The ASX 200 finished a volatile week up +2.3%, reaching a four-month high on Wednesday after softer-than-expected inflation data reduced fears of higher interest rates. The ASX shrugged off a sharp pullback earlier in the week by the “AI Trade” and a 1150-point drop by the Dow on Wednesday night after hawkish comments from Fed Chair Warsh - as we’ve been saying through July, the local market is slowly starting to get its “Mojo” back as we head into reporting season.
The ASX 200 finished modestly higher today, securing a fourth consecutive monthly gain despite giving back most of an early rally. The index traded as high as 9,059 before closing just +9 pts higher (down ~85pts from the open), with strong gains across materials, selected technology names and gold miners offset by weakness in healthcare, consumer staples and communications.
The Dow recovered over half of Thursdays decline overnight as Microsoft surged +15.5% after strong Azure cloud growth reinforced confidence that AI infrastructure spending is yielding results, sparking a broad rebound across semiconductor stocks. The iShares Semiconductor ETF (SOXX) climbed more than +8%, with Micron Technology jumping +18% and AMD rising more than +13%, while South Korean memory giant SK Hynix rallied over +17%. The move reignited the momentum trade, with the iShares MSCI USA Momentum Factor ETF (MTUM) gaining more than +5% as investors rotated back into AI-linked names.
In contrast, Meta Platforms fell 8% after issuing softer revenue guidance and reporting a 91% decline in second-quarter free cash flow. Volatility may be high at the stock level, but this earnings season continues to support US indices, with ~68% of stocks beating EPS and ~79% on the revenue line - the balance of the S&P 500 stocks are due to report in the coming fortnight, with the local names also getting ready to face the music in August.
The ASX 200 snapped a three-day winning streak today, retreating from yesterday’s five-month high as investors reduced risk following a sharp sell-off in the US. Materials and consumer stocks under most pressure, although strength across technology and selected energy names helped cushion the decline.
The ASX 200 surged through 9000 yesterday, closing up +1% at a fresh 4-month high, supported by a soft inflation read (CPI). Gains were fairly broad-based for a triple-digit day with ~70% of the main board advancing, led by the rate-sensitive stocks. As we’ve alluded to in the last few morning reports, the ASX has been getting its mojo back of late, and the soft CPI hasn’t hurt the backdrop for local stocks. Even the Australian Financial Review quoted our comments along these lines overnight:
The ASX 200 hit a five-month high today after softer-than-expected inflation all but removed the prospect of an August interest-rate hike with healthcare, consumer discretionary and consumer staples leading a broad-based rally.
The ASX 200 delivered a stellar albeit surprising performance on Tuesday, reversing early losses to close up +0.6%, posting a 6-week high in the process. The buying gathered momentum after lunch ahead of todays pivotal CPI inflation read, with bonds also strong; it felt like some hawks were squaring their positions in case the CPI comes in softer than expected. However, what was most impressive about the performance was the manner in which the local market shrugged off weakness across the region, where the KOSPI (-11%) and Japanese Nikkei (-4%) combined with weak US futures to paint a clouded picture for risk assets.
A solid session locally, with the ASX 200 gaining 0.52% despite US futures remaining slightly lower. The move had the hallmarks of futures-led buying in Australia, with the SPI strengthening through the afternoon and broad gains across consumer discretionary, communications and healthcare, while the major banks also provided support.
The ASX 200 surged +1.4% higher on Monday, delivering its best day in 6 weeks with 85% of the main board closing in positive territory. Only the energy sector closed lower as Middle East tensions eased, sending oil plunging ~9% and global bonds and equities rallied in a classic “risk-on session” for stocks. Ironically, as we head into the uncertainty of Wednesday's Australian Inflation read, it was the sharp reversal higher in bonds (yields lower) following oil's weakness that helped drive rate-sensitive stocks up on Monday, with Tech (+4.5%), Materials (+2.4%), and Real Estate (+1.7%).
The ASX kicked off the new week in fine form that to a pause in US-Iran strikes, putting some probability back on diplomacy. The early spike higher as US Futures rallied was held and built on as the day progressed. Oil traded down 6%, bond yields fell ~10bps and the US was sold, pushing the AUD back up through US70c.
Join Portfolio Manager James Gerrish & Analyst Michael Clark as they take a deep dive into Uranium Company Paladin (PDN) in the final episode of this series doing a deep dive into 6 stocks MM likes.
We start by looking at Uranium more broadly, the difficult past and optimistic future for a commodity that will be important in a decarbonized world.
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