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  • Bond Markets Have a Trillion Reasons to Brace for Super Thursday

    Bond Markets Have a Trillion Reasons to Brace for Super Thursday(Bloomberg) — After a record-breaking week with a market milestone reading one trillion euros, European investors are getting ready for a busy Thursday that could feature the same number.That’s when the European Central Bank will dish out cheap loans to banks, with take-up expected to reach the eye-catching amount. The ECB sweetened terms of its so-called TLTROs in April, in an effort to boost lending and further ease stress in Europe’s money markets.Such take-up would come soon after last Tuesday’s bond bonanza, when almost 32 billion euros ($36 billion) of sovereign debt was sold. It took Europe’s primary market issuance to over one trillion euros this year — a milestone passed 12 weeks faster than in 2019 — as governments rushed to fund their ever-increasing stimulus packages in an effort to avert the threat of economic depression from the coronavirus.Two other major monetary policy institutions also have Thursday announcements.The Bank of England is expected to announce an increase of 200 billion pounds to its bond-buying stimulus, taking it to 845 billion pounds, according to Citigroup Inc, given the BOE’s current round of ammunition will run out in July at the current pace of buying. Further out, the bank also sees policy makers easing rates to zero in November, with tentative cuts to sub-zero territory possible next year.The Swiss National Bank looks likely to buck the trend for largess by refraining from extending stimulus and keeping rates on hold.Political developments are also in prospect, with the European Union’s leaders meeting to discuss a 750-billion-euro recovery fund, in what could prove to be another landmark moment for the bloc’s response to the crisis.Also Next Week:Euro-area bond sales are scheduled from Germany, which will sell a new 10-year note, as well as France and Spain, and are set to total around 21 billion euros for the week, according to Commerzbank AG.Portugal may sell debt through banks as it will pay bond redemptions of 8 billion euros. Italy will also pay almost 16 billion euros of redemptions and make small coupon payments.The U.K. will hold four regular gilt auctions for a combined 11 billion pounds and buy back bonds at a steady rate of 1.5 billion pounds per operation.Data for the coming week in the euro area and Germany is mostly relegated to second-tier, backward-looking figures, with the exception of German ZEW survey figures for JuneThe U.K. data slate picks up with May inflation, retail sales and government borrowing numbers garnering most of the attention aside from the BOE announcementIgazio Visco on Tuesday is the sole ECB speaker scheduled next week; ECB publishes its economic bulletin ThursdayBOE Governor Andrew Bailey will not hold a press conference after Thursday’s interest-rate decision and there are no further policy makers scheduled to speakThere are no major sovereign rating reviews next FridayFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • You could beat the market in the 2020s with these ASX healthcare shares

    healthcare shares

    Over the last five years the healthcare sector has been one of the best performing areas of the share market.

    During this time the S&P/ASX 200 Health Care index has gained more than 125%. This has vastly outperformed the S&P/ASX 200 Index (ASX: XJO) which is only up 7.5% over the same period (excluding dividends).

    While I doubt this level of outperformance will continue over the next five years, I believe the healthcare sector is still very well-placed to beat the market.

    Especially given the increasing demand for healthcare services due to ageing populations, increased chronic disease burden, and product and technological developments.

    In light of this, I think having exposure to the healthcare sector would be a very smart move. Here are two ASX healthcare shares that I would buy:

    CSL Limited (ASX: CSL)

    The first healthcare share to consider buying is CSL. It is one of the world’s leading biotherapeutics companies and has a portfolio of life-saving therapies and vaccines. In addition to this, CSL invests heavily in research and development. This investment means it has a large number of therapies in its pipeline that have the potential to generates significant sales over the next decade. Combined, I believe CSL is well-positioned to continue growing its earnings at a solid rate throughout the 2020s.

