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ASX 200 Weekly Wrap: New ASX bull run continues

The S&P/ASX 200 Index (ASX: XJO) has continued its recent form and delivered investors another week of bumper gains last week with a 2.78% rise. It’s the second week in a row that the ASX 200 has risen, although last week was a much more enthusiastic performance than the week prior.

It comes off the exciting news that governments around the country are beginning to ease restrictions surrounding the coronavirus, with cafes and restaurants reopening for in-room dining as soon as last Friday and small social gatherings now permitted in many states.

We also had some positive news on the share markets that added to the bullish sentiment.

Macquarie Group Ltd (ASX: MQG) reported its earnings for the 12 months to March 31. Although the company announced a 10% drop in earnings per share, an 8% decline of net profits and a 25% haircut to its dividend, investors were in a very forgiving mood, pushing Macquarie’s share price up 5.67% to $105.19 on Friday and up 9.57% for the week.

Afterpay Ltd (ASX: APT) was also (once again) the star of the weekly ASX show. After it emerged last weekend that Chinese conglomerate Tencent Holdings had built up a ~5% stake in Aftrpay over March and April, investors were bracing themselves for some of that volatility that Afterpay is famous for. And it didn’t disappoint.

Afterpay shares opened 30% higher last Monday morning before briefly falling over 8% after the bell, before again rocketing back nearly 5% afterwards. All in all, it was a 37% week for the buy now, pay later pioneer. What’s more, last week’s moves mean that Afterpay shares are up close to 400% since the lows we saw in March. Got FOMO yet?

We also heard from Westpac Banking Corp (ASX: WBC) last week when it delivered its half-year earnings result on Monday. Investors had been expecting the worst and the bank didn’t disappoint. Westpac reported a 70% collapse in cash earnings and an interim dividend ‘deferral’. Investors must have been bracing for even worse numbers though – Westpac shares ended up over 3% higher for the week on Friday.

How did the markets end the week?

As we’ve already alluded, the markets had a very healthy week. The ASX 200 opened last week at 5,245.9 points and ended the week at 5,391.10 points – pinning this week’s gains at 2.78%.

Monday and Tuesday were the strongest days last week, with 1.4% and 1.6% rises respectively. Wednesday and Thursday both saw mild falls, and a mild rise of 0.5% followed on Friday.

Meanwhile, the ALL ORDINARIES (INDEXASX: XAO) had an even better week than the ASX 200, rising from 5,325 points on Monday to 5,488 points on Friday – up 3.06% for the week.

Which ASX shares were the biggest winners and losers?

As always, let’s have a look at the biggest ASX winners and losers for the week. Let’s take the bins out and get rid of the bad news first with the losers:

Worst ASX losers

 % loss for the week

Orocobre Limited (ASX: ORE)

6.5%

Inghams Group Ltd (ASX: ING)

6.5%

Alumina Limited (ASX: AWC)

6.2%

Qantas Airways Limited (ASX: QAN)

6.1%

As you can see, lithium miner Orocobre topped the losers last week. There were no major announcements or news out of Orocobre that might easily explain this share’s wooden spoon, but Orocobre did recently report some delays with capital works at one of its mines due to the coronavirus.

Investors weren’t too wild about poultry producer Inghams last week either. The company did deliver a market update on Monday in which it warned that the current economic environment would make it difficult for the company to issue accurate guidance in 2020.

Former dividend heavyweight Alumina also made the list, as did Qantas. Regarding the latter, perhaps investors were spooked after Warren Buffett revealed Berkshire Hathaway has sold out of all its US airline holdings last weekend.

Now we’ve discussed the losers, let’s now take a look at which stocks made investors the happiest last week.

Best ASX gainers

 % gain for the week

Afterpay Ltd (ASX: APT)

37%

EML Payments Ltd (ASX: EML)

28.7%

Polynovo Ltd (ASX: PNV)

28.1%

Appen Ltd (ASX: APX)

18.3%

As we have discussed earlier, Afterpay was the clear ASX winner of the week with an eye-watering 37% gain. Investors are clearly very excited to have a company of the size and reputation as Tencent throwing its weight behind the company.

