S&P/ASX 200 top open higher as the US dollar & Chinese Yuan look at fall

The S&P/ASX 200 (ASX: XJO) is tipped to jump on Tuesday according to the latest contracts on the Sydney Futures Exchange. Here’s what you need to know…

Aussie markets up despite US vacation

It was Memorial Day in the US, but a strong lead from the futures market was enough to send the ASX 200 to an 11-week high on Monday, but over 2% for the day. The European and Japanese markets also rallied, 0.8% and 1.7% respectively, with the German Government announcing a massive EUR$9 billion bailout of Lufthansa (LHR), in which they will take a 20% equity stake and board positions.

The rally was widespread in Australia with the likes of Boral Ltd (ASX: BLD) up 5% and Webjet Limited (ASX: WEB) over 13% as lockdowns continue to ease. Frankly, I’d suggest the valuations of many retail-focused companies may be getting ahead of themselves in the lead up the end of the financial year.

One of the more interesting phenomena’s in recent weeks has been the continued rally of gold prices despite improving sharemarkets, likely stoked by concerns over money printing.

Featured video: what is the Dow Jones?

Economic outcomes

German GDP contracted in line with expectations, falling 2.2% for the quarter, with the European powerhouse economy entering a recession. However, a spike in business confidence following staged re-openings bodes well for the recovery.

The Chinese Government dropped their currency, the Yuan, to the lowest rate against the US since 2008, a move that will be highly concerning to the White House who is seeking to devalue the US Dollar in order to stoke exports. Global sensation Tik Tok, which is owned by Chinese giant Bytedance announced a tenfold increase in revenue as numerous celebrities jump onto the platform.

The upcoming global Russell Index rebalancing is likely to be a busy one, with Barron’s reporting that some 200 stocks will move into and out of the benchmark in June, with video conferencing app Zoom and private equity firm KKR key beneficiaries.

Retail recovery

Upstart payments provider Tyro Payments (ASX: TYR) continued its weekly market updates and showed signs the consumer may be turning a corner. Its sales were down only 18% on the same time last May whilst year-to-date sales were still up 17% on 2019 at $18 billion.

Almond farmer Select Harvest (ASX: SHV) fell 12% after announcing a 13% fall in profit. This was primarily due to weaker prices and the well-publicised increase in water costs, which have since abated.

Credit collection remains an unmastered business in Australia with Collection House (ASX: CLH) and Pioneer Credit (ASX: PNC). However, Credit Corp Ltd (ASX: CCP) rallied on Monday, up 9%. In my view, the whole sector should be avoided as we enter an extremely difficult trading environment.

Finally, Ramsay Healthcare (ASX: RHC) closed their share purchase plan, with the shares now trading at a 23% premium to the issue price.

If you’re looking for popular stories to read next, try these:

The daily report is written by Drew Meredith, Financial Adviser and Director of Wattle Partners.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

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.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. 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. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian-owned.

feedback-icon

What can we do better?

Howdy, ASX investor.

I really care about your experience today.

Please, let me know if you have any suggestions we can use to improve our site and help others invest in ETFs. 

Cheers! 

Owen Rask