    ResMed Inc. (ASX: RMD)

    Another healthcare share to consider buying is ResMed. It was a very strong performer over the 2010s and I feel confident it can repeat this throughout the 2020s. This is due to the medical device company’s focus on the sleep treatment market. The proliferation of obstructive sleep apnoea is driving increasing demand for masks and software solutions. Given the quality of its offering and its wide distribution network, I believe it is well-placed to capture this growing demand and deliver strong earnings growth this decade.

    And named below are more top shares which I think could beat the market over the next decade…

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    Learn More

    *Extreme Opportunities returns as of June 5th 2020

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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 CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. 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.

    The post You could beat the market in the 2020s with these ASX healthcare shares appeared first on Motley Fool Australia.

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  • How to earn $50,000 in dividends each year with ASX shares

    Young female investor holding cash

    When it comes to dividends, many investors will look for shares which offer above-average yields.

    While this is completely fine if you’re in need of an immediate source of income (especially in this low interest rate environment), it may not be the best way to invest in dividend shares.

    If you have time on your side, then I believe you should be looking at shares that pay dividends and have the potential to grow strongly over the next decade and beyond.

    To demonstrate why, I’m going to compare a couple of shares.

    Comparing dividend shares.

    Let’s start with Commonwealth Bank of Australia (ASX: CBA). I think Australia’s largest bank is a great option right now for investors that are looking for immediate income.

    I estimate that its shares offer a forward fully franked yield of approximately 5.2%. However, if you’re not in need of income right now, it may not be the share to buy.

    This is because if we were to jump ahead by 10 years, I don’t believe the yield on offer will be vastly superior to what it is today.

    Next year I suspect the bank will cut its dividend down to approximately $3.70 per share. If it were to then grow this dividend by an average of 5% per annum for the following 10 years, in 2031 Commonwealth Bank would be paying a $6.03 per share dividend.

    This equates to a yield on cost (the yield on the price you paid for the shares) of ~9%. While this is a generous yield, I think we can do better.

    How can we do better?

    One share that I think could be a future dividend star is ecommerce company Kogan.com Ltd (ASX: KGN).

    Next year I expect Kogan to pay a 30 cents per share dividend. This equates to a fully franked 2.3%. While this isn’t anywhere near as good as Commonwealth Bank’s yield, I believe it could overtake it in time.

    Given Kogan’s extremely positive outlook thanks to its increasingly popular website, acquisition plans, and the seismic shift to online shopping, I believe it is well-placed to grow both its earnings and dividends at a strong rate over the next decade.

    My bull case is for Kogan to grow its earnings and dividends by an average of 20% per annum between 2021 and 2031.

    If this proves accurate, then Kogan’s dividend would have grown to 185.7 cents by the end of FY 2031. At that point, if you bought shares today, you would have a yield on cost of approximately 14.1%.

    But why stop there? If we then assume that it can continue growing its dividend by 7.5% per annum for the following 10 years, by FY 2041 its dividend would have grown to approximately 383 cents per share. This represents a yield on cost of 29%.

    This means that $172,000 invested in Kogan’s shares today, could be generating dividends of $50,000 in 2041.

    Foolish Takeaway.

    I believe this demonstrates why some of the best dividend shares could actually be the ones with the lowest yields.

    This could make it well worth considering a long term investment in Kogan and also tech shares such as Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

    All three look exceptionally well positioned to deliver long term growth and could increase their dividends materially over the next two decades if all goes to plan.

    And here are more top shares which look like future stars…

    5 ASX stocks under $5

    One trick to potentially generating life-changing wealth from the stock market is to buy early-stage growth companies when their share prices still look dirt cheap.

    Motley Fool’s resident tech stock expert Dr. Anirban Mahanti has identified 5 stocks he thinks are screaming buys. And you can buy them now for less than $5 a share!

    Learn More

    *Extreme Opportunities returns as of June 5th 2020

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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 Altium. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of Appen 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.

    The post How to earn $50,000 in dividends each year with ASX shares appeared first on Motley Fool Australia.

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