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S&P/ASX 200 to open higher – stocks to watch

The S&P/ASX 200 (INDEXASX: XJO) is set to open higher on Thursday, building on the positive start to the new financial year. Here’s what you need to know.

Stock market recap

Most global markets started the financial year on a positive note, with the ASX 200 adding 0.6% despite reports that just 30% of jobs lost during the COVID-19 crisis have been replaced.

US markets will provide a positive lead this morning, the NASDAQ pushing to all-time highs, up 0.9%, and the S&P 500 rising 0.5%, with FedEx Corporation (NYSE: FDX) the leader improving 11%. The company announced it had moved through the crisis relatively unscathed with revenue slightly below 2019 as the cancellation of domestic flights meant more packages ended up on FedEx planes.

European markets were generally weaker despite Pfizer (NYSE: PFE) announcing some success in the creation of antibodies from its COVID-19 treatment. PMI, which offer a leading indicator for the economy, improved across the board, with Germany improving to 45 from 36 prior, and France entering expansion again at 52 points. Signs of a return to normal continued, with German retail sales improving 13.9% for the month, however, talk has now moved towards the risk of a no-deal Brexit.

First cabs off the rank

Despite reporting season not expected to begin for several weeks, a number of companies provided interim updates.

Lendlease Group (ASX: LLC) the least surprising after it cancelled the dividend from its operating company, flagging a loss of $230-$340 million, and reported a devaluation in its managed property assets of just $130 million on a $4 billion portfolio. I’d suggest there is a great deal more pain to come due to the company’s large holdings of retail and residential property.

Telstra Corporation Ltd (ASX: TLS) continued its simplification, announcing the sale of its $400 million data centre in Clayton, with the normal players including Charter Hall Group (ASX: CHC) all interested.

Home Consortium Ltd (ASX: HMC) entered a trading halt after announcing a capital raising of $170 million to purchase three Woolworth’s anchored tenancies in addition to an aged care facility. Interestingly, the aged care facility is owned by the company’s own CEO, meaning it will need to be approved by shareholders to ensure sufficient due diligence was completed. HMC’s dividend will go ahead.

Out with the old, in with the new

Webjet Ltd (ASX: WEB) quietly raised a further $136 million in debt via Singapore markets in the form of a convertible note, adding 7.5% despite a worsening outlook as Victoria enters another lockdown.

WiseTech Global Ltd (ASX: WTC) is the target of another short attack, falling 4.1% amid growing concerns of the underlying profitability of the companies acquired as part of its roll-up strategy. I’ve seen this play out before and suggest investors tend to avoid these companies until there is more certainty.

The 2019-20 financial year will be remembered as the time when market capitalisation shifted from old fashioned business models to those of the future. With billions shifting out of energy, banks and property into healthcare, IT and staples businesses, the question for investors is which trend is sustainable.

In my view, IT and communications remain the most important part of portfolios post COVID, as reflected by the top-performing companies in 2020 being Mercado Libre (NASDAQ: MELI) up 101%, Tesla Inc. (NASDAQ: TSLA) up 100%, Nvidia (NASDAQ: NVDA) up 44%, Paypal (NASDAQ: PYPL) up 82%, and Apple Inc. (NASDAQ: AAPL) up 43%. The Australian story was similar, Afterpay Ltd (ASX: APT) adding 143%, and the major banks down 35% on average.

This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

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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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