It was a great week for payment stocks across the board, with the smaller EML Payments also seeing a healthy surge in buying. There was no major news out of EML this week, so it’s possible that investors were getting a bit carried away with Afterpay and some of this sentiment has spilled into EML. The coronavirus is also seeing a big surge in cashless payments, so this paradigm might also be adding some fuel to EML’s fire.

Healthcare wunderkind Polynovo and WAAAX investing favourite Appen also saw healthy bumps this week.

What is this week looking like for the ASX?

The news of potential further easing of coronavirus restrictions is clearly an exciting news piece for investors to contemplate and it’s possible that this might translate into higher ASX share prices this week. We are starting to get a clearer insight into how the ASX’s biggest companies are being affected by the coronavirus lockdowns with earnings trickling through, which is certainly helping ease some of the fears of the unknown (although I maintain it’s far too early to ascertain all of the damage just yet).

Over in the US, we got some awful news on Friday. According to reporting in the Australian Financial Review (AFR), 20.5 million Americans lost their jobs in April and the US unemployment rate now stands at 14.7% – a level not seen since the Great Depression almost 100 years ago. We’ll have to see if this news flows through to US investor sentiment on Monday night (our time).

Back home, there’s a third-quarter update from Commonwealth Bank of Australia (ASX: CBA) due out on Wednesday. CBA is the only ‘Big 4’ bank that hasn’t yet reported any post-coronavirus earnings, so that will certainly be interesting viewing and one most ASX investors will be keeping an eye on this week.

Before we go, here’s how the major ASX blue-chips are looking as we start a new week:

ASX company

Trailing P/E ratio

Last share price

52-week high

52-week low

CSL Limited (ASX: CSL)

43.80

$301.18

$342.75

$189.14

Commonwealth Bank of Australia (ASX: CBA)

10.81

$59.60

$91.05

$53.44

Westpac Banking Corp (ASX: WBC)

11.64

$15.51

$30.05

$13.47

National Australia Bank Ltd (ASX: NAB)

14.43

$16.08

$30.00

$13.20

Australia and New Zealand Banking Group (ASX: ANZ)

10.71

$15.73

$29.30

$14.10

Woolworths Group Ltd (ASX: WOW)

17.27

$34.70

$43.96

$30.09

Wesfarmers Ltd (ASX: WES)

19.42

$37.45

$47.42

$29.75

BHP Group Ltd (ASX: BHP)

10.88

$31.40

$42.33

$24.05

Rio Tinto Limited (ASX: RIO)

10.94

$83.00

$107.79

$72.77

Coles Group Ltd (ASX: COL)

17.10

$15.20

$18.09

$11.76

Telstra Corporation Ltd (ASX: TLS)

17.48

$3.03

$3.95

$2.87

Transurban Group (ASX: TLC)

160.85

$13.60

$16.44

$9.10

Sydney Airport Holdings Pty Ltd (ASX: SYD)

30.46

$5.45

$9.30

$4.37

Newcrest Mining Limited (ASX: NCM)

24.46

$27.60

$38.87

$20.70

Woodside Petroleum Limited (ASX: WPL)

38.40

$21.89

$37.55

$14.93

Macquarie Group Ltd (ASX: MQG)

11.07

$105.19

$152.35

$70.45

And finally, here is the lay of the land for some leading market indicators:

  •     S&P/ASX 200 (XJO) at 5,391.1 points
  •     ALL ORDINARIES (XAO) at 5,488 points
  •     Dow Jones Industrial Average at 24,331.32 points
  •     Gold (Spot) is swapping hands for US$1,700.60 per troy ounce
  •     Iron ore is asking US$87.18 a tonne
  •     Crude oil (Brent) is trading at US$30.97 a barrel
  •     Crude oil (WTI) is going for US$24.74 a barrel
  •     Australian dollar buying 65.29 US cents

Foolish takeaway

The strong momentum the ASX has shown since late March was on full display last week. Although I am just as excited as every other Australian at the prospects of restrictions being lifted, I am still cautious that the current levels we are seeing on the ASX boards are not leaving a lot of wiggle room if the economy rebounds in any other fashion than a sharp ‘V’. Therefore, I would still recommend investing with caution in the current market, with one eye ever on the horizon.

As always, stay safe, stay rational and stay Foolish, fellow investors!

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Sebastian Bowen owns shares of National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Emerchants Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, Appen Ltd, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Emerchants Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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