The ASX 200 ground out another +0.7% gain last week, but it was a very choppy affair day to day, with stock and sector rotation still prevalent. It doesn’t feel like it, with heavyweights CBA (11%) and BHP (14%) both trading well off their highs, but the index is now only 2.3% below its all-time high. It was also encouraging for the bulls, like MM, that both our own and US indices were able to shrug off the problems at NVIDIA and increasing inflation worries in the US, with a rate hike now appearing a near certainty in December.
The best and worst-performing stocks last week had little in common except a bid in the tech sector and a bounce in some of the miners, but it was patchy:
Winners: Monadelphous (ASX: MND) +19%, Elevra Lithium (ASX: ELV) +10%, NRW Holdings (ASX: NWH) +10%, Weebit Nano (ASX: WBT) +10%, Xero (ASX: XRO) +9%, Elsight (ASX: ELS) +8%, Lynas Rare Earths (ASX: LC) +7%, and Domino’s Pizza (ASX: DMP) +7%.
Losers: Dyno Nobel (ASX: DNL) -13%, Lend Lease (ASX: LLC) -12%, Ventia Services (ASX: VNT) -12%, Superloop (ASX: SLC) -9%, DroneShield (ASX: DRO) -7%, Eagers Auto (ASX: APE) -6%, Life360 (ASX: 360) -5%, and Generational Development (ASX: GDG) -5%.
Weekly snapshot: The local market enjoyed a firm tone last week with a test of all-time highs feeling increasingly possible:
- The ASX 200 started the week off quietly, despite ANZ delivering a softer full-year result, which triggered selling across the Big Four – same story, different day.
- Falling oil prices triggered an almost triple-digit gain on Tuesday, taking the index to a fresh 2-month high.
- Wednesday demonstrated the market’s improving internals: after falling ~0.5% early on, it reversed the losses to close up +0.3% on a relatively uneventful day.
- The market gave back some of its good work on Friday as a sharp rebound in oil prices and rising global bond yields weighed on the miners, dragging the index back under 9100.
Next week should, in theory, be quieter, but after this week’s events at NVIDIA, nothing can be taken for granted.
Australia: The focus will be on the RBA minutes, 3Q wages and October employment data, with investors looking for clues on whether the RBA’s latest rate hike will be the start of an extended pause. Wage growth is expected to accelerate to 3.4%, while employment is forecast to rebound by 25,000 following September’s sharp decline, with Thursday’s jobs report particularly important for interest rate expectations.
US: NVIDIA’s 3Q results on Monday will be the week’s major event, with investors looking for reassurance on AI demand, earnings momentum and management guidance following the recent leadership turmoil. Beyond AI, retail sales, Walmart’s results and consumer confidence will provide important tests of the US consumer, while continued hawkish Fed commentary keeps inflation and bond yields firmly in focus.
Overseas markets saw selling return to the tech space going into the weekend, but most moves were small. In Europe, the Dax retreated 0.1% while the UK FTSE advanced +0.4%. In the US, the NASDAQ weighed on sentiment, retreating 1.2% while the Russell 2000 small-caps fared better, closing down just 0.2%.
- The SPI Futures are calling the ASX 200 to open marginally lower on Monday after the mixed end to the week on overseas bourses.
