew Hammill, and an administration official.

US Treasury Secretary Steve Mnuchin. Picture: AFP

The White House has gone back and forth on how broad a deal to pursue. After ruling out more talks Tuesday afternoon, Mr. Trump said Tuesday evening and reiterated in recent days that he would support individual relief bills, including aid for airlines and another round of direct checks.

“I shut down talks two days ago because they weren’t working out. Now they’re starting to work out,” Mr. Trump said Thursday on Fox Business Network. “We’re talking about airlines and we’re talking about a bigger deal than airlines,” he said, mentioning $US1200 stimulus checks as well as unspecified other items.

The two sides have been at odds both over how much money to spend, as well as how to allocate it. Democrats last week passed a $US2.2 trillion bill, down from a $US3.5 trillion bill passed in May, while Mr. Mnuchin had last week proposed a $US1.6 trillion offer.

Dow Jones

9.12am: CIMIC reports recovery ‘momentum’

Construction and engineering services provider CIMIC has touted improved operating conditions ahead on the back of numerous stimulus packages, as the company declared revenue of $9.3bn for the first nine months of the year, down slightly on $10.7bn the same period a year ago.

Net profit after tax for the period was $474m.

“We are seeing improved operating conditions, which is providing momentum as we enter the last quarter of the year,” chairman Marcelino Fernández Verdes said.

“Looking ahead, infrastructure investment will be a valuable contributor to the economic recovery from COVID-19 and we are encouraged by the substantial investment programs in the regions where we operate.

“Our focus on digitalisation and innovation is increasingly important, supporting better risk sharing, delivering efficiency and improving safety and sustainability outcomes.”

8.52am: Gilead says drug speeds up COVID-19 recovery

Gilead Sciences said a late-stage study of its experimental COVID-19 treatment showed it shortened time to recovery. The company said a study of remdesivir, which goes by the trade name Veklury, plus standard of care shortened the time of recovery by an average four days, compared with a placebo and standard of care.

Patients were also 50pc more likely to have recovered 15 days after treatment compared to those given a placebo, the company said. Results of the study were published in The New England Journal of Medicine.

Remdesivir was reportedly one of the medications recently prescribed to President Donald Trump for his COVID-19 infection. Gilead shares were up 0.5pc after hours.

A vial of the drug remdesivir. Picture: AFP

Dow Jones

8.27am: Newcrest approvals at Cadia, Lihir

Newcrest Mining said it has approved capital projects worth $236 million, including stage two of the expansion of its Cadia mine in NSW.

Australia’s largest gold miner by market capitalization on Friday said its board has approved the addition of equipment to one of the concentrators and upgrades to another at Cadia. Newcrest expects the project to increase life-of-mine gold recoveries by 3.5 per cent and copper recoveries by 2.7 per cent, while reducing all-in-sustaining-cost by an estimated $22 per ounce.

The Cadia expansion will cost $175 million, compared with a previous estimate of $180 million, Newcrest said in a filing to the Australian Securities Exchange.

The firm said it will also spend $61 million to improve grinding classification and reduce gold losses through the flotation circuit at its Lihir operation in Papua New Guinea. Gold recoveries are projected to rise by 1.2 per cent over the life of the mine, Newcrest said.

Dow Jones Newswires

7.10am: ASX poised to edge up at open

Australian stocks were set for a modest opening gain, as Wall Street rose on growing hopes of a new US stimulus package.

At around 7.00am (AEDT) the SPI futures index was up 12 points, or 0.2 per cent.

Yesterday, the ASX 200 closed up 1 per cent as the index posted its first four-day gain since early July.

The Australian dollar was higher at US71.64.

Global oil benchmark Brent crude added 3.2 per cent to $US43.34 a barrel.

7.10am: US stocks end higher

Wall Street edged higher as investors showed cautious optimism that Congress will reach an agreement on fiscal stimulus measures aimed at parts of the economy.

