The ASX200 suffered a tough Thursday closing out the day over -0.5% lower with only 30% of the index managing to close in positive territory, only really the Telco stocks managed to rally as a group. Volatility on the stock level remained elevated as reporting season starts to deliver a negative bias after promising so much early on, over the day we only saw 4 stocks rally by 4% while more than 14 companies fall by the same degree. As is usual this time of year the last 5-days has created a major divide between the “haves & have nots”, below are the list of movers of greater than 10%, in both directions:
Winners: Flight Centre (FLT) +21%, Webjet (WEB) +17%, HUB24 (HUB) +18.8%, Nanosonics (NAN) +21.5%, Blackmores (BKL) +20.5%, Redbubble (RBL) +12.1%, Wisetech Global (WTC) +29.3% and Qantas (QAN) +16.1%.
Losers: Seven Group (SVW) -10.1%, Reece Ltd (REH) -16.7%, Cochlear (COH) -10.9%, Polynovo (PNV) -12.1%, NIB Holdings (NHF) -15.3%, Adbri Ltd (ABC) -10.5%, Kogan.com (KGN) -14.7%, Link Admin (LNK) -13.3% and Appen (APX) -11%.
Interestingly it’s not been a great time for the short-sellers with FLT and WEB the 2 ASX200 stocks with the largest bearish positions, a fact which probably exacerbated their pop to the upside. Happily MM hold 2 of the winners in our Flagship Growth Portfolio with Kogan (KGN) in our Emerging Companies portfolio the major loser. A couple of key takeout’s from this list as we move towards Q4:
- The losers just trumped the winners but it’s a close race with the major performance differentials making it easy to comprehend why MM rarely take on new positions just prior to reporting season.
- History tells us the winners will maintain their outperformance over the coming months and vice versa i.e. investors should have very solid reasons to fade these moves.
- Statistically any “bottom picking” should be left much closer to Christmas, potentially just before a seasonal squeeze when investors often scramble for bargains.
US stocks slipped overnight with terrible explosions in Kabul appearing to unsettle investors while the uncertainty of Jerome Powell’s speech from Jackson Hole on Friday US time would have kept a few players on the sidelines – many people are anticipating the Fed Chair will unveil the US central banks plans to reduce stimulus / normalise interest rates moving into 2022. The SPI Futures are calling the ASX to open slightly lower this morning in what might prove a quiet end to a very busy week on the reporting front – thankfully we’ve now passed the peak of results.
MM remains bullish the ASX and keen buyers of pullbacks
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