Archives: Reports
We are amending the Active Growth Portfolio and adding one new position to the Emerging Companies Portfolio.
These three unrelated commodities have surged higher recently, taking many ASX names along for the ride. For example, in 2024, Sandfire Resources (SFR) is up +24%, Northern Star (NST) +8%, and Paladin (PDN) +50%. Fortunately, at MM, we enjoyed the moves of all three themes, and today, we quickly reviewed the group to evaluate if our exposure needs tweaking as market volatility starts to increase.
The ASX recovered 1/3rd of yesterdays sell-off with a broad based rebound playing out – all sectors higher, led by the interest rates sensitive names that were hardest hit yesterday.
We believe the end-of-quarter squeeze into Easter amplified the sharp fall on Wednesday; hence, we looked back at the charts to see if this “Gut Feel” had any foundation. Only twice since COVID have stocks squeezed into the end of the quarter, and the last time was the previous quarter, which subsequently witnessed the ASX200 unravel 260 points in just three weeks. However, any further comparisons are akin to “curve fitting,” with such upside squeezes actually very few and far between.
A tough day for Aussie stocks with the ASX getting aggressively sold off throughout the session, the recent winners in Tech and Property were front and centre of the sell-off while the Resources were relative performers. We wrote this morning that we continue to expect “3-steps forward, 2-steps back” price action in the new quarter, but another 200-point pullback wouldn’t surprise us as the index rubs up against the overhead trendline that’s contained it through 2024, although we didn’t expect half of the move to come today. It seems there are often market peaks that correlate with the end of reporting periods i.e. each quarter, a trend we will do some more work around and update you on in coming notes.
We are selling positions in the Growth and Income Portfolio
Tuesday delivered a fascinating session for Australian investors. A macro arm wrestle unfolded, causing significant action under the hood before the index eventually slipped just -0.1 %. This was a solid performance, in our opinion, considering Thursday’s storming session to end the quarter. The bulls welcomed a resurgence in China-facing stocks, while interest rate-sensitive names struggled as the doves pulled back bets on a Fed rate cut in June. We’re conscious that over recent years, bonds and stocks haven’t walked a different path for very long.
A choppy session to kick off the new month and quarter for the ASX, coming off the back of a very strong period for markets. We provide a broad look at various asset class performance below, while we’ll cover the performance for the suite of Market Matters published (website) portfolio’s in tomorrow mornings portfolio positioning report, headlined by the Active Growth Portfolio that returned 5.82% for March, ~2% ahead of the market.
Gold popped almost $US50/oz yesterday evening, posting another fresh all-time high in the process as investors/traders further digested last week’s market-friendly PCE Index data. The Fed’s preferred gauge of inflation is cooling which suggests the Fed is getting ever closer to cutting rates. The precious metal is also enjoying the added tailwind of powerful Chinese demand and ongoing global political tensions, what’s not to like? Gold has surged ~12% over the last six weeks, and with no near term end in sight for the three bullish drivers mentioned previously, we can see it testing $US2400-2500 before Christmas.
A bullish session to end a positive quarter for equities with the market rallying ~3% in the last month, propelling the ASX200 to fresh all-time highs. Have a wonderful Easter break with family and friends.
