The ASX 200 (ASX: XJO) is poised to rise when the market opens on Monday. Here’s your daily ASX morning report.
ASX 200 up 1.7% for the week, Teoh leaves TPG
The S&P/ASX 200 finished the day 0.5% higher to end the week, with every sector but healthcare delivering a positive return. Telecommunications and IT were the highlights, finishing 1.3% and 1.2% higher with a 2.4% jump in Telstra Corporation Ltd (ASX: TLS) offsetting a 6.7% fall in TPG Telecom Ltd (ASX: TPG).
TPG was the worst-performing company of the day, tanking on the unexpected news that founder David Teoh and his son Shane would be leaving the company effective immediately.
AMP Ltd (ASX: AMP) exited its trading halt by confirming that CEO Francesco de Ferrari was in fact not leaving the company; not yet anyway. Rumours suggest large shareholders are disappointed at the pace of the turnaround and advocating for change.
Macquarie Group Ltd’s (ASX: MQG) incredible recovery continued, hitting an all-time high during the session, whilst lithium miner Pilbara Minerals Ltd (ASX: PLS) received an unexpected boost after a few difficult weeks, jumping 9.5% to finish the week.
Over the week, the ASX recorded four days of gains to deliver a return of 1.7% with healthcare and utilities, up 5.1% and 3.5% respectively, the key beneficiaries in a rotation to ‘quality’.
Crown Resorts Ltd (ASX: CWN) was the top-performing, adding close to 20% after receiving a takeover offer whilst Resolute Mining Limited (ASX: RSG) and Netwealth Group Ltd (ASX: NWL) were the worst, down 26% and 14%, respectively.
US markets push higher, dividend reins released
The US markets finished the week strongly, with the Dow Jones up 1.4%, the S&P 500 1.7% and the Nasdaq 1.2% on a generally positive day for markets.
The key drivers were healthcare and energy companies amid news that the Suez Canal may remain blocked for at least a week, with hundreds of ships now waiting to pass through, effectively putting the global economy on hold.
Friday’s returns led to a 1.4% weekly gain for the Dow, the best in a month, but the Nasdaq continues to weaken, falling 0.6% over the five days. Investors are pointing to pension funds’ quarterly rebalancing between bonds and equities for the lack of direction.
On a positive note, the Federal Reserve will release the dividend restrictions on US banks from 30 June 2020, which supported JP Morgan (NYSE: JPM) and Macquarie Group hitting all-time highs on Friday.
February saw the biggest decline in spending 10 months, falling 1% due to poor weather and extended lockdowns whilst personal income fell 7.1% as stimulus cheques ceased. Central banks are looking increasingly accurate with US inflation just 0.1% for the month, suggesting there is a long way to go.
The semi-conductor sector was a key outperformer with a shortage of chips seeing a surge in demand. ASML (AMS: ASML) jumped 7.1% and Intel Corp (NASDAQ: INTC) 4.6% to finish the week.
My three investor takeaways from the week
1. As things change, they stay the same
The news of the week was by far the blockage at the Suez Canal after a ship ran aground in what is one of, if not the, most important shipping channels in the world.
The canal is said to transit some 30% of all container volume in the world every day and offers a unique reminder of what truly drives the global economy.
Whilst all the focus is on the booming technology sector, the economy still relies on the transport of commodities and consumer products, all of which has come to a halt.
2. ASX retailers nearing JobKeeper cliff
JobKeeper will end in just a few short days and it is clear many companies, nor State and Federal governments, are ready for what is to come.
Whilst the big names have been resilient, benefitting from higher margins and job cuts, a short walk through any neighbourhood likely includes many ‘For Lease’ and ‘Closed’ signs on previously popular restaurants and stores.
What comes next is anyone’s guess, but the winners and losers won’t be clear for some time.
3. Shareholders and the community getting impatient
Finally, as we have seen in Canberra and even with AMP this week, shareholders and the community are getting impatient – they want change, and they want it now.
The social license to operate has never been more valuable but also constantly at risk should their activities not meet expectations; hence the growing popularity of ESG investing.
