Market bounces back strongly post Trump!
What Mattered Today
Yesterday the market had a high of 5314 before selling off in pretty spectacular fashion to a low of 5052 – a BIG 5% range…..before the positive reaction in the States overnight has seen a very strong bounce in our market today – which now sees the market higher than it was pre-Trump! A lot of volatility beneath the surface but in aggregate, the market is actually up +2.5% for the week. A remarkable effort really and now focus is clearly on what the economic ramifications of a Trump presidency might be.
In the haze of yesterday afternoon's action we penned some thoughts on what might actually play out, suggesting that in terms of the ‘Trump Policy Suite’ his plans to increase spending, particularly on Defence and Infrastructure, halve the company tax rate for corporate America, introduce a series of tariffs to protect local jobs and be more liberal overall in terms of spending – could be very stimulatory. The other important aspect is that Trump’s a businessman, he’ll be business friendly which could be supportive of the market.
That view has clearly played out overnight with investors chasing sectors that could be the likely beneficiaries. In the US, we saw Winners: Financials +4.3%, Healthcare +3.1%, Industrials +2.6%, Energy +1.7% and Materials +2%. Losers : Consumer Staples -1.5%, Real estate -2.5%, Technology -0.6% and Utilities -3.5% and that theme has also played out here, but with material stocks chiming in more than they did overseas.
Source; Bloomberg
The other important aspect is around the yield play. Infrastructure, property and the like, were sold here today which continues to fit with our current thinking. There will be a time to BUY these names again, the likes of Sydney Airports (SYD), Transurban (TCL) etc, however, we’re not there yet.
The key takeout it would seem is that overall Donald Trump sounds like one big fiscal stimulus leading to higher interest rates and inflation.
On our market today, we have a very positive session with a range of +/- 121 points, a high of 5328, a low of 5207 and a close of 5328, up +172pts or +3.34%. Another BIG value day on the ASX with $7.34bn
ASX 200 Intra-Day Chart – ASX strong then closes on the highs
ASX 200 daily chart – a massive range
Sectors
ASX 200 Movers – RISK on again with the typical risk stocks leading the charge today while the GOLD names saw yesterday’s gains wiped off.
Select Economic Data - Stuff that really Matters in Green
What Matters Overseas
FUTURES higher…
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