It was another incredibly volatile week for Australian investors. Concerns over the spread of the coronavirus and its impact on the global economy weighed heavily on investor sentiment.
This led to the S&P/ASX 200 Index (ASX: XJO) recording a disappointing 10.9% decline to close the week at 5,539.3 points.
Will things be better next week? Here are a few things to watch:
Wall Street rebounds.
The S&P/ASX 200 could start the week on a positive note on Monday after Wall Street rebounded incredibly strongly on Friday night. The Dow Jones jumped 9.4% higher, the S&P 500 index raced 9.3% higher, and the Nasdaq index stormed 9.4% higher. Current SPI futures are pointing to the S&P/ASX 200 Index opening the week 61 points higher. Wall Street rallied after President Trump declared a state of emergency. This has sparked hopes of bigger fiscal stimulus from the U.S. government and others around the world.
Premier Investments results.
The Premier Investments Limited (ASX: PMV) share price will be one to watch next week. It is pencilled in to release its half year results on Friday. All eyes will be on the progress of its Smiggle expansion. In FY 2019 Smiggle’s capital-light global expansion plan started incredibly well and was outperforming management’s expectations. The strategy has seen the company pivot away from opening stores to concessions in department stores such as Selfridges and Harrods.
Shares going ex-dividend.
A number of popular ASX 200 shares are due to go ex-dividend next week and could trade lower. This includes shipbuilder Austal Limited (ASX: ASB) on Monday, auto listings company Carsales.Com Ltd (ASX: CAR) on Wednesday, and casino and resorts operator Crown Resorts Ltd (ASX: CWN) and building products company Fletcher Building Limited (ASX: FBU) on Thursday.
Cochlear rated as a sell.
The Cochlear Limited (ASX: COH) share price will be one to watch next week after Goldman Sachs reiterated its sell rating. The broker notes that Cochlear has recently cut its guidance because of a decline in elective surgeries in China due to the coronavirus. Goldman Sachs believes the ongoing uncertainty in all other markets has the potential to lead to far more material guidance revisions as and when the environment begins to stabilise. As a result, it has downgraded its FY 2020 earnings estimate to $246 million. This compares to Cochlear’s guidance of $270 million to $290 million. Goldman has cut its price target to $197.00.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited and Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited and Premier Investments Limited. The Motley Fool Australia has recommended carsales.com Limited and Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