The S&P 500 rose 0.8 per cent as of the close of trading, extending the broad-market index’s rally into a second day. The Dow industrials added 0.4 per cent and the tech-heavy Nasdaq Composite advanced 0.5 per cent.

The S&P 500 climbed Wednesday to its highest close in over a month after President Trump tweeted his support for individual spending packages aimed at small business, airlines and delivering checks to households.

“It’s still all about stimulus at this point: we’re seeing markets move on optimism that some kind of package is going to get done,” said Esty Dwek, head of global market strategy at Natixis Investment Managers. “It’s just a question of how much the Republicans will agree to.”

Discussions appear to remain ongoing, though Republicans and Democrats remain at odds over crucial details. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke briefly Wednesday about a stand-alone stimulus bill for the airline industry, sending carriers’ stocks higher. Mrs Pelosi signalled she wouldn’t support such a bill without a broader coronavirus aid package.

Wall Street was encouraged by the prospects of a stimulus deal. Picture: AFP

Applications for jobless benefits last week remained elevated at 840,000, slightly higher than economists’ expectations for 825,000, reflecting a slow pace of recovery in the labor market. This metric remains historically high, despite dropping sharply from a peak of near 7 million in March.

Thursday’s rise was led by energy companies. The S&P 500 energy sector was up 2.4 per cent. Oil prices climbed on the prospect of a boost to U.S. growth, with the global Brent crude benchmark adding 2.7 per cent to $US43.11 a barrel.

Shares of IBM gained 5.9 per cent after it said that it was spinning off its managed infrastructure services unit into a new public company as part of a strategy to build up its cloud computing business.

Regeneron Pharmaceuticals shares rose 1.4 per cent after Mr. Trump said an experimental coronavirus treatment made by the company was key to his recovery. A spokeswoman for the drugmaker on Wednesday said Regeneron has applied to the Food and Drug Administration for emergency-use authorization for its experimental treatment.

The pan-continental Stoxx Europe 600 rose 0.8 per cent. In Asia, most major benchmark stock indexes gained. Hong Kong’s Hang Seng Index was an exception, slipping 0.2 per cent. That followed reports that the Trump administration is discussing potential curbs to digital payments platforms developed by Chinese tech companies Tencent Holdings and Ant Group on the grounds of national security. Markets in mainland China remain closed for a holiday.

Dow Jones Newswires

6.20am: WarnerMedia to cut thousands of jobs

AT&T’s WarnerMedia is preparing a restructuring that seeks to reduce costs by as much as 20 per cent as the coronavirus pandemic drains income from movie tickets, cable subscriptions and TV ads, according to people familiar with the matter.

The overhaul, which is expected to begin in the coming weeks, would result in thousands of layoffs across Warner Bros. studios and TV channels like HBO, TBS and TNT, the people said.

Rivals including Walt Disney Co. and Comcast Corp.’s NBCUniversal have also cut jobs in recent months as the film and TV business struggles.

“Like the rest of the entertainment industry, we have not been immune to the significant impact of the pandemic,” a WarnerMedia spokesman said, adding that the company would reorder its operations to focus on growth opportunities. “We are in the midst of that process and it will involve increased investments in priority areas and, unfortunately, reductions in others.”

This is the second wave of substantial cuts at the company, after WarnerMedia eliminated more than 500 jobs at Warner Bros. in August.

Dow Jones

5.45am: Wall Street up on stimulus hopes

US stocks rose as investors showed cautious optimism that Congress will reach an agreement on fiscal stimulus measures aimed at parts of the economy.

With just over an hour of trade remaining, the S&P 500 was up 0.7 per cent, extending the broad-market index’s rally into a second day. The Dow industrials climbed 0.3 per cent and the tech-heavy Nasdaq Composite advanced 0.4 per cent.

Applications for jobless benefits last week remained elevated at 840,000, slightly higher than economists’ expectations for 825,000, reflecting a slow pace of recovery in the labour market. This metric remains historically high, despite dropping sharply from a peak of near seven million in March.

