On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week in style. The benchmark index rose 2% to 8,804 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set for a decent start to the week following a solid finish to the last one on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 39 points or 0.45% higher. In the United States, the Dow Jones was up 0.7%, the S&P 500 rose 0.5%, and the Nasdaq climbed 0.3%.

Oil prices tumble

ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) will be on watch after oil prices tumbled on Friday night. According to Bloomberg, the WTI crude oil price was down 3.2% to US$84.88 a barrel and the Brent crude oil price was down 3.4% to US$87.33 a barrel. Reports that the US and Iran are on the verge of signing a peace deal could put further pressure on oil prices in Asian trade.

SpaceX takes off

Space Exploration Technologies Corp (NASDAQ: SPCX) had a very successful IPO on Friday. The space, satellite broadband, and AI company’s shares jumped 19% to end at US$160.95. This leaves Elon Musk’s SpaceX with a US$2.1 trillion valuation and makes him the world’s first trillionaire.

Gold price jumps

ASX 200 gold shares including giants Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a great start to the week after the gold price jumped on Friday night. According to CNBC, the gold futures price was up 3% to US$4,238.8 an ounce. Falling oil prices have eased inflation concerns and interest rate hike bets.

Buy SEEK shares

Bell Potter thinks Seek Ltd (ASX: SEK) shares are still good value despite cutting its valuation this morning. According to the note, the broker has retained its buy rating with a reduced price target of $18.60 (from $23.60). It said: “We maintain our Buy; SEK is our preferred rate-sensitive classifieds exposure looking through to a dovish RBA tilt, given the diversification in CAR and policy-impacted earnings outlook for REA. Our Target Price is reduced to $18.60sh through earnings changes and an increase in our WACC to 10.3% (prev. 10.2%), a reduction our Growth Fund valuation via Coursera and an increase in Fund discount rate to 30% (prev. 20%) on visibility in PortCo operating performance in an AI-enabled environment. SEK’s underlying proprietary data (~750m points per day) partially consists of traffic meta data which is unable to be scraped by third parties, is valuable for targeted job placements, should support yield through soft volume environments.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Tomorrow the Reserve Bank of Australia will make its call on the cash rate, which currently sits at 4.35%. 

The RBA has raised the cash rate three times already in 2026. 

Why is the cash rate influential for ASX shares?

For the average punter, the cash rate target affects how much Australians pay to borrow money and how much they earn on savings. 

When the cash rate goes up, mortgage repayments and loan costs usually increase, while savings accounts often pay more interest.

When the cash rate goes down, borrowing becomes cheaper, which can boost spending and help support the economy.

The RBA cash rate can also significantly influence share prices on the S&P/ASX 200 Index (ASX: XJO) and the broader Australian share market.

When rates rise, borrowing becomes more expensive for companies and consumers, which can reduce profits and spending. This often puts downward pressure on share prices, especially for growth companies.

When rates fall, businesses and households can borrow more cheaply, which may boost profits and economic activity. Investors may also move money from low-yield savings accounts into shares, supporting stock prices.

While it’s not always the case, generally, higher rates tend to be a headwind for shares, while lower rates are generally supportive of the share market.

What are the big four banks expecting tomorrow?

Experts and economists are expecting tomorrow’s RBA meeting to result in a hold of the cash rate. 

This is supported by the big four banks, who also expect a rate hold this month. 

Taylor Nugent, senior economist at NAB, said (via Reuters) that the chance ​of a move at the June meeting is very low. 

He commented:

The RBA has now recalibrated policy and we’re seeing evidence it was enough to get on top of domestically driven inflation pressures. That means the RBA can ​sit and hold from here while it assesses risks to inflation and growth coming out of the conflict in ​the Middle East.

According to Canstar, there are differing opinions on the long-term outlook from the big four banks. 

Westpac believes there will be further hikes to come in the back half of 2026, while the other major banks expect the next change to be cuts in 2027. 

What does a hold mean for ASX bank shares?

It has been a tough year so far for ASX bank shares. 

At the time of writing, year to date: 

• Commonwealth Bank Of Australia (ASX: CBA) shares are down 1%
• National Australia Bank (ASX: NAB) is down nearly 14%
• Westpac Banking Corporation (ASX: WBC) is down 10%
• ANZ Group (ASX: ANZ) shares have fallen 6%. 

