The ASX 200 (ASX: XJO) opened up but is now 0.8% down, a reversal of around 1.3%, on trade deal fears.
The trade deal worry
According to reporting by Fox News, White House trade adviser Peter Navarro has said that President Trump has decided to terminate the China trade deal.
The trade war between the US and China has been a feature of most of Donald Trump’s presidency. The President has had a couple of setbacks over the past week or so including a lower-than-expected turnout at a rally in Tulsa and the release of John Bolton’s book which had several negative revelations about White House dealings.
Woolworths (ASX: WOW) update
In an update, the supermarket giant said in the FY20 fourth quarter for the 10 weeks ending 14 June 2020, Australian Food sales are up 8.6%, New Zealand Food sales (in NZ dollar terms) are up 15.1%, Big W sales are up 27.8% and Endeavour Drinks sales are up 21.4%.
Woolworths is expecting FY20 EBIT (after AASB 16, but before significant items) of $3.2 billion to $3.25 billion. Woolworths disclosed that FY19’s EBIT on a comparison basis (and on a 53-week basis) was $3.29 billion. Hotels EBIT is expected to be between $160 million and $170 million in FY20, compared to $355 million in FY19.
Woolworths also announced plans to develop an automated regional distribution centre and a semi-automated national distribution centre in Sydney. Construction is expected to completed by 31 December 2023. Initial benefits will be realised in FY25.
Woolworths expects to invest $700 million to $780 million on the technology and fit out. It has signed an initial lease term of 20 years with Qube (ASX: QUB). It’s expected to significantly reduced supply chain costs over time and deliver strong returns above the cost of capital.
Woolworths shares are currently down 1.6%.
Cromwell (ASX:CMW) partial takeover offer
Cromwell’s biggest shareholder called ARA wants to buy 29 Cromwell shares for every 100 owned shares at $0.90 per share.
ARA already owns a 24% stake in Cromwell and wants to increase its holding up to 49% if this $520 million proportional takeover offer is successful.
The property business said that shareholders are advised to “take no action”.
Cromwell shares are currently up 4%.
Harvey Norman (ASX: HVN) has impressed the market again
The company recently gave a sales update to the market and declared a special dividend.
Today, Harvey Norman has released profit news for FY20.
Unaudited preliminary accounts for the period from 1 July 2019 to 31 May 2020 indicate that profit before tax and non-controlling interest, but excluding the AASB16 Leases net impact and net property revaluation adjustments increased 20% compared to last year.
In other words, Harvey Norman’s normal profit before tax was up 20% for the first 11 months of FY20 compared to the first 11 months of FY19.
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