“These are still high in the grand scheme of things. They’ve stabilised over the course of the last few months, but they’re also not really going down,” said Peter Dixon, an economist at Commerzbank. That will likely put additional pressure on Congress to agree on a package of coronavirus-relief measures, he said.

The S&P 500 climbed yesterday to its highest close in over a month after President Trump tweeted his support for individual spending packages aimed at small business, airlines and delivering checks to households.

“It’s still all about stimulus at this point: we’re seeing markets move on optimism that some kind of package is going to get done,” said Esty Dwek, head of global market strategy at Natixis Investment Managers. “It’s just a question of how much the Republicans will agree to.”

Discussions appear to remain ongoing, though Republicans and Democrats remain at odds over crucial details. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke briefly Wednesday about a stand-alone stimulus bill for the airline industry, sending carriers’ stocks higher. On Thursday, Mrs. Pelosi signalled she wouldn’t support such a bill without a broader coronavirus aid package.

Meanwhile, the market’s continued rise has made some investors nervous that speculative buying has pushed stocks to expensive levels, putting them at risk for a reversal even if the economy continues to improve.

“We spend half our time right now telling people how dangerous things are,” said Cole Smead, president and portfolio manager at Smead Capital Management, a value-investing firm.

The overnight rise was led by energy companies. The S&P 500 energy sector was up over 2 per cent. Oil prices climbed on the prospect of a boost to U.S. growth, with global benchmark Brent crude adding 2.1 per cent to $US42.87 a barrel.

Shares of IBM gained roughly 5.9 per cent after it said that it was spinning off its managed infrastructure services unit into a new public company as part of a strategy to build up its cloud computing business.

Regeneron Pharmaceuticals shares rose 2.5 per cent after Mr. Trump said an experimental coronavirus treatment made by the company was key to his recovery. A spokeswoman for the drugmaker said Regeneron has applied to the Food and Drug Administration for emergency-use authorisation for its experimental treatment. Shares of Eli Lilly, another drugmaker mentioned by the president in a Wednesday evening video posted on Twitter, climbed 2.1%.

The pan-continental Stoxx Europe 600 rose 0.8 per cent.

Dow Jones Newswires

5.27am: Oil ticks higher

Oil prices rose above $US40 again, as supplies have continued to be hamstrung by several factors, including an extended strike by oil workers in Norway.

Brent crude futures, the international benchmark, rose 2.1pc to $US42.88. West Texas Intermediate futures rose 2.1pc to $US40.78.

Oil prices have been stymied by demand troubles. Covid-19 isn’t under control in much of the world, including in the US and Europe, so less oil is being used for airplane flights and driving. Until that changes, the price of both Brent and WTI will likely stay below $US50 a barrel. It doesn’t help that Congress might not pass a stimulus bill to bail out ailing airlines.

That said, shifts in oil supply are still important and can drive shorter-term moves. For one thing, a hurricane over the Gulf of Mexico has forced production to slow down in the area.

Dow Jones

5.10am: Markets firmer on hopes for US stimulus

Stock markets were firmer, with investors increasingly confident Joe Biden and the Democratic Party will win the US presidency and both houses of Congress, paving the way for a huge new coronavirus stimulus package, analysts said.

In early afternoon trade, the Dow was up 0.2 per cent.

Australian stocks were tipped to open flat.

The gains came against the backdrop of sharply rising coronavirus case numbers in Europe, with top economy Germany warning that the pandemic could get out of control as governments tightened restrictions.

The focus however was on the United States after President Donald Trump’s decision to break off talks for a second rescue package gave global traders a massive jolt on Tuesday.

He then appeared to change tack again, making a call for targeted help -- including $US1200 handouts for Americans and help for small businesses -- which lifted hopes.

In his latest comments on Thursday, Trump said there was a “really good chance” of getting a deal with the Democrats.

“The market realises that whoever wins (the election), more than likely Biden now, there is going to be significant stimulus and additional infrastructure spending,” said Andy Brenner, head of international fixed income at National Alliance.

The New York markets made substantial gains of close to two per cent on Wednesday, ensuring Asia got off to a good start on Thursday and with Europe following suit.