At current valuations, bank shares are viewed as already trading at a premium.

However, a hold decision (on the cash rate) could provide some optimism that the worst is over. 

The RBA’s commentary around this decision is likely more important than the decision itself. 

A hold with a dovish outlook (hinting at future cuts) will likely support the broader market. 

However a hold with a hawkish outlook (tipping further hikes) could put more downward pressure on bank shares. 

The post What are the big four banks expecting at tomorrow’s RBA cash rate meeting? appeared first on The Motley Fool Australia.

More reading

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• How many NAB shares do I need to buy for $10,000 of passive income?
• Here’s what Westpac says the RBA will do with interest rates next week
• 5 ASX shares for a winning retirement portfolio

Motley Fool contributor Aaron Bell has positions in National Australia Bank. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX dividend stock GQG Partners Inc (ASX: GQG) has seen its share price sink approximately 50% since July 2024, as shown in the chart below. This low valuation makes me think it’s a great time to invest.

GQG is a fund manager that provides clients with exposure to four key strategies: international shares (excluding US shares), emerging markets, global shares, and US shares.

Funds management businesses can be very volatile because their profits (and, subsequently, share prices) are closely linked to movements in the overall share market, which in turn influences funds under management (FUM).

Let’s take a look at why I think this could be a compelling time to look at the ASX dividend stock.

Excellent ASX dividend stock credentials

I’m not expecting the business to grow its dividend every year, particularly this year. But, pleasingly, it did increase its dividend each year between 2022 and 2025. Ongoing growth of FUM will be essential for noticeable dividend growth in the future.

Even so, its current quarterly dividend is so large that I think this makes it very attractive.

The ASX dividend stock’s latest quarterly dividend, which will be paid later this month, is AU 4.878 cents per share. That quarterly dividend by itself is a 3.27% dividend yield, at the time of writing. Annualised, that dividend yield is 13% if it repeats that payout over the next year.

The business is paying around 90% of its distributable profit to shareholders each quarter. That means investors are being rewarded with most of the profit, but a little is still kept to strengthen the company for the future.

Any business with a double-digit yield could be very compelling for passive income.

Why this is a good time to invest in GQG shares

I think that funds management businesses are notoriously cyclical, so it could be an effective choice to be contrarian.

GQG has seen FUM outflows in recent times, but these appear to be reducing, and if its fund performance returns to prior strength, this could protect existing FUM and help attract new FUM.

The ASX dividend stock now seems to be trading at a very cheap valuation. At the time of writing, it appears to be trading at less than 7x its current annualised distributable profit.

Even if there are ongoing FUM outflows, longer-term investment performance could help grow FUM, profit, and the dividend. If FUM outflows stabilise, then it could look significantly undervalued, in my opinion.

But, GQG isn’t the only ASX dividend stock that looks attractive to buy right now.

The post 1 ASX dividend stock down 50% I’d buy right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Major ASX blue-chip shares can be a great source of passive income thanks to their dividend yields, including the franking credits.

Dividend yields can be very compelling through a mixture of having a high dividend payout ratio and a relatively low valuation.

Let’s look at two appealing ASX blue-chip shares with attractive dividend yields.

Origin Energy Ltd (ASX: ORG)

Origin describes itself as one of Australia’s leading energy retailers, supplying electricity, natural gas, LPG and solar.

It also has a variety of ways to generate power, including coal, natural gas, wind and solar. On top of that, Origin is a gas producer and explorer. Origin also owns a stake in utility software business Kraken and European energy supplier Octopus Energy.

The business trades on a relatively low price/earnings (P/E) ratio following a drop of more than 10% since the 2026 high in April. According to the projection on Commsec, the business is trading at less than 15x FY26’s estimated earnings.

Thankfully, with the ASX blue chip-share’s forecast dividend for FY26 and FY27, the dividends could be large. But, it’s important to remember that energy prices can be volatile sometimes.

The forecast on Commsec suggests the business could pay an annual dividend per share of 60 cents in FY26 and 70.5 cents per share in FY27.

That means the grossed-up dividend yield could be 7.7% in FY26 and 9% in FY27, including franking credits, at the time of writing.

