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ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher

ASX 200 news represented by Labrador dog holding a newspaper
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The S&P/ASX 200 Index (ASX: XJO) has just capped off a bumper week which saw the flagship index rise a healthy 1.3% and hit a new post-March high. The ASX 200 finished the week right on 6,800 points, the first time this threshold has been tested since the coronavirus-induced ravages that last March brought to the markets.

This puts the index up 1.7% for the year to date – not a bad outcome considering we haven’t even wrapped up January yet. So what was the catalyst for last week’s healthy jump? We can probably put it down to the smooth transition of power we witnessed across the Pacific on early Thursday morning (our time).

That observation comes after taking a look at how the ASX 200 opened on Thursday compared with the level it finished up at on Wednesday. It’s no secret that the now-former US President Donald Trump didn’t exactly go… quietly into the night, after the results of the presidential election back in November became apparent.

A Biden dawn lights up the ASX

Indeed, Mr Trump is now in the process of going through his second impeachment trial, the first time this dishonour has followed an outgoing president. Now, after the riots at the US capitol on 6 January, much was made of the ongoing potential threats to a peaceful transition of power that took place on 20 January at the inauguration. The market was clearly buying into these fears, given there was a relief rally when it all went off without a hitch.

Now that President Biden is officially in office, market attention is turning to the new administration’s cabinet members. They are currently going through the routine senate confirmation process. The nominee for US Treasury Secretary, Janet Yellen, seems to be a popular choice among investors, given her previous role as head of the US Federal Reserve.

The administration’s bold stimulus agenda has also been well received. Biden has already proposed a US$1.9 trillion package to counter the ongoing economic woes the pandemic is inflicting on the US economy. Investors have evidently largely embraced Biden’s agenda (despite corporate tax hike proposals), given the US markets are up more than 14% since the election. 

But let’s get back to the ASX.

So we saw a number of significant moves on the ASX last week. First up was Zip Co Ltd (ASX: Z1P). The Zip share price ballooned close to 30% last week following the release of the company’s second quarter update. In this update, Zip told the market its transaction values had surged by more than 100%, including a 200%-plus rise in US payments under the company’s QuadPay brand.

Despite this spike, Zip shares are still trading around 30% off of their all-time high of $10.64 we saw last year. Zip shareholders can’t complain too loudly though. The company’s share price is up almost 34% over the past month.

Rare earths miner and processor Lynas Rare Earths Ltd (ASX: LYC) also had a stunning week. The Lynas share price was up close to 27% last week, including a 13.7% boost on Friday alone. The driver of these results was a new agreement for the company with the US Government and the state of Texas. This agreement will see Lynas build a new separation plant in the state, for which the US Department of Defence is contributing US$30 million. 

How did the markets end the week?

The ASX 200 started the week at 6,714.4 points and finished up at 6,800.4 points, pegging the week’s gains at 1.3%. Monday saw a slow start, with the index shedding 0.78%. But Tuesday turned the tide with a healthy 1.19% gain. Wednesday and Thursday backed this move up with 0.41% and 0.79% gains respectively. Friday saw a small sell-off worth 0.34%. But that wasn’t enough to dent the ASX’s still-impressive 1.3% gain for the week.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a top week, starting at 6,986.6 points and finishing up at 7,078.9 points, up 1.32% for the week.

Which ASX 200 shares were the biggest winners and losers?

Ok, time to put the kettle on as we gossip over last week’s biggest winners and losers. We’ll start with the losers:

Worst ASX 200 losers % loss for the week
Whitehaven Coal Ltd (ASX: WHC) (10.6%)
Unibail-Rodamco-Westfield (ASX: URW) (10.2%)
Alumina Limited (ASX: AWC) (6.3%)
Premier Investments Limited (ASX: PMV) (6%)

First up on the losers list is wooden spoon recipient Whitehaven Coal. It’s unclear what bugs were in investors’ beds over Whitehaven last week. One possible explanation might be the Biden administration’s attitude towards climate change. Indeed, one of President Biden’s first acts was rejoining the US to the Paris Climate Accord. Maybe that gave some Whitehaven shareholders coal feet…

Next up is Unibail-Rodamco-Westfield. The catalyst for URW’s fall may have been the announced sale of a Paris office building (the only real piece of news from the company last week).

