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S&P/ASX 200 (XJO) to open flat – have we hit peak virus?

The S&P/ASX 200 (INDEXASX: XJO) index is expected to open slightly higher today with the Sydney Futures Exchange pointing to a +5 open this morning.

Peak Coronavirus?

It was a mixed day for the ASX to begin the week, opening strongly before giving up gains and finally ending up 1.5% on the outperformance of the information technology and healthcare sectors.

The biggest detractor was an unexpected capital raising and dividend cut from the National Australia Bank Ltd (ASX: NAB) (more on this below). The US has once again provided a strong overnight lead for the Australian market, hitting its highest point since March 10 as more States announced a loosening of restrictions from as early as this Friday. The European Index also rallied over 2.6% as Spain, Italy and France signalled their intention to reopen their economies as COVID-19 deaths slowed. Interestingly, US retail businesses are demanding a uniform reopening policy across the states given the complexity and difficulty that would result.

Hands out again…

The National Australia Bank unexpectedly brought forward their earnings report, announcing a 51% fall in cash profit to ‘just’ $1.44bn and stunning the market with a $3.5 billion capital raising.

The bank is seeking to increase CET 1 capital from 10.4% to 11.2% in order to offset expected increases in bad debts. Management noted that some 70,000 homeowners and 34,000 businesses had taken advantage of the repayment deferral options.

NAB also announced a 60% cut to the interim dividend, dropping to just 30 cents per share, as flagged by the falling share price. The offer will be at a 10% discount to trailing prices of around $14.15 per share. NAB was joined by integrated ports and logistics provider Qube Holdings Ltd (ASX: QUB), whih entered a trading halt as they shore up their own balance sheet.

US reporting season update

The Down Jones traded 1.5% higher overnight driven by positive news in debt markets and continuous support from Government fiscal policy. Walt Disney Co (NYSE: DIS) shares added close to 5% after announcing that it would be releasing the latest Star Wars movie early on Disney+ to capitalise on the shutdowns, whilst Coca-Cola Company (NYSE: KO) bounced 3% as the gradual wind back may release what has been a circa 25% fall in global sales.

Germany’s Deutsche Bank was a rare highlight, announcing on Sunday night that its revenue had remained flat for the March quarter at $6.4 billion whilst taking a $500 million credit provision. Wednesday sees the likes of Google/Alphabet, Caterpillar, Starbucks and Mondelez report in the US, in what will be a real insight into the state of the economy.

The morning update is written by Drew Meredith, Director of Wattle Partners.

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The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.


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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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