Indices: Australian ASX 200
No change towards the local index as it looks for direction around the 7000 area following its +9.3% bounce since its mid-June low. Our preferred scenario is we see another test on the downside before another exciting “Christmas Rally” but it’s not a view that MM would position ourselves aggressively in anticipation of, but while the seasonal roadmap remains in play we should be conscious of it.
Similar to the Tech Sector the high Beta small cap index has outperformed since the market bottomed in June, further catch-up feels warranted medium to longer-term but in line with our current overall neutral stance we wouldn’t advocate chasing this volatile market space at this stage of the bounce or until we again adopt a bullish stance e.g. MM has been bullish the ASX200 during its strong June & July recovery.
The ASX200 retraced early losses following the encouraging comments from the RBA, the number of winners & losers was fairly evenly balanced but solid gains in the banks were enough to offset losses in the Resources Sector as investors shift their concerns from rate hikes to the increasing recession into 2023 i.e. as we’ve said repeatedly over the last few years “what a difference a month, or two, makes”.