Alumina is next with a 6.3% drop. Again, there is no obvious reason why Alumina copped some selling pressure last week. My Fool colleague James Mickleboro noted it may have been the result of some bearish broker commentary

Finally, we have ASX retail darling Premier with a 6% decline. It seems with this one investors decided the Premier share price may have gotten a little carried away. Even after last week’s drop, however, the company’s shares are still up more than 30% over the past 6 months. 

Now the losers are out of the way, let’s check out last week’s winners:

Best ASX 200 gainers % gain for the week
Zip Co Ltd (ASX: Z1P) 28.9%
Lynas Rare Earths Ltd (ASX: LYC)
26.1%
Netwealth Group Ltd (ASX: NWL) 20.5%
Bingo Industries Ltd (ASX: BIN) 20.2%

A rare occurrence, with all four shares up more than 20% last week! We’ve already covered Zip and Lynas, but Netwealth’s good fortune can be put down to the release of the company’s second quarter update. In this update, Netwealth told the market its funds under management had surged 14% over the quarter. 

Meanwhile, Bingo was up big due to a takeover proposal, which valued the waste management company’s shares at $3.50 each. Even with the gains of the week, the Bingo share price finished up on Friday at $3.27, so we’ll see where things go from there. 

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 yet another week on the hunt. Interestingly, we were starting to see some of the 52-week highs of 2020 drop off the perch last week.

ASX 200 company Trailing P/E ratio Last share price 52-week high 52-week low
CSL Limited (ASX: CSL) 45.79 $274.60 $342.75 $242.67
Commonwealth Bank of Australia (ASX: CBA) 20.81 $85.09 $91.05 $53.44
Westpac Banking Corp (ASX: WBC) 34.18 $21.78 $25.96 $13.47
National Australia Bank Ltd (ASX: NAB) 22.23 $24.12 $27.49 $13.20
Australia and New Zealand Banking Group Ltd (ASX: ANZ) 20.35 $24.64 $27.29 $14.10
Fortescue Metals Group Limited (ASX: FMG) 12.21 $24.32 $26.40 $8.20
Woolworths Group Ltd (ASX: WOW) 44.27 $40.76 $43.96 $32.12
Wesfarmers Ltd (ASX: WES) 37.28 $53.41 $53.88 $29.75
BHP Group Ltd (ASX: BHP) 22.62 $46.13 $47.54 $24.05
Rio Tinto Limited (ASX: RIO) 20.84 $119.32 $127 $72.77
Coles Group Ltd (ASX: COL) 24.77 $18.16 $19.26 $14.01
Telstra Corporation Ltd (ASX: TLS) 20.40 $3.20 $3.94 $2.66
Transurban Group (ASX: TCL) $13.40 $16.44 $9.10
Sydney Airport Holdings Pty Ltd (ASX: SYD) 89.55 $5.89 $8.46 $4.26
Newcrest Mining Ltd (ASX: NCM) 24.78 $26.76 $38.15 $20.70
Woodside Petroleum Limited (ASX: WPL) $26.56 $35.94 $14.93
Macquarie Group Ltd (ASX: MQG) 20.71 $137.10 $152.35 $70.45
Afterpay Ltd (ASX: APT) $141.33 $151.22 $8.01

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

  • S&P/ASX 200 Index (XJO) at 6,800.4 points.
  • All Ordinaries Index (XAO) at 7,078.9 points.
  • Dow Jones Industrial Average Index (DJX: .DJI) at 30,996.98 points after falling 0.57% on Friday night (our time).
  • Gold (Spot) swapping hands for US$1,856.06 per troy ounce.
  • Iron ore asking US$166.14 per tonne.
  • Crude oil (Brent) trading at US$55.41 per barrel.
  • Australian dollar buying 77.18 US cents.
  • 10-year Australian Government bonds yielding 1.13% 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 CSL Ltd., Netwealth, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited, Premier Investments 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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