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The AX200 enjoyed a strong end to the week making fresh highs for October on Friday as the unusual combination of Tech and Resources banded together to drag the index into positive territory for the week. Suddenly the statistics & seasonality factors are combining nicely for the bulls:

As we make new highs for the month on the 15th the strong likelihood is we’ve not only seen the low for October at 7157 but also the quarter which has very bullish implications.
The average quarterly range since the COVID outbreak is well over 500-points implying from extrapolation that there’s a strong likelihood that the ASX200 can achie

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Latest Reports

Morning report

Macro Monday: Bonds & stocks aren’t drinking from the same fountain

Last week saw some inconsistencies / fascinating moves across financial markets which we believe were largely driven by investor positioning & sentiment but this might not continue if MM’s preferred scenario unfolds for bond yields. Last week was all about the US CPI and Wednesday’s number showed a much-welcomed slowdown in inflation which sent most indices soaring to their highest levels in over 3-months:

what matters today Market Matters
Weekend report

Ask James: The ASX200 feels “tired” above 7000

The ASX200 struggled last week considering the theoretically strong tailwind from a weak US CPI print and no major blow-ups from the local reporting season, the index did manage to scale fresh 9-week highs but by Fridays close it had only managed to close up +0.2%. The Resources Sector helped keep the index in positive territory, significantly assisted by BHP’s bid for OZ Minerals (OZL), but what probably caught most investors off-guard was a more than 2% pullback by the tech & healthcare sectors even after the deceleration by the main US inflation indicator.

Ask James Market Matters
Afternoon report

The Match Out: ASX storms higher, Retailers & Property bask in the prospect of fewer rate hikes

The ASX opened with a bang this morning rallying off the back of a strong session in the US following signs that inflation has peaked, CPI printing 8.5% versus 8.7% expected. This is a big deal, uncontained inflation is the reason why rates have risen so aggressively and why risk assets had been sold off. Stabilisation here provides more certainty and more certainty gives confidence, and we all know the market ebbs and flows in the short term on this metric.

The Match Out Market Matters
Morning report

What Matters Today: How to best structure portfolios for the end of this hiking cycle

The ASX200 struggled on Wednesday with many traders taking a back seat ahead of last night’s important US CPI (inflation) data, the index ultimately closed down -0.5% basically at the same level we started August. Selling was broad-based with 70% of the main index closing in the red but with the influential Banking Sector closing higher, even as Commonwealth Bank (CBA) slipped -0.3%, losses were limited i.e. for fireworks to be lit under the index we generally need to see the Resources & Banks run in one direction.

what matters today Market Matters
Morning report

Portfolio Positioning: All eyes are on tonight’s US inflation data

On Friday we saw an extremely strong set of US Employment numbers increase expectations of a 75bp hike at the September FOMC meeting but tonight’s CPI and the plethora of Fed speakers enjoying the limelight in coming weeks are likely to see opinions swing between 75bp, and back towards 50bp. The markets have taken a definite shift towards a more hawkish stance since Friday and another strong CPI print could easily see US 10 years back above 3% which will pressure equities and especially the Tech Sector.

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