scroll

First Up

UPDATED 30/11/2024 08:39

trade now

The ASX200 ended the week up +0.5% and +3.38% for the month, and an even more impressive +3.9% when we include the chunky dividends in November. Through the penultimate month of the year, tech led the charge, advancing over 10%, while the materials and energy sectors were the only two to finish lower; it was a case of different month, but the same result for 2024. As we enter the seasonally bullish December, the index is up more than 11% before dividends, not a bad performance considering the market’s nervousness amidst geopolitical uncertainty, a US election and lofty valuations across many sectors.

Winners: Life360 (360) +20.5%, WEB Travel (WEB) +19.8%, Pro Medicus (PME) +13.6%, Sigma Health (SIG) +13.3%, Guzman Y Gomez (GYG) +12.7%, Lovisa Holdings (LOV) +8.2%, Zip Co (ZIP) +6.5%, Reece (REH) +5.6%, and Dexus (DXS) +4.9%.

Losers: Boss Energy (BOE) -11.7%, Pilbara (PLS) -8.4%, Paladin Energy (PDN) -7.3%, Yancoal (YAL) -6.9%, Nufarm (NUF) -5.7%, Bellevue Gold (BGL) -5.2%, Liontown Resources (LTR) -5.2%, Spark NZ (SPK) -4.3%, ALS Ltd (ALQ) -3.6%, and ANZ Group (ANZ) -3.4%.

After posting another all-time high on Monday and Thursday, our target of 8500-8600 by Christmas may be conservative. However, on a day-to-day basis, traders appear to be “buying dips and selling strength” with little to no follow-through whenever we see new highs.

It was a quiet week for the $A, but bond yields slipped, with the 3s back under 4% for the first time in four weeks. In the week, we saw signs that consumer caution among Australians is easing, with household consumption seemingly accelerating, illustrated by recent indicators such as retail sales and the confidence index, according to ANZ Research. However, futures markets are still looking for two rate cuts by the RBA over the next year. Economic news through the week threw up no major surprises:

Equities fell on Tuesday following comments from Trump on his social media platform, “Truth Social.” Trump said the US would impose 25% levies on imports from Mexico and Canada plus additional 10% tariffs on Chinese goods.
The Australian CPI inflation print was softer than expected at the headline level, printing 2.1% vs. 2.3% expected for October. However, it’s only a monthly number, and the RBA’s preferred measure, the trimmed mean, which takes out the more volatile inputs, came in as expected.
Also, on Wednesday, the Reserve Bank of New Zealand (RBNZ) cut rates again by another outsized 0.5%, taking them to 4.25%, below our own at 4.35%. However, traders reduced bets on further action as the central bank flagged that fewer cuts were likely.
On Wednesday night, the US personal consumption expenditures price index increased 0.2% for the month and showed a 12-month inflation rate of 2.3%, both in line with expectations.
US markets were shut Thursday for Thanksgiving, followed by a shortened half day on Friday, with volumes accordingly lower throughout the week.
On Friday, we heard news out of Brazil that the South American nation is proposing a cut in public spending after deficit concerns, and the impact on their raw material exports could be significant – good news for ASX miners.

Following the Thanksgiving Day holiday, the overnight half-day session saw the US rally, with the S&P500 and Dow rising to new highs. The S&P500 closed up +0.56%, with some upward momentum coming from chip stocks. These popped after Bloomberg reported that the Biden administration was considering additional barriers to selling semiconductor equipment to China. About three of every five S&P 500 members finished the session in the green, adding to November’s strong returns following Trump’s victory.