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DIRECTORS : CHRIS BURRELL ROGER BURREL IAN DAVEY ROBERT CHAN ELAINE ANDERSON MARI ASHTED ALICIA KENDALL GREG VICKERY

ASSOCIATE DIRECTORS : LYNDA MYERS MICHAEL BURRELL

ASSOCIATES : JAMIE ELGAR CHRISTOPHER HAMPTON ERIC HARRISON DYLAN KATZER BRUCE McLEARY SHAUN MINAHAN

INDEPENDENT CHAIRMAN : BERNARD ROWLEY email : clientcare @ burrell . com . au internet : www . burrell . com . au

Up until this week the ASX 200 had remained confined to a sideways pattern since June . Whilst the forward PE is elevated , reflecting the combination of near zero rates and expectations of a recovery ( earnings expectations have risen 5 %+ since the end of August , current subjective evidence on earnings from both the annual general meeting season and key economic indicators are generally positive and the economic indicators consistent with a strong recovery . Themes include :

� strong consumer retail sales ; � rebounding housing activity ( especially in the US );

� strong rebounds in health services ; � weak transport and infrastructure ; and � sluggish credit demand .

With Victoria reopening , and second-round fiscal and monetary stimulus being rolled out , together with improving prospects for a vaccine , the V-shaped earnings recovery prospect is gaining some traction in the market . Firstly turning to the economic indicators .

Economic indicators have been generally soft , consistent with company commentary ( which will be touched on shortly ). Retail sales have been strong , with the September quarter up 8.2 % YoY despite the Victoria lockdown , versus a year ago 2.5 % YoY .

NOVEMBER 2020

Household goods and food have dominated growth , with restaurants and clothing lagging . Consumer confidence has seen an upward surge , with October up 13.2 % YoY , though the three months to October were down 4.3 % YoY , similar to a year ago . The spike since August reflects a successful exit from the COVID second wave and October ’ s highly stimulative and taxcutting budget .

With respect to housing , there are signs of an upturn , with 3Q20 dwelling approvals up 5.8 % YoY , a turnaround from the year ago -25.0% YoY . New Home Sales in 3Q20 surged , up 32.1 % YoY . Owner-occupier finance ex-refinancing in August was up 17.0 % YoY , an acceleration versus the three-month average 8.2 % YoY and a year ago -5.1% YoY . Investor exrefinancing is soft , down 5.2 % YoY , though better than the year ago , -13.0% YoY . CoreLogic prices in the capital cities in the three months to October were up 4.9 % YoY , including a peak to trough decline of 3.0 % during COVID . A year ago , prices were down 4.3 % YoY , suggesting that home prices are stabilising . Turning to business-related indicators , the most recent NAB Business Sentiment survey suggest a recovering phase is developing , with confidence in September recovering to -4, just 1 point below pre-COVID levels and identical with a year ago , but still 0.9 of a standard deviation below average . Likewise , business conditions and trading are back at-or-above pre- COVID and year ago levels , consistent with a rebound in earnings expectations . Capital goods imports appear

Participant of ASX Group and NSX ABN 82 088 958 481 ASFL No 247431