Last ASX 200 weekly wrap, we discussed how the S&P/ASX 200 (INDEXASX: XJO) had its worst week since the GFC over a decade ago. While last week's market moves weren't quite as dramatic or headline-friendly, we still had a week of losses across the ASX boards, despite some mid-week gyrations.
One week ago, the ASX 200 index was sitting at 6,438.9 points. By the close of the market on Friday, we instead saw 6,216.2 points – a weekly drop of 3.46%. Compared to the previous week's 9.77% drubbing, last week's market moves felt almost tame.
But the continuation of this stock market 'correction', which has now completed its second week, is the real story here, in my view. Last week saw the first cut in interest rates (a 25 basis point cut) from the Reserve Bank of Australia (RBA) since October 2019 – leaving the cash rate at a new record low of just 0.50%.
And that came just before the US Federal Reserve announced a cut of its own – a 50 basis point slash that leaves the American target rate at 1–1.25% range. It was the biggest move by the Fed since the GFC in 2008. The initial trigger of this correction – the coronavirus outbreak – is a growing global health crisis and both the RBA and Fed's moves this week indicate the seriousness that central bank governors around the world are now assigning to the current situation.
ASX shares are now down over 13.5% from the previous record high that was set 3 long weeks ago, and with another interest rate cut seemingly not doing much to assuage the concerns of the markets, it's hard to tell how this week will fare.
How did the markets end last week?
A mentioned above, the ASX 200 index was down another 3.46% for the week to 6,216.2 points.
Meanwhile, the ALL ORDINARIES (INDEXASX: XAO) index also recorded a 3.28% loss for the week – falling from 6,501 points on Monday to 6,287.5 points on Friday.
Monday saw a very mild fall, while Tuesday observed a brief moment of respite when the ASX actually recorded a day in the green, breaking the previous red loss streak of 6 days. Thursday also saw a day in the green, but by Friday, the week's losses had been codified.
Meanwhile, the week also saw a renewed interest in the safe haven of gold – with the precious metal now asking over US$1,660 an ounce. The Aussie dollar also continues to hover at decade lows of around 66 US cents.
Which ASX shares were the biggest winners and losers?
Although there weren't too many winners coming out of the ASX last week, here are the top 4:
Chorus Ltd (ASX: CNU) makes the green list for the second week in a row. It seems investors aren't letting the macro trends undermining the broader share market get in the way of this company's recent positive guidance. Chorus shares are now up 21% over the past month.
Investors are also seemingly not too worried about the fortunes of agricultural company Elders Ltd (ASX: ELD), which has seen its shares continue a recent run and are now trading close to all-time highs.
Saracen Mineral Holdings Limited (ASX: SAR)'s moves can likely be put down to the rising price of gold.
But it's the TPG Telecom Ltd (ASX: TPM) share price that deserves a mention. This week, the ACCC confirmed it would not be appealing the Federal Court's decision to allow TPG and Vodafone to merge their Australian operations – explaining the rocket under the TPG share price.
This is likely to result in a dialled up ASX telecom company with more firepower and market reach. Perhaps TPG's gain is Telstra Corporation Ltd (ASX: TLS)'s pain – Telstra shares are down nearly 9% over the past month.
And now for the losers:
It's no surprise to see the ASX's resident travel stocks Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT) leading the bleeders last week once again. The coronavirus situation is no doubt hurting these companies the most as governments around the world extend travel bans.
Meanwhile, Hub24 Ltd (ASX: HUB) appears to be the victim of the RBA's interest rate cut, with investors marking down the investing 'hub' provider for the smaller returns a lower cash rate is likely to bring.
What is this week looking like for the ASX?
It will be an interesting week to watch – both for our own ASX shares and markets around the globe. Now that the interest rate cats are out of the bag, it's possible that investors won't have too much more positive news to look forward to, which could continue to weigh on the market's shoulders.
A notable development last week was the savage sell-off of the ASX banks – which were let off the hook somewhat the previous week. Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) all knocked up (or perhaps down) significant losses.
CBA was down around 8.75% last week. Westpac is now trading at its lowest levels in 8 years after an 8.13% drop. ANZ is down 9.33%, while NAB is at its lowest levels since the GFC after a nasty 10.57% drop.
You can see these share prices, plus some of the other ASX blue-chips and how they're faring in the table below.
And finally, here is the lay of the land for some leading market indicators:
- S&P/ASX 200 at 6,216.2 points
- ALL ORDINARIES at 6,287.5 points
- Gold is asking US$1,673.85 per troy ounce
- Brent crude oil is trading at US$45.27 a barrel
- Australian Dollar buying 66.45 US cents
Foolish takeaway
It remains an uncertain world for investors as we start the new week. Interest rate cuts last week appear to have stoked concern rather than confidence for global markets, and all eyes will continue to rest on the spread of COVID-19.
My advice for these difficult times remains the same: invest with the same principles that have guided previous success and don't succumb to fear. There are many, many top-quality ASX companies that in all likelihood won't be permanently damaged from the fallout around this virus. Finding those at a good discount is a great place to start the week!
