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This year. We're going Beyond.

S&P/ASX 200 morning report – my 3 investor takeaways from the week

The S&P/ASX 200 (ASX: XJO) is expected to charge higher when the market opens on Monday, according to the latest SPI futures. Here’s what ASX investors need to know as we head into a new week (and month!).

ASX staring down best month since 1998

The ASX 200 finished higher for the fourth straight week, adding 1.0% despite falling 0.5% on Friday. The vaccine-led recovery means the index is sitting on the best gain in over 30 years whilst leading our global peers having now controlled COVID-19. Cyclical sectors were the week’s winners, led by energy and materials, as signs of a sustained economic recovery saw the oil price rally and the iron ore price remain around USD$130 per tonne.

BHP Group Ltd (ASX: BHP) finished the week 7.1% higher after falling 1.2% on Friday, with high-quality iron ore seemingly immune from the worsening trade dispute with China.

On the other hand, Bega Cheese Ltd (ASX: BGA) has been a beneficiary of the Australian Government’s decision to ban a Chinese buyer from the purchase of the Lion Dairy and Drinks business, with a successful capital raising sending the Bega share price 9.8% higher on Friday.

Whilst international borders remain firmly closed, the opening of domestic borders buoyed the travel sector, with Webjet Limited (ASX: WEB) a key beneficiary for hotel and regional holiday bookings, growing 7.8% in the week.

Australia-China trade relationship worsens

The worsening relationship between China and Australia has seen another major casualty with Treasury Wine Estates Ltd (ASX: TWE), owner of the ubiquitous Penfolds brand, falling 11.3% on Friday before entering a trading halt. Investors had gotten wind of the impending imposition of tariffs on Australian wine imports in China.

It is clear the Chinese Government is seeking greater self-sufficiency, with Australian wine the latest target. The government is set to apply tariffs of between 107% and 212% to exports that currently equate to some 40% of Australia’s $1.25 billion in annual exports and a major source of Treasury Wine’s revenue. It is becoming increasingly evident that Australia’s relationship with China will be the most powerful theme of 2021 and beyond.

Turning to the US, news that President Trump will vacate the White House when the Electoral College confirms Joe Biden was received positively on an otherwise quiet day. The S&P 500 finished 0.2% higher and the Nasdaq another 0.9%. Similarly to Australia, US markets are closing in on the best month in several decades, the weekly returns finishing at 1.6% and 2.5%, respectively, with energy and oil prices a key driver.

My key investor takeaways from the week

In a week that saw the backend of AGM season and the delivery of the Victorian State Budget, here are my three key takeaways.

AGMs demand greater accountability

With AGM season coming to an end, pressure on management and boards to be accountable for major strategic decisions has come into focus. This week it was shareholders in IOOF Holdings Limited (ASX: IFL) questioning the price and justification for the purchase of MLC’s financial advice business, particularly in light of the increasing regulatory pressure on the sector.

Property the centrepiece

The week saw the delivery of the Victorian State Budget, delivered with the tried and true ‘fiscal stimulus’ focused once again on the construction and housing sectors. The reduction in stamp duty and increased first home buyer’s grant, combined with mortgage rates below 2%, suggests the only way is up for property in the short-term. The bigger question, however, is whether this sort of spending has the same multiplying effect it used to, particularly when our CBDs and the businesses that inhabit them remain deserted.

IPO market bubbles over

The week also saw the end of what has been one of the more remarkable runs for IPOs in recent history, with the listing of law firm HWL Ebsworth and Fantastic Furniture both dumped. It was clear that investors had become warier as the flood of listings continued, with any business operating in e-commerce seeking eye-watering multiples. Small-cap IPOs remain a high-risk proposition despite the market recovery.

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW or entering your email below.

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Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

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.

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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Rask Media’s Ultimate BNPL Sector Report

Afterpay, Zip, Sezzle… is this the opportunity of a lifetime? Or is BNPL a ticking time bomb? This 7,500-word analyst report takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. 

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As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

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