London closed up 0.5 per cent, Frankfurt added 0.9 per cent and Paris rose 0.6 per cent.

Brent crude was up 2.0 per cent at $US42.97 per barrel.

AFP

5.12am: Pelosi ties airlines aid to broader stimulus bill

House Speaker Nancy Pelosi signalled she wouldn’t support a stand-alone airline relief bill without a broader coronavirus aid package, the latest twist in late efforts to pass more economic aid before the election.

Mrs. Pelosi and Treasury Secretary Steven Mnuchin were expected to talk Thursday about potential aid for airlines, which are planning deep job cuts as travel spending remains depressed due to the coronavirus pandemic.

“There is not going to be any stand-alone bill unless there is a bigger bill and it can be part of that, or it could be in addition to it,” Mrs. Pelosi said of the airline aid, in remarks to reporters.

Earlier this week, President Trump ended broader negotiations between Mrs. Pelosi and Mr. Mnuchin over a multi-trillion-dollar relief package and began a push to instead pass individual relief bills, including aid for airlines and another round of direct checks to many US households.

“I shut down talks two days ago because they weren’t working out. Now they’re starting to work out,” Mr. Trump said Thursday on Fox Business Network. “We’re talking about airlines, and we’re talking about a bigger deal than airlines,” he said, mentioning the $US1200 stimulus checks to taxpayers that both parties have said they support.

Mrs. Pelosi said Thursday that Democrats were open to further talks on a broader deal, but there were few indications that such an agreement could be reached before Election Day.

Speaker of the House, Nancy Pelosi. Picture: AFP

Dow Jones

5.07am: McDonald’s US sales recover

McDonald’s reported a jump in US comparable sales in the third quarter, offsetting declines in international markets amid strong demand for affordable food options in a weakened economy.

The fast-food giant said the US business benefited from larger group orders and improved dinner sales that made up for a drop in the number of customers.

McDonald’s also announced it was boosting its dividend.

The chain has said its US business was comparatively well positioned for the coronavirus pandemic because many of the restaurants have drive-through and pick-up services, even if dining rooms are closed.

The company also have emphasised the affordability of its offerings amid elevated joblessness.

Global comparable sales declined 2.2 per cent due to weakness in several large overseas markets, where sales dropped in China, in bigger European markets including France and Germany and in Latin America.

But sales were strong in Australia and Japan.

(McDonald's has reported a jump in US comparable sales in the third quarter. Picture: AFP

AFP

5.05am: IBM reorganises to focus on cloud computing

IBM has unveiled a corporate reorganisation to allow it to focus on cloud computing, spinning off its division for managed infrastructure.

The move will create two separate, publicly traded firms by the end of 2021, according to the US computing giant.

“IBM is laser-focused on the $US1 trillion hybrid cloud opportunity,” said IBM chief executive Arvind Krishna.

“Now is the right time to create two market-leading companies focused on what they do best. IBM will focus on its open hybrid cloud platform and AI capabilities.” The infrastructure firm, he said, “will have greater agility to design, run and modernise the infrastructure of the world’s most important organisations.” The move positions IBM to ramp up competition in cloud computing against rivals such as Amazon, Microsoft and Google.

AFP

5.02am: Morgan Stanley buys Eaton Vance for $US7bn

US financial powerhouse Morgan Stanley said Thursday it would acquire wealth management firm Eaton Vance for about $US7 billion unveiling its second major takeover of 2020.

The transaction, which comes on the heels of a $US13 billion purchase of E-Trade, will bring another $US500 billion in assets under management (AUM) within Morgan Stanley’s umbrella and broaden its standing as a wealth manager, the companies said in a statement.

“Eaton Vance is a perfect fit for Morgan Stanley,” the company’s chief said James P. Gorman said in a statement.

“This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class investment banking and institutional securities franchise.” The statement said there was limited overlap between the firms and highlighted Eaton Vance’s presence in environmental, social and corporate governance (ESG) investing through its Calvert funds.

