Archives: Reports
We are amending the Growth & Income Portfolios
A quiet session as expected today, most of the country preparing for Christmas rather than concentrating on markets, the ASX trading is a tight ~20pt trading range ahead of the 4-day break. This will be the final note for 2023, with normal programming recommencing on Monday the 15th January.
As was the case yesterday, the focus of this morning’s report is looking at levels to reduce market exposure for the Active Growth Portfolio. Note we are cautiously bullish on a number of the positions simply because we believe the current market advance is maturing into January.
A few in the market scratching their heads this morning about the 1.5% decline in the last few hours of trade overnight, multiple reasons at play, with a big put options position as one of them, along with strong US economic data, however, the market has run hot and some profit taking met low volumes and selling fed on itself. The ASX though did better than the 1% decline futures were implying, the low for the day set early on before fighting back to end mildly lower, still ~750 points/ 11% above the 6751 low set on the 30th October. With one trading session to go before Christmas, the ASX200 is up 6.6% before dividends.
As the ASX200 Accumulation Index (including dividends) pushes to new all-time highs, MM is looking for areas to de-risk slightly after being fully invested through November and December. Today, we have briefly focused on ten stocks in alphabetical order, reiterating if/where we are considering moves, although obviously if we do press the defensive button, it’s unlikely we will sell all/part of more than 2/3 positions within the portfolio.
The march continues with positive momentum remaining in the latest broad-based rally today. 10 of the 11 sectors closed higher, Tech being the one in the red today thanks to weakness in some of the larger constituents. As was the case yesterday, the ASX200 hit levels not seen since February this year, trading through 7550 late in the day before cooling off on the close.
The local market is still in the shadows of the major US indices when it comes to registering new all-time highs, but it has definitely been “on song” over the last few weeks; the ASX200 has already advanced +10.2% for November & December combined with a few exciting sessions remaining. However, as stocks continue to follow our roadmap into 2024, one characteristic which looks set to persist into 2024 is the strong getting stronger & weak weaker.
The bullish sentiment returned to the market today, storming higher to levels not seen for 10 months. All sectors took part in the rally with the laggard, Staples, still up by more than 0.5%, though Utilities, Tech and Consumer Discretionary were the key winners. Energy was also a standout following attacks in the Red Sea overnight, disturbing supply routes.
Monday saw cement business ABC receive a takeover bid from the largest shareholder, Victorias Barro family (~43%) and NY-listed Irish building giant CRH. The $2.1mn buyout proposal offered more hope to the long-suffering shareholders in one fell swoop than the board achieved over the last five years. The proposal at $3.20 saw the stock pop over 30%, although it still closed ~7% below the bid due to the ongoing risks associated with the approach.
Shares finally snapped a 6 session-winning streak today as the ASX took a breather from the impressive December run. Real Estate was the key laggard as exuberance over expectations of rate cuts settled. There remains some strong support for local equities, shares finished well ahead of the -1% drop implied by futures ahead of the market open this morning.
