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Easy money promises push ASX 200 to high after crash // Motley Fool Australia

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the S & P / ASX 200 Index (ASX: XJO) just capped off another week of amazing gains that helped him reach a new post-crash high. Last week, the ASX 200 added another 1.2% on top of the awe-inspiring 5.37% gain the week before, which pushed the index to new highs after March. The ASX 200 closed at 6,176.8 points but reached 6,230 points during the week.

While we are still a long way from reaching the levels of 7,000 and above that the ASX 200 was trading before COVID in February, it was certainly a good week to have an ASX stock portfolio.

As seems usual these days, it was ASX tech stocks that led the gains last week. the S & P / ASX All Technology Index (ASX: XTX) was up 3.7% for the week, helped by a major constituent Afterpay Ltd (ASX: APT) printing a new record high of $ 98.68 on Wednesday. It looks like the countdown to a triple-digit Afterpay share price is approaching midnight. the Xero Limited The stock price (ASX: XRO) was also on fire last week and posted a new all-time high at $ 119.88.

In a rare start, the gains in ASX Tech stocks were not accompanied by their US counterparts. More important again, Apple Inc (NASDAQ: AAPL) was on the nose with investors after posting details of its new iPhone 12 lineup. The new handset’s “ new design ” and 5G capability obviously didn’t impress investors, who drove Apple shares down more than 4% between Monday and Friday last week.

So what was the catalyst for this week’s Double Earnings? Two words: easy money.

RBA QE flags

Reserve Bank of Australia (RBA) Governor Dr Philip Lowe told Australians on Thursday that the RBA is now ‘considering’ further easing, which could include buying longer bonds. term (such as 5 or 10 year bonds). . So far, the RBA has intervened in the bond market, but in buying shorter-term bonds. But if the RBA does expand that program, Australia will almost certainly be described as entering official QE territory.

Further intervention by the RBA in these markets is generally seen as conducive to higher stock prices. As such, I think those comments were part of the source of the ASX 200 push last week. Dr Lowe’s comments did nothing to dampen speculation that the RBA is about to initiate a further cut in the cash rate from 0.25% to 0.1%, which likely also helped.

Also worth mentioning is the amazing Initial Public Offering (IPO) of Aussie Broadband Ltd (ASX: ABB). The Aussie Broadband share price soared 90% on its first day on the ASX boards when it closed at $ 1.90 after listing at just $ 1 per share. It was even better intraday too – at one point, stocks were up over 122%.

How did the markets end the week?

The markets ended the week well, as we have already discussed. But here is the long version of the story. Monday saw a good start to the week with a 0.5% gain, which was supported by another 1% top-up on Tuesday. Wednesday saw that streak end with a 0.3% loss, but that was quickly forgotten on Thursday with a 0.5% gain on the back of RBA comments. Friday saw another 0.54% cool down, but that wasn’t enough to stop the ASX 200’s substantial gain for the week.

Meanwhile, the Index of all Ordinary (ASX: XAO) also had a good week, starting at 6,312.85 points and ending at 6,385 points, a gain of 1.1% for the week.

Which ASX 200 stocks were the biggest winners and losers?

It’s gossip time (Fool style) now, where we look at the biggest winners and losers of the week. So turn on the kettle and we’ll start with the losers, as always.

Besieged Travel Stock Flight Center released the wooden spoon last week. There hasn’t been any major news from Flight Center in the past week to catalyze this move. However, the company has recently been the victim of negative brokerage coverage, which is likely the reason for this move. The COVID cases rolling around the world are doing no good like Flight Center, and investors are likely taking note.

Biotech company Mesoblast followed with a 7.7% swing. Again, there was no major news from Mesoblast last week, but investors have continuously sold shares of Mesoblast since its fall of 42% in late September. I suspect last week’s moves represent an exit from some burnt shareholders.

Another part of the journey in Webjet was as follows, and just like the other two, this stock’s downfall was not caused by any announcements from the company. I suspect the sale of this business was driven by factors similar to Flight Center.

Finally, we had a rare entry to the losers column with Zip. Zip shares have rebounded in recent weeks. Last week, it seemed like a bad reaction to the company’s Q1 update that caused this selling pressure. It’s hard to see how an investor would be put off by a 96% increase in sales volume, but the numbers don’t lie!

