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S&P/ASX 200 morning report, Tesla rockets & Freedom Foods goes sour

The S&P/ASX 200 (INDEXASX: XJO) is expected to open lower on Monday morning with SPI futures contracts on the Sydney Exchange pointing to a 20-point decline.

Mixed week

It was a mixed finish to the week, with markets waiting with bated breath for President Trump’s speech on his policy towards China.

The ASX 200 fell heavily in the afternoon to finish down 1.6% for the day. However, it wasn’t enough to stop the second consecutive monthly gain of 4.2% taking the year-to-date loss to 14%.

Looking at the month more broadly, it was the IT (+20%) sector, rallying behind Afterpay (ASX: APT) and energy (+13%) sector, thanks to a recovering oil price, that did the heavy lifting.

The US fared markedly better with the S&P 500 up 0.5% and Nasdaq 1.3%, as Trump took what appeared to be a more conciliatory tone in his response to the introduction of the Chinese Security Law in Hong Kong. This meant the S&P500 finished the month down, just 6% lower for the year.

Reusable rockets send astronauts to space

Tesla (NASDAQ: TSLA) founder Elon Musk had a busy weekend with his SpaceX program, successfully launching NASA astronauts whilst also meeting the criteria for a $770 million stock bonus issue. This came as riots engulfed several US cities following the death of George Floyd at the hands of a Minneapolis police officer.

Well-known muesli and long-life milk producer Freedom Foods (ASX: FNP) fell 15% last week following an asset writedown and earnings downgrade. This one was unexpected given the non-perishable nature of their product line, which was a strong beneficiary of hoarding in early March. It seems the Freedom Foods’ out-of-home business including contracts with McDonald’s was the driver, down 75% from expectations in April and 50% in May.

Best & worse growing further apart?

Dispersion remains the name of the game in global sharemarkets.

Dispersion refers to the diverging performance of companies within the same index; think CSL (ASX: CSL) vs. Westpac Banking Corporation (ASX: WBC) on the ASX. Case in point is the S&P500’s strong performance since bottoming in March but with relatively few companies, including Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), Alphabet (NASDAQ: GOOGL) and Facebook (NASDAQ: FB), moving the market higher.

Also known as attribution dispersion, the trend simply means that fewer companies are seeing share price increases and ‘the big are getting bigger’. Dispersion has historically been a fertile hunting ground for active investors because whilst markets overall appear quite overvalued, individual companies are anything but. I’m supportive of an active, stock selection approach in this environment for my clients.

This report was written by Drew Meredith, Financial Adviser and 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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