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Overnight equities endured a tough session. The EURO STOXX 50, which led European bourses, fell 1.2%, reversing early small gains as US weakness weighed on sentiment. The tech-based NASDAQ tumbled over 3%, dragging the S&P500 down 2.1%, with Nvidia’s sharp ~10% drop setting the stage for an already jumpy market capable of swinging dramatically on any unfavourable economic data. This morning, our first thought was whether September would start in a volatile fashion similar to August, it feels like another wave of recession fears is just one major piece of economic data away with non-farm payrolls due on Friday a very important read.
Another session that looked calm on the surface, though under the hood there was a lot playing out, resources weighed as selling targeted Lithium, Iron Ore & Uranium stocks, while Woolies & Coles traded ex-dividend weighing on the Staples – the ASX 200 finished just 11 points below its all-time closing high.
The story remains the same as we kick off September, with the ASX200 falling early in the session before clawing back all of the losses to end the session higher, with the banks again performing the heavy lifting – the “Big Four” advanced an average of +1.2% after all four traded lower in the first hour. Less than 55% of the main board closed higher, but the influential big-4 were enough to offset another tough session for the embattled miners as China’s economy continues to struggle.
A more bullish session than many thought would transpire today (MM included) ahead of a public holiday in the US tonight, with the banks underpinning the majority of the advance, CBA hitting a new all-time closing high ($141.77) even though it’s trading ex-dividend.
MM is making 2 changes in the Active Growth Portfolio today
We often trot out the saying, “There are lies damned lies and statistics.” but at MM, we still believe investors should be aware of the seasonal statistics, even if we decide to ignore them. As late scientist Dr. Carl Sagan said, “You have to know the past to understand the present.” An amazing August is in the rearview mirror, which incredibly, ended unchanged after plunging over 500 points in just a few days before recovering all the losses. Now, It is time to consider September and the run into Christmas:
The ASX200 advanced another +0.85% last week, closing less than 1% below its all-time high. The upside momentum has slowed slightly but investors appetite remains into any semblance of a dip. Over the week only 5 of the 11 sectors advanced but gains of more than 2% by the real estate and financial sectors was more than enough to offset dips of over 1% by the tech and consumer discretionary names. The week was company dominated with economic news relatively thin on the ground
We wrapped up a huge FY24 reporting period today, and while the market finished the month up just ~0.3% inclusive of dividends, there were some incredible moves under the hood, as outlined in the tables below. For now, we must respect the trend, and if we do get a scenario of lower interest rates, yet economies hold up, equities should do very well – a glass-half-full view to end a huge month for markets and MM content!
Artificial Intelligence (AI) has often been the market’s focus over recent years, and never more so than yesterday after Nvidia (NVDA US) posted its second-quarter results. In summary, the world’s most famous AI play produced US$30 billion revenue in the quarter, its adjusted earnings per share (EPS) rose by 152%, and it is planning a US$50 billion share buyback, but the stock still fell over 6%, with “great” not being good enough after the stock’s parabolic gains over the last year.
A softer session for the ASX today, though once again, strong buying of the dip played out with the index finishing ~30 points up from the lows, moving inline with US Futures that tracked higher during our time zone after initial weakness prompted by an afterhours sell-off in Nvidia.
