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S&P/ASX 200 to open flat – 6 ASX shares to watch

The S&P/ASX 200 (INDEXASX: XJO) is set to open flat on Tuesday according to data from the Sydney Futures Exchange. Here’s your daily morning report.

Vic case numbers buoy the ASX

The ASX 200 hit a three week high to start the week, adding 1.8% as slowing Victorian coronavirus case numbers boost confidence. This strength could continue into Tuesday, but investors should be wary of key companies reporting to finish the week.

The highlights were the Commonwealth Bank of Australia Ltd (ASX: CBA) and Westpac Banking Corp (ASX: WBC) increasing 3.4% and 3.3%, respectively. With no indication on the figure required to warrant a loosening of restrictions, markets appear overly optimistic.

President Trump’s decision to overrule Congress and extend social security payments further buoyed markets at the same time as ramping up pressure on Chinese businesses.

Blood donor issues facing CSL Limited (ASX: CSL)’s US operations appear to have been overcome, with foot traffic to donation centres just 25% below 2019 levels in July; shares finished 1.9% higher.

Meanwhile, Kogan.com Ltd (ASX: KGN) hit another all-time high, reporting a further 110% increase in sales in July. Unfortunately, this one looks like a poor man’s Amazon Inc. (NASDAQ: AMZN) to me and is best avoided at current levels.

Short of a dollar

Qantas Airways Limited (ASX: QAN) surprised markets yesterday, announcing that just $71.7 million of the $500 million retail share purchase plan was applied for, leaving them $400 million short. Are retail investors being more prudent with their capital than fund managers and super funds investing on behalf of others? Only time will tell but given Warren Buffett’s recent suggestions only a vaccine will save airlines, Qantas may be in for a rough period.

Diversified real estate investment trust GPT Group (ASX: GPT) was the latest property owner to disappoint investors, reporting a $519.1 million net loss for the half-year after cutting property valuations by $711.3 million; the net asset value of the trust fell 4.8%. Rental income fell some 23.3% and forced a similar 30% cut in the dividend to just 9.3 cents. Management highlighted strong retail leasing results for the financial year, averaging 4.7% rent increases, yet with $48.2 million in waived rent and arrears accumulating, this could be papering over the cracks ahead of what will be a very difficult few years for the business and sector.

Global markets mixed

Overseas markets finished mixed to start the week, with investors seemingly balancing the benefits of Trump’s social security policy with the increasing tit-for-tat playing out between US and Chinese officials. What began with Tik Tok has expanded to sanctions on US and Chinese officials.

The pressure saw the Nasdaq weaken 0.4% but the S&P 500 continued to close the gap, adding 0.3% on the back of a global rally in the oil price; this case after Saudi Aramco announced a 73% fall in profit but suggested demand was improving. Other beneficiaries were travel and leisure stocks including Las Vegas casino owner MGM Resorts Inc. (NYSE:MGM), up 13.8%, and cruise line Carnival Corp (NYSE:CCL) up 8.6%, as President Trump suggested he is still open to negotiations on further aid.

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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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.


Disclosure: Drew Meredith is the author of this post. He may maintain positions in the securities mentioned.

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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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