AFP

5.00am: New US jobless claims almost flat

New applications for US jobless benefits were barely changed last week, the Labor Department said, as the economy continues to struggle in its recovery from the coronavirus shutdowns earlier this year.

There were a 840,000 new claims filed in the week ended October 3, a drop of 9,000 from the previous week’s level, which was revised up to 849,000, according to the seasonally adjusted data.

Another 464,437 people, not seasonally adjusted, filed under a special program implemented amid the pandemic for workers who would not normally qualify for aid, a drop of more than 44,000.

However, the level of new weekly claims has yet to drop below the worst single week of the 2008-2010 global financial crisis, and more than 25.2 million people in the United States were receiving some form of government aid in the week ended September 19, according to the data.

Read more

AFP

4.58am: OPEC doesn’t see peak oil demand, yet

The coronavirus crisis has sparked talk that the world might have reached peak oil demand but the OPEC cartel sees crude consumption continuing to grow during the next quarter century, driven in large part by greater use of cars in developing countries.

In its latest forecasts, OPEC sees surprisingly little long-term impact despite the coronavirus pandemic plunging the global economy and oil demand into a tailspin.

While the pace of economic recovery will dictate how fast oil consumption rebounds, even OPEC’s scenario of a slow healing sees an eventual return to increased demand.

“At the global level, oil demand is expected to increase by almost 10 mbd (million barrels per day) over the long-term, rising from 99.7 mbd in 2019 to... 109.1 mbd in 2045,” the cartel said in its latest World Oil Outlook.

This baseline scenario represents 9.4 per cent growth from pre-coronavirus consumption levels.

Under its slow growth scenario, OPEC expects 5.0 per cent growth in oil demand. And even with fast adoption of green technologies and tougher climate change policies, the cartel still sees a 3.1 per cent increase in consumption.

OPEC’s forecast contrasts with that of some industry players, including major oil firms such as BP, which in its latest long-term estimates predicted that oil demand had already peaked or would soon do so thanks to increased use of renewable energy and the impact of the coronavirus.

AFP

4.55am: UK economy down 7-10pc

Bank of England governor Andrew Bailey said UK economic output in the third quarter was between seven and ten per cent below pre-pandemic levels.

While this was far better than at the start of the pandemic, Bailey warned there was still an unprecedented level of uncertainty and that the risks to the economy are still to the downside.

“We think, in the third quarter, on average, activity in the economy will probably (have been) somewhere between seven and ten per cent below pre-Covid levels,” he said in an online conference.

“And while that number was obviously much better than we had in the spring, it’s still... produced a very big recession.” Recent official data have shown that the UK economy shrank by a fifth in the second quarter which coincided with Britain being in lockdown.

Bailey added that the economy faced the prospect of an “uneven” recovery as the British government battles a second wave of rising infections with tighter restrictions, particularly on the hospitality sector.

AFP

4.50am: French court adds pressure on Google to pay for news

A Paris appeals court has upheld an order for Google to negotiate with media groups in a long-running dispute about revenues from online news.

The ruling came as the US internet giant announced it was close to a deal on compensating French media groups for news shown in Google search results.

Such a deal would represent a climbdown by Google, which has so far refused to comply with new EU rules giving more copyright protection to media firms for news displayed on search engines and social media.

France was the first European country to ratify the law, which could act as a lifeline to newspaper groups grappling with shrinking print sales.

In April, the French competition authority ordered Google to negotiate with the press in good faith -- a ruling it appealed, accusing the authority of overstepping its jurisdiction.

The appeals court sided with the competition authority.

Google argues it should not have to pay to display items produced by news companies since they benefit by receiving millions of visits to their websites.

But in a sign that the Californian company is anxious to do a deal, it announced late Wednesday that it made the French press an offer on copyright.

France is not the only country where Google has come under pressure from the government to share their revenue with local media.

The Australian government has drafted a law to make Facebook and Google pay for news content they use.

Google is under growing pressure to share revenue with local media. AFP

AFP