WAM Income Maximiser Ltd (ASX: WMX)

This is a relatively new listed investment company (LIC) that invests in a mixture of ASX blue-chip shares and bonds (debt, with the LIC’s exposure having attractive credit ratings on average).

On the equity side of the portfolio, some of its portfolio positions at the end of May included BHP Group Ltd (ASX: BHP), Goodman Group (ASX: GMG), JB Hi-Fi Ltd (ASX: JBH), Rio Tinto Ltd (ASX: RIO) and Transurban Group (ASX: TCL).

By mixing shares and debt, it can provide investors with a solid mixture of stability and yield. As a bonus, it pays a dividend every single month, giving investors very consistent income.

It has guided that its monthly dividend in September 2026 will be 0.65 cents per share. That translates into an annualised grossed-up dividend yield of 6.8%, including franking credits, at the time of writing.

I’m not sure how strong the portfolio’s future returns will be, but it has started with a strong year or so of performance from its portfolio that’s focused on ASX blue-chip shares.

These aren’t the only shares I’d buy for dividend income, though.

The post 2 ASX blue-chip shares offering big dividend yields appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group. The Motley Fool Australia has recommended BHP Group and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I always have an eye out for ASX dividend stocks which pay reliable passive income to their shareholders.

Sometimes I like to investigate the ASX stocks which pay the most regular dividend. Other times, it’s the ones which pay the highest dividend yield, or have paid out over the longest period of time.

But what about the ASX stocks which have a history of doing all three?

Here are two ASX stocks which have continually raised their regular dividend payment over the past decade (or more).

Washington H. Soul Pattinson and Company Ltd (ASX: SOL)

Soul Patts is widely regarded as Australian dividend royalty.

The diversified Australian investment house paid dividends to its shareholders every year since it listed on the ASX in 1903. 

What’s more, the ASX stock has raised that dividend payment every single year since 1998. That’s 28 years of continually raising dividend payments.

Soul Patts historically pays its fully-franked dividends twice per year in May and a final dividend in December. It occasionally also pays shareholders an additional special dividend.

In FY25, the company paid a total of $1.03 per share, fully franked. 

For the first half of FY26, Soul Patts paid a fully-franked interim dividend of 48 cents per share which was a 9.1% increase on the prior corresponding period. 

Based on its last two payouts, the ASX stock has a grossed-up dividend yield of around 2.5%, including franking credits, at the time of writing.

Charter Hall Group (ASX: CHC)

Charter Hall has been paying shareholders a partially or fully-franking dividend payment twice per year since 2006. This payment has been raised every year since 2010.

That’s a 16-year run of continually raising its dividend payment for investors.

In FY25, the property investment and funds management business paid its shareholders a total of 48 cents per share, up from 45 cents per share in FY24, partially franked.

The ASX stock paid an interim dividend of 24.8 cents for the forest half of FY26 and it forecast to pay a total dividend of around 50 cents for the full financial year. That translates to a forward dividend yield of around 2.3% at the time of writing.

The business has been attracting strong capital inflows and recently upgraded earnings guidance, which supports future distribution growth.

In a guidance update last month, Charter Hall said it anticipates ongoing demand for commercial property, driven by rising institutional allocations, attractive yields, and recent changes to residential property tax rules. This is great news for its shareholders. 

The post 2 ASX stocks that have continually raised dividends for 10+ years appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was a busy week for Australia’s top brokers. This has led to a number of broker notes being released.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

ANZ Group Holdings Ltd (ASX: ANZ)

According to a note out of Citi, its analysts have retained their buy rating on this banking giant’s shares with a reduced price target of $39.25. The broker has been looking closer at potential impacts from proposed housing tax changes. Citi suspects that the changes could be a negative for the big four banks by slowing credit growth. As a result, it has adjusted its estimates to reflect this. The good news is that Citi believes mortgage growth will moderate more than business lending growth, which leaves ANZ, with its strong business franchise, better positioned to handle the slowdown. In light of this, the broker has named ANZ as its preferred major bank at present. The ANZ share price ended the week at $34.17.

