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China’s housing crisis deteriorated in May, triggering further calls for Beijing to support the important economic area. Yesterday’s data was the worst since 2011. The property market has weighed on China’s economic growth for years, and yesterday saw declines in real estate investment and home prices gather pace. Also, industrial production missed expectations for May, rising 5.6% from a year earlier but slowing from April. The only encouraging light on Monday was Retail Sales improving faster than expected, but the net result is China is still experiencing a weak economic recovery, with Beijing needing to step up if it’s going to achieve its 5% growth target.

French President Macron is playing a huge game of chess, poker, or maybe even chicken after making the calculated gamble that the French people won’t hand over power to Marie Le Pen and the Far Right. Last Sunday’s European elections stunned the region as the Far Right Parties’ popularity surged. The National Rally Party secured around twice as many votes as Macron’s Renaissance Party. Hence, the President’s large throw of the dice, which has unsettled the French CAC-40 and other European equity indices.

A whopping 9% of the ASX200 is up over 30% so far in 2024, although a lot of better-known “high flyers” didn’t make the cut with such a high bar. Surprisingly, after moves on the sector level, there were still plenty of miners in the winner’s enclosure driven by stock specific influences – which is true across the list below. While the Macro is important, and we place a lot of emphasis on it, stock picking is where the rubber hits the road.

We all know that 2024 has delivered a noticeably differing performance on the sector level so far, and this particular elastic band is likely to be stretched further this morning. The Tech Sector has outperformed the Materials by a whopping 35%. After moves overnight and renewed Chinese economic jitters, we could easily see it reach 40% this FY. Under the hood, the markets delivered even greater divergence of performance, with 5% of ASX200 stocks down 30% or more. Over the same period, the markets rallied ~1.6% before dividends, not a huge gain but still on the correct side of the ledger. This is a great example that avoiding losers is every bit as important as picking winners; one of the reasons MM Active Growth Portfolio is enjoying another solid year is that we’ve avoided 9 of the 10 names altogether while only enduring part of Corporate Travel’s (CTD) -33% decline so far this year.