HomeReportsMarket Matters 2022 Outlook Report – a potential…
Firstly and very importantly a happy and healthy new year to everyone, COVID may continue to test us all but lets hope our optimism is well founded and it will soon to be in the rear view mirror, definitely some lessons to be learnt here! Aside from the pandemic MM is extremely excited about the coming year on a number of fronts from the ongoing opportunities the markets look set to present to the continued growth and evolution of MM:
When inflation rises it takes interest rates along for the ride which flows down to multiple contraction / a drop in valuations i.e. people are prepared to pay less for a company’s potential growth / yield because they can suddenly get an improving return on their risk free funds at the bank i.e. a major tailwind for stocks has become a headwind
The US literally pumped money / stimulus into their economy after the GFC but the amount pales into insignificance compared to their extreme efforts post-COVID, never in history has the global economy experienced such phenomenal economic stimulus effectively providing “free money” which has fuelled massive M&A and buyback activity in equities
MM believes that company buybacks are close to a point of inflection which should remove an enormous tailwind for stock indices i.e. one of the largest net buyers of stocks may retreat
MM remains mildly bullish Australian equities looking for 4-6% further upside i.e. not a big call but we do anticipate reducing our risk if such a move unfolds
MM is looking for around 10% upside in copper in the coming months but we must remain mindful of how quickly some moves unfolded in 2020/21, in both directions!
The ASX 200 ended the week down 1.5% trading at its lowest level since July, with the vast majority of the damage unfolding on Friday. The week ended with the local market suffering its worst day in 10 weeks amid a global pullback in risk assets. Hawkish comments by Fed officials on Thursday night dialled back expectations that they would cut rates in December, sending rate-sensitive stocks lower. The tech, financial, and real estate sectors were the worst performers, while the materials and energy names again led the line, gaining 3.8% and 1.9%, respectively
The Australian market copped another heavy bout of selling today, with sentiment rattled by growing fears that interest rates in both the US and Australia aren’t coming down any time soon. The move follows Wall Street’s largest one-day fall in a month and caps the ASX’s worst week since March.
Volatility is on the increase in equities, but it's already been high in recent months across the commodity markets, from precious metals to lithium and copper. The moves have been significant as investors and traders have battled with the usual supply and demand fundamentals, combined with the almost random-like comments coming out of the Whitehouse. However, while the resources sector hasn’t been for the fainthearted, it has outperformed in 2025, with the Materials Index up 24% year-to-date, while the previously much-loved tech space is down 11%.
This morning, we updated our views across 6 commodities using related ETFs as the need to keep our finger on the pulse increases.
The ASX200 dropped sharply today, falling to a ten-week low after a strong jobs report dashed hopes of near-term RBA rate cuts, sending the rate-sensitive real estate and tech sectors down. The roaring gold sector provided a buffer, while the psychological 8700 level proved itself as a support, with a broad ~55pt rally softening the blow into the close.
The ASX200 closed down 0.2% on Wednesday, reversing early gains and closing below the psychological 8800 level. Over 50% of the main board closed higher, but another 3% drop by CBA was enough to drag the index lower, with Australia's largest bank now over 17% below its June high.
The ASX finished lower today with decent sessions from miners and energy stocks more than offset by weakness in technology and financials, as selling in CBA struck again, capping broader momentum.
The ASX200 started Tuesday in an encouraging fashion, up ~0.5%, as the US government neared a reopening deal, before the index reversed to close down 17 points, or 0.2%. The weakness was almost entirely down to CBA, even though winners outstripped losers by 2:1, when the ASX's largest stock tumbles 6.6%, the local bourse is going to struggle to close higher.
The ASX200 wavered through Tuesday’s session, opening up strongly after steps toward a resolution for the U.S government shutdown saw U.S markets rip overnight.
The ASX 200 rallied strongly on Monday, closing up +0.8% with 70% of the main board finishing higher. The local bourse enjoyed a strong tailwind from US futures and commodity prices as risk markets bounced on the news of the imminent end to the US government shutdown.
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