CSL Ltd (ASX: CSL)

A note out of UBS reveals that its analysts have retained their buy rating on this biotechnology giant’s shares with a trimmed price target of $158.00. UBS is feeling more positive on the company’s outlook, believing that this year could mark the low point for CSL’s earnings. It highlights that cost savings from the company’s transformation program and lower plasma costs following a shift in collections could support its earnings growth in FY 2027. So, with the CSL share price trading at a discount to peer multiples, UBS thinks now could be a good time for investors to buy shares. The CSL share price was fetching $107.51 at Friday’s close.

WiseTech Global Ltd (ASX: WTC)

Analysts at Bell Potter have retained their buy rating on this logistics software company’s shares with a trimmed price target of $71.75. According to the note, the broker believes that WiseTech could be having a bit of difficulty moving some of its large customers over to the new CargoWise Value Packs this financial year. In light of this, Bell Potter has reduced its CargoWise revenue forecasts in the short to medium term. However, the broker remains positive and highlights that its price target is a significant premium to the current share price. It also believes the lack of progress with CargoWise Value Packs is already reflected in the share price as well as the risk of a revenue result at the low end of guidance. The WiseTech Global share price ended the week at $37.50.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in CSL and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When sharemarkets look choppy, many investors turn to Oracle of Omaha Warren Buffett for investment advice.

After all, Warren Buffett spent more than 60 years navigating crashes, recessions, and market volatility to become one of the richest people in the world. 

His investing wisdom boils down a few key philosophies: rational decision-making, patience to hold stock long-term, and picking high-quality businesses.

With that in mind, there are three ASX stocks which I think look like they align with Warren Buffett’s investment strategy.

Transburban Group Ltd (ASX: TCL)

One of the key qualities that Warren Buffett looks for when making an investment is a competitive advantage that protects the company’s long-term market share and profitability.

A great example of this is global infrastructure business Transurban. The company builds and operates major urban toll road networks, tunnels, and bridges and operates 22 assets across Australia, the US, and Canada.

Transurban benefits from a defensive quality because its services are essential. Even in the event of a downturn, people still need to travel to work or transport goods and services. Transurban’s toll roads typically have stable traffic volumes year-round, which means the business enjoys resilient cash flow regardless of economic conditions. 

Another bonus is that most of its toll roads are on an annual contract. This means Transurban is able to increase its toll prices each year in line with rising inflation. 

Wesfarmers Ltd (ASX: WES)

Warren Buffett famously prefers businesses with a strong history, trusted management, reliable long-term profit growth. 

Wesfarmers embodies all three of these things. The company is well-established and financially sound with a history of reliable growth and stability. 

It also owns major brands across several different industries, including Kmart, Bunnings and Priceline and continually focuses on expanding its markets, product categories and digital capabilities to drive long-term growth. 

It’s this stability and consistent long-term net profit growth that make Wesfarmers stand out amongst other ASX blue-chip stocks.  

Xero Ltd (ASX: XRO)

Xero doesn’t offer the long-standing history or defensive nature of Wesfarmers or Transurban, but I think its sticky business model and recurring subscription revenue is something Warren Buffett would approve of.

The nature of the business means its customers are likely to keep paying for its services and products over a long time. And that translates to a reliable long-term revenue stream.

At the same time, the ASX tech stock still has a relatively small market position, suggesting there is potential to unlock significant growth. 

The company is actively expanding its product suites, such as payroll and workflow automation, and also its global presence in the UK and the US.

The post 3 ASX stocks that look like classic Warren Buffett investments appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group, Wesfarmers, and Xero. The Motley Fool Australia has positions in and has recommended Transurban Group and Xero. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Want to invest for the next decade?

ASX exchange traded funds (ETFs) can be a simple way to get exposure to long-term trends without having to pick every individual winner yourself.

Here are three quality ASX ETFs that could be worth buying and holding until 2036 and were recently recommended by Betashares:

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

The first ASX ETF to look at is the Betashares Global Robotics and Artificial Intelligence ETF.

This fund gives investors exposure to companies involved in robotics, automation, artificial intelligence, and related technologies. Its holdings include ABB (SWX: ABBN), Keyence Corp (FRA: KEE), and NVIDIA (NASDAQ: NVDA).

What makes this fund interesting is that it is not just about AI software. It also gives investors exposure to the physical side of automation.

