The ASX200 is poised to make fresh all-time highs this morning with good old fashioned corporate performance dictating the markets trend as opposed to short-term panic around COVID-19 and the subsequent deteriorating sentiment towards the global economic recovery. When we stand back and look at the local market since this impressive post GFC bull market started way back in March 2009 the rally by equities has been steady with a few interesting characteristics catching our eye:
- The average appreciation has been around 325-points p.a. thus after rallying 820-points in 2021 on the surface things feel pretty stretched.
- However the majority of the gains since the 3121 low, now well over a decade ago, were enjoyed in 2009 & 2019 when the ASX200 gained 1147 & 1038-points respectively.
Hence as we’ve said a number of times already this year investors must remain open-minded, 2021 is well and truly on track to join these two standout years which flags an annual high well above the recent top. if we simply see the major banking & mining stocks go back to their highs of recent months, without too much damage being inflicted elsewhere, the ASX200 would probably be in the 7600-7700 region, forget the current 7400 resistance! Common sense dictates that a market that can ignore a sharp rally in bond yields in Q1 and then a plunge back into lockdowns in Q3 is strong, its going to need a big right hook to cause the next market correction, although as they say, it’s the bus you don’t see that kills you!
The miners are likely to be volatile this week with RIO Tinto (RIO) reporting on Wednesday as a number of its global peers face the music in the near future, MM will be watching closely as we look to increase our exposure to the sector further following our purchase on Oz Minerals (OZL) last week.
MM remains a buyer of weakness across most stock market sectors
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