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S&P/ASX 200 morning report – MYR, BHP & CBA shares in focus

The S&P/ASX 200 (ASX: XJO) is set to follow a weak lead from overseas markets and open lower on Friday. Here’s what’s making headlines.

ASX 200 holds onto gains

The ASX 200 managed to stave off weakness in the afternoon, finishing 0.5% on Thursday despite a much stronger lead from the US markets. The telecommunications and materials sectors, including the likes of Telstra Corporation Ltd (ASX: TLS) and BHP Group Ltd (ASX: BHP), were the leaders as investors stepped back into the market seeking income.

The Myer Holdings Ltd (ASX: MYR) share price finished 17.6% lower as the true impacts of the economic shutdown became evident. Management led with the headline that online sales had increased 61% but despite this, the company fell to a $172 million full-year loss and wrote down the sale of a number of brand names by close to $100 million. The CEO is among the loudest voices asking for more flexibility from the Victorian Government.

Meanwhile, a number of companies faced the House of Representatives economics committee, with AMP Limited (ASX: AMP) facing a grilling on its culture, the CEO suggesting its issues aren’t endemic and that improvements are being made; shares finished 3.3% higher.

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BHP put its stake in the ground, announcing that 10% of executive bonuses will be linked to the company’s targeted emission reductions; a great start but still a long way to go. The company also announced its coal assets would likely be demerged into a new listed entity, with few outright buyers interested given the current climate.

Both National Australia Bank Ltd (ASX: NAB) and Commonwealth Bank of Australia Ltd (ASX: CBA) announced new no-interest credit cards, creatively titled Straight Up and Neo, as they seek to compete with the likes of PayPal (NASDAQ: PYPL) and Afterpay Ltd (ASX: APT) in offering cheaper credit to consumers.

News that gold miner Resolute Mining Limited (ASX: RSG) had removed its production guidance due to strikes at its African mines reiterated the unique issue of seeking an exposure to gold through operating companies rather than through bullion directly. Resolute shares finished 6% lower.

Tech selloff renewed, BP goes green

Australian investors face another bout of volatility to finish the week, the Nasdaq and S&P 500 finished down 2.0% and 1.5% respectively. The selling pressure was broad-based, with more than 90% of index constituents falling amid another fall in the oil price and US unemployment claims held steady rather than continuing to improve.

Modern Inc. (NASDAQ: MRNA) delivered a rare positive, even as the EU surpassed the US for virus cases as it re-enters hot spot status. It’s becoming clear the economic recovery will not be as swift as expected, particularly without a vaccine, as cases numbers rise amid a return to normal movement of people.

The oil price fell below $37 per barrel once again, sending shares in BP Plc (LON: BP) lower after announcing its first foray into wind power.

Finally, the European Central Bank left monetary policy steady suggesting it is ‘efficient and effective’, despite concerns it wasn’t doing enough. Global inflation data is due this afternoon.

This article 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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Are you stuck wondering where to invest right now? Have you got cash 'sitting on the sidelines'? Are you looking for dividend income AND growth but don't know where to start? Rask's expert ASX analyst team has just released a full report, detailing where we'd invest $10,000 right now.

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Disclosure: At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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