Factories, warehouses, hospitals, logistics networks, and manufacturers are all looking for ways to become more efficient. Robotics and automation can help with labour shortages, productivity, safety, and precision.

That gives the fund a long runway if more businesses keep investing in machines, sensors, chips, and intelligent systems.

Betashares Video Games and Esports ETF (ASX: GAME)

Another ASX ETF that could be worth a closer look is the Betashares Video Games and Esports ETF.

This fund invests in global companies linked to video games and interactive entertainment. Its holdings include NetEase (NASDAQ: NTES), Take-Two Interactive (NASDAQ: TTWO), and Nintendo (FRA: NTO).

Gaming is no longer a small niche. It has become a major form of global entertainment, sitting alongside streaming, social media, sport, and film in the battle for consumer attention.

Nintendo is a useful example of the type of business this fund can own. It has some of the world’s most recognisable gaming franchises, a loyal customer base, and a history of creating hardware and software ecosystems that keep players engaged.

Betashares Global Quality Leaders ETF (ASX: QLTY)

A third ASX ETF to consider is the Betashares Global Quality Leaders ETF.

This fund focuses on global companies with strong quality characteristics. Its holdings currently include Lam Research (NASDAQ: LRCX), Netflix (NASDAQ: NFLX), and Uber Technologies (NYSE: UBER).

This is a different type of long-term investment. Rather than targeting one specific theme, the fund looks for companies with strong financial profiles, including profitability, balance sheet strength, cash generation, and earnings stability.

Lam Research is a good example of the type of global business inside the portfolio. The company supplies equipment used in semiconductor manufacturing, which makes it important to the production of advanced chips.

That gives it exposure to demand from areas such as AI, cloud computing, smartphones, data centres, and industrial technology.

The post 3 quality ASX ETFs to buy and hold until 2036 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Abb, Lam Research, Netflix, Nintendo, Nvidia, Take-Two Interactive Software, and Uber Technologies. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended NetEase. The Motley Fool Australia has recommended Lam Research, Netflix, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The big four S&P/ASX 200 Index (ASX: XJO) bank stocks have delivered underwhelming results so far in 2026.

But their performance could be set to get even worse.

Commonwealth Bank of Australia (ASX: CBA) shares have performed the best of the big four ASX 200 bank stocks year to date, recently down 0.2% in 2026. That outpaces the 1.3% losses posted by the benchmark index over this same period.

ANZ Group Holdings Ltd (ASX: ANZ) shares have had a more difficult run, recently down 5.6% for the year.

Rounding off the list, Westpac Banking Corp (ASX: WBC) shares were recently down 9.6% in 2026, while National Australia Bank Ltd (ASX: NAB) trails the pack with a 15.1% share price loss.

The banks have all faced headwinds from three consecutive RBA interest rate hikes this year. Coupled with ongoing inflationary pressures and the Federal Budget’s expected changes to negative gearing policies for residential homes, this could lead to materially lower demand for mortgage loans as well as increased bad debts.

And it appears a number of hedge funds are looking to take advantage of these mounting headwinds.

Betting against ASX 200 bank stocks ANZ, NAB, Westpac and CBA shares

According to the Australian Securities and Investments Commission (ASIC), hedge funds have roughly doubled their short positions in the big four ASX 200 banks stocks over the past half year to $10.9 billion.

CBA shares are the most shorted among the hedge funds, with Westpac shares coming in at number two.

Firetrail Investments revealed it has held a short position in ANZ, Westpac, NAB and CBA shares since mid-April.

“The big banks are priced to perfection, and any earnings downgrades will be treated pretty harshly. Valuations are very rich for the earnings growth banks are providing,” Patrick Hodgens, Firetrail Investments chief investment officer said (quoted by The Australian Financial Review).

Regal Funds also has a short position in CBA shares.

Explaining the potential mounting headwinds facing ASX 200 bank stocks, Regal Funds portfolio manager Mark Nathan said:

With banks, you always get a multiplier effect. If houses lose a bit of value, people don’t feel as wealthy, they spend less money, they invest less, so you get a multiplier effect with the banks.

That’s the big change since the budget. The market is less comfortable with what was previously a reasonable growth outlook, and downgrading that to a more modest growth outlook.

