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ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus

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Welcome back to the first Foolish Weekly Wrap of 2021! The S&P/ASX 200 Index (ASX: XJO) had a muted week last week, dropping 0.6% despite a raft of positive developments for ASX shares.

The leading story was the late-week announcement of another massive stimulus package over in the United States. President-elect Joe Biden made the announcement on Friday morning (our time) and told Americans that his plan ‘doesn’t come cheap’ but is necessary to help the US economy transition to a post-COVID, vaccinated future.

The US$1.9 trillion plan involves another round of US$1,400 stimulus cheques as well as funding injections for vaccine rollout efforts, among other provisions.

The markets reacted positively to the announcement on Friday, but tempered their enthusiasm somewhat soon after. That was sparked by doubts surfacing over the Democrats’ ability to shepherd the entire package through Congress with its razor-thin majorities in both Houses.

ASX miners and drillers pile on the gains

Even so, the stimulus announcement was catnip for ASX resources shares in particular. BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) all spiked on Friday on the news, before drifting slightly lower throughout the day.

ASX energy shares also felt the love from the stimulus announcement. Like the miners above, Woodside Petroleum Limited (ASX: WPL), Oil Search Ltd (ASX: OSH) and the energy sector also saw a healthy spike in Friday’s early trade.

But perhaps the week’s biggest winner was Afterpay Ltd (ASX: APT), although for different reasons entirely. Afterpay spent the second trading week of 2021 once again reaching new record highs. The buy now, pay later (BNPL) pioneer hit a new high watermark on Friday of $135.54 a share after shooting more than 10% higher over the trading day. It’s only mid-January, yet Afterpay shares are already up 11.9% year to date!

The catalyst for this move appears to be another round of bullish broker upgrades, as well as the successful IPO of Affirm Holdings Inc (NASDAQ: AFRM). Affirm is a US-listed BNPL company, which rocketed from its IPO price of US$49 a share to US$117 by the end of the week. As my Fool colleague Lina Lim pointed out, Affirm is roughly valued at the same market capitalisation as Afterpay on this move. Investors are clearly interpreting this move as a bullish display of the investor capital available to BNPL companies in the States.

Back home, Afterpay is now valued higher than Telstra Corporation Ltd (ASX: TLS) on the ASX.

How did the markets end the week?

Since the ASX 200 Index started the week at 6,757.9 points and ended up at 6,715.4 points, the benchmark saw a 0.63% decline for the week. Monday kicked things off with a 0.8% decline, which was followed on Tuesday with another 0.1% lopped off. Wednesday saw this partially reversed with a 0.1% gain. Then Thursday turned things around with a 0.4% gain, which was backed up with a tiny 0.002% bump on Friday.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a week in the red, starting at 7,021.2 points and finishing up at 6,986.8 points in a 0.4% drop.

Which ASX 200 shares were the biggest winners and losers?

Everyone’s favourite page is back with our salacious look at the week’s winners and losers. So put the kettle on and fetch the biscuits while we, as always, start with the worst-performing ASX 200 shares of the week:

Worst ASX 200 losers % loss for the week
Polynovo Ltd (ASX: PNV) (28%)
Resolute Mining Limited (ASX: RSG) (15.1%)
Westgold Resources Ltd (ASX: WGX) (9.8%)
Altium Limited (ASX: ALU) (9.7%)

First up is wooden-spoon recipient and healthcare company, Polynovo. Polynovo was in the firing line due to a trading update that was released mid-week. In this update, the company reported sales growth of 31%, which was far below expectations.

Next up we have 2 ASX gold miners in Resolute and Westgold. Both companies were affected by sagging gold prices last week. However, Resolute also provided a production update that wasn’t well-received seeing as it undershot the company’s previous projection.

Finally, Altium was also in the bad books with investors after the software company released some disappointing guidance of its own. Altium expects a 3% drop in revenues for the first half of FY2021. This is largely being driven by coronavirus lockdowns around the world. 

Now with the losers out of the way, let’s take a look at the winners:

Best ASX 200 gainers % gain for the week
Pro Medicus Limited (ASX: PME) 17.1%
Afterpay Ltd (ASX: APT)
14.8%
Whitehaven Coal Ltd (ASX: WHC) 13%
Mesoblast Limited (ASX: MSB) 9.4%

Leading the ASX 200 charge last week was healthcare company Pro Medicus. The catalyst for this bold upwards move appears to be the announcement of a new contract. The 7-year contract is with the US-based Intermountain Healthcare and worth $40 million.

We’ve already discussed Afterpay, while Whitehaven was a beneficiary of the bullishness in the ASX resources sector we also discussed above. In addition, the company also released a well-received quarterly update during the week.

Finally, Mesoblast was in the good books after the pharma company announced that one of its drugs had reduced heart attacks and strokes in its patients by 60% in a recent study.

A wrap of the ASX 200 blue chip shares

Before we go, here is a look at the major ASX 200 blue chip shares as we start on another week in paradise. Note 2021’s brand new addition, Afterpay! Afterpay is not your traditional ASX blue chip, but seeing as it’s now worth more than Telstra, it joins the list.

ASX 200 company Trailing P/E ratio Last share price 52-week high 52-week low
CSL Limited (ASX: CSL) 45.01 $267.26 $342.75 $242.67
Commonwealth Bank of Australia (ASX: CBA) 20.88 $85.38 $91.05 $53.44
Westpac Banking Corp (ASX: WBC) 33.51 $21.35 $25.96 $13.47
National Australia Bank Ltd (ASX: NAB) 22.24 $24.14 $27.49 $13.20
Australia and New Zealand Banking Group Ltd (ASX: ANZ) 20.37 $24.66 $27.29 $14.10
Fortescue Metals Group Limited (ASX: FMG) 12.77 $25.18 $26.40 $8.20
Woolworths Group Ltd (ASX: WOW) 42.94 $39.53 $43.96 $32.12
Wesfarmers Ltd (ASX: WES) 35.06 $50.23 $52.20 $29.75
BHP Group Ltd (ASX: BHP) 23.18 $46.82 $47.54 $24.05
Rio Tinto Limited (ASX: RIO) 21.25 $120.52 $127 $72.77
Coles Group Ltd (ASX: COL) 24.4 $17.89 $19.26 $14.01
Telstra Corporation Ltd (ASX: TLS) 20.40 $3.12 $3.94 $2.66
Transurban Group (ASX: TCL) $12.84 $16.44 $9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD) 93.05 $6.12 $8.86 $4.26
Newcrest Mining Ltd (ASX: NCM) 24.95 $26.68 $38.15 $20.70
Woodside Petroleum Limited (ASX: WPL) $26.76 $36.20 $14.93
Macquarie Group Ltd (ASX: MQG) 20.75 $137.33 $152.35 $70.45
Afterpay Ltd (ASX: APT) $133.15 $135.54 $8.01

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

  • S&P/ASX 200 Index (XJO) at 6,715.40 points.
  • All Ordinaries Index (XAO) at 6,986.8 points.
  • Dow Jones Industrial Average Index (DJX: .DJI) at 30,814.26 points after falling 0.57% on Friday night (our time).
  • Gold (Spot) swapping hands for US$1,827.63 per troy ounce.
  • Iron ore asking US$170.15 per tonne.
  • Crude oil (Brent) trading at US$55.10 per barrel.
  • Australian dollar buying 76.87 US cents.
  • 10-year Australian Government bonds yielding 1.08% per annum.

That’s all folks. See you next week!

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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 and recommends Altium and Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and POLYNOVO FPO. 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, COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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