The ASX200 was clobbered 50-points yesterday courtesy of a disappointing result from CBA which plunged over 8% taking a whopping 45-points off the index all on its own – more on this later. The impact of a weak Banking Sector on the ASX was illustrated perfectly by the markets 0.68% decline even when 65% of stocks closed up on the day.
Elsewhere we saw the $A fall to fresh multi-week lows after Australian wage data held no surprises – many were clearly positioning themselves for a strong number in line with the recent surge in inflation. A small win for the RBA but money markets are still pricing in 3 rate hikes through 2022 compared to the RBA who still see 2023 as the earliest time they will be lifting the Cash Rate from 0.1%. My “Gut Feel” is the RBA will hold off through 2022 if they possibly can but ultimately this will lead to sharper increases when they do move, especially if inflation continues to surge.
Statistically we’ve been pushing the bullish wagon if the ASX200 could break above 7480 conversely on the downside, which is now closer, a close under 7300 could easily see another test of 7150 – as we said yesterday “the market will be there tomorrow and it usually tells us where it wants to go hence be patient”. In 48-hours local stocks have transitioned from looking poised for an upside breakout to nervous / wobbly although we shouldn’t forget there’s only 37-days until Christmas.
Overnight US stocks were again mixed with the broad based S&P500 closing down just 0.01%, the SPI futures are calling a flat open this morning which would be a welcome respite after yesterday’s weakness.
MM remains bullish the ASX targeting fresh highs into Christmas
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