And Blackwattle Investment Partners’ portfolio manager Joe Koh cautioned that the current $10.9 billion of short bets against ANZ, CBA, NAB and Westpac shares could well grow from here.

According to Koh (quoted by the AFR):

There could be a further wave of selling because offshore hedge funds are waiting for the budget changes to be officially passed, rather than delving into local politics and the risks of last-minute changes.

The post Buying ASX 200 bank stocks like Westpac and CBA shares? Here’s why these funds are betting against you appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX 200 consumer discretionary shares outperformed the 10 other sectors over the shortened trading week, soaring 8.05%.

Consumer staples shares weren’t far behind, surging 7.62%.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) rose 2.07% to 8,804 points by Friday’s close.

Experts are now predicting an eventual cut for interest rates due to crumbling consumer confidence and low GDP growth.

Consumer sentiment fell in May to one of its weakest levels ever in the 50-year history of the benchmark monthly survey.

Softer-than-expected inflation also enhances the case for rates to be kept on hold or cut at some point.

Annual headline inflation fell to 4.2% in April, down from 4.6% in March, according to Bureau of Statistics figures.

On Friday, the ASX 200 rallied 1.98% after US President Donald Trump said a peace deal with Iran could be reached this weekend.

This would likely lead to the reopening of the Strait of Hormuz, a vital shipping route that carries 20% of the world’s oil and gas.

The ongoing oil shock has contributed to resurgent inflation and three interest rate increases in Australia this year.

The Reserve Bank will announce the next interest rate decision on Tuesday.

It may seem counterintuitive that signs of economic weakness boosted ASX 200 retail shares last week.

But remember, share markets tend to look six to 12 months into the future.

Thus, economic weakness today is pushing retail stocks up as investors anticipate a greater likelihood of interest rate cuts.

Let’s see how some individual retail stocks performed last week.

Consumer discretionary shares led the ASX sectors last week

The Wesfarmers Ltd (ASX: WES) share price leapt 9.55% over the short trading week to finish at $86.47.

Shares in gaming technology company Aristocrat Leisure Ltd (ASX: ALL) rose 5.07% to $53.91.

The Lottery Corporation Ltd (ASX: TLC) share price soared 8.81% to $5.68.

The Light & Wonder Inc (ASX: LNW) share price ripped 9.8% higher to $127.26.

JB Hi-Fi Ltd (ASX: JBH) shares ascended 7.6% to finish the week at $77.24.

The Harvey Norman Holdings Ltd (ASX: HVN) share price increased 7.88% to $4.79.

Temple & Webster Group Ltd (ASX: TPW) shares soared 13.09% to $5.27.

The Nick Scali Limited (ASX: NCK) share price rocketed 11.71% to $15.46.

Eagers Automotive Ltd (ASX: APE) shares rose 7.06% to $22.29.

The Super Retail Group Ltd (ASX: SUL) share price lifted 8.39% to $12.27.

Lovisa Holdings Ltd (ASX: LOV) shares surged 8.66% to $22.20 apiece.

ASX 200 travel share Flight Centre Travel Group Ltd (ASX: FLT) edged 0.36% higher to $11.07.

The Guzman Y Gomez Ltd (ASX: GYG) share price lifted 3.63% to $19.40.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the shortened trading week:

S&P/ASX 200 market sector	Change last week
Consumer Discretionary (ASX: XDJ)	8.05%
Consumer Staples (ASX: XSJ)	7.62%
A-REIT (ASX: XPJ)	4.95%
Healthcare (ASX: XHJ)	3.33%
Industrials (ASX: XNJ)	3.23%
Utilities (ASX: XUJ)	2.86%
Communications (ASX: XTJ)	2.51%
Financials (ASX: XFJ)	1.05%
Materials (ASX: XMJ)	0.79%
Energy (ASX: XEJ)	(0.07%)
Information Technology (ASX: XIJ)	(4.58%)

The post Why did ASX 200 retail shares outperform last week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Light & Wonder Inc, Lovisa, Super Retail Group, Temple & Webster Group, The Lottery Corporation, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Harvey Norman and Super Retail Group. The Motley Fool Australia has recommended Eagers Automotive Ltd, Flight Centre Travel Group, Light & Wonder Inc, Lovisa, Temple & Webster Group, The Lottery Corporation, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.