Now that the losers are out of the way, let’s take a look at last week’s winners:

Best ASX 200 gainers

% gain for the week

Unibail-Rodamco-Westfield (ASX: URW)

23.3%

Administration Holdings Ltd link (ASX: LNK)

21.55%

GUD Holdings Limited (ASX: GUD)

12.5%

Super Retail Group Ltd (ASX: SUL)

9.9%

An unusual presence in the winner’s column last week was our winner ASX 200, owner of the Unibail-Rodamco-Westfield mall. URW was finally the victim of the goodwill of investors after the announcement of the sale of offices in Paris. Despite last week’s gains, Unibail’s share price is still down more than 70% since the start of the year.

Then we had the administration service provider, Link Administration. Link received a cash takeover bid from a private equity syndicate last week for $ 5.20 per share. This prompted a rapid revaluation of the market towards this price.

The less-than-stylish GUD Holdings was also in good shape last week after the company released a strong quarterly update to the market. With sales up 14% from the previous corresponding quarter, it’s no surprise that investors are feeling generous with this one.

And finally, Super Retail Group (the name behind Super Cheap Auto and Rebel) was also in good shape, despite no major news from the company. Maybe it was replicas of the budget from two weeks ago, maybe it was the performance of fellow auto parts supplier GUD, or maybe it was Maybelline. Either way, investors were undoubtedly grateful.

What does this week look like for the ASX 200?

After the breathtaking performances of the past two weeks, it will be interesting to see if the ASX 200 holds the line and keeps the winning streak alive, or takes a chill and falls back to 6,000 points this week.

We had a very decisive result in Saturday’s New Zealand election, which gave Jacinda Ardern of the Labor Party a second term with a rare parliamentary majority. This could be on the minds of investors at the start of the week, given the alluring prospect of a trans-Tasman travel bubble that Ms Ardern previously reported.

In other political news, I suspect that with the election in the United States getting closer and closer, the minds of investors will be increasingly preoccupied with the different possible outcomes. Accordingly, I will be monitoring any major and potential market developments across the Pacific this week.

So before you go, here’s a look at what the top ASX 200 blue chip stocks look like:

  • S & P / ASX 200 (XJO) at 6,176.8 points
  • All Ordinaries (XAO) at 6385 points
  • Dow Jones Industrial Average at 28,606.31 points after rising 0.39% Friday night (our time)
  • Gold (spot) trading hands for US $ 1,899.04 per troy ounce
  • Iron ore requested US $ 120.37 per tonne
  • Crude oil (Brent) is trading at US $ 42.93 per barrel
  • Crude Oil (WTI) costs US $ 41.12 per barrel
  • Australian dollar buying 70.8 US cents
  • 10 year Australian government bonds with a yield of 0.72% per annum.

Takeaway idea

With the ASX 200 peaking after March, it has certainly been a good week for ASX investors. Who knows what the twists will bring this week! I still anticipate a lot of volatility in global markets when the US election finally begins early next month.

As such, I think ASX investors should take the gains of the past two weeks with a pinch of salt and at least be mentally prepared for the ups and downs. So, as always, stay safe there, stay rational and stay silly!

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Scott has just revealed what he believes to be the five best ASX stocks for investors to buy now. These stocks are trading at very low prices and Scott thinks they are a great buy right now.

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Sebastian bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited and Telstra Limited. Motley Fool Australia’s parent company, Motley Fool Holdings Inc., owns stock and recommends Apple. Motley Fool Australia’s parent company, Motley Fool Holdings Inc., owns shares of CSL Ltd., Link Administration Holdings Ltd, Xero and ZIPCOLTD FPO. The Motley Fool Australia owns shares and recommended Macquarie Group Limited, Super Retail Group Limited, Telstra Limited and Webjet Ltd. . The Motley Fool Australia recommended Apple, Flight Center Travel Group Limited and Link Administration Holdings Ltd. We fools might not all share the same opinions, but we all believe that considering a diverse range of information makes us better investors. The Motley Fool has a disclosure policy. This article only contains general investment advice (under AFSL 400691). Authorized by Scott Phillips.

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