Archives: Reports
MM is reducing BAP & AD8, selling CAJ, increasing CNI and buying CAT & SFR.
The ASX Telco index is dominated by Telstra (TLS) but through 2023 its been a very mixed bag for the four main stocks with TPG Telecom (TPG) +9.8% best on ground while Spark NZ (SPK) -7.6% has carried the wooden spoon, TLS is down just -0.6% underperforming the ASX200 which is up over +1% year-to-date.
A soft start to the new trading week which sees the vortex of local company results with the next 3 days seeing a significant number of company updates. There was certainly volatility at the stock level today with Iress (IRE) -35% & A2 Milk (A2M) -13.56% on the wrong side of it, while strong updates from Premier Investments (PMV) +12.23% and Breville (BRG) showed there is life left in retail!
The ASX200 ended last week down another -2.6% taking August’s pullback to -3.5% with nine trading days remaining. Risk sentiment has been significantly dampened by an ever-hawkish Fed and a Chinese economy that is struggling to regain its “mojo” post the country’s severe zero-COVID policy – strict lockdowns have exacerbated issues in the likes of property that were already surfacing in China. Last week we saw the PBOC cut rates for the second time since June.
The ASX200 ended last week down another -2.6% taking August’s pullback to -3.5% with two weeks still remaining. Escalating concerns around the Chinese economy combined with an ever-hawkish Fed saw buyers run for the hills with the influential Financial & Materials Sectors standout detractors ending the week down -3.6% and -4.3% respectively. Only the Real Estate and Healthcare Sectors closed higher over the 5-days with positive earnings as the main drivers in both cases i.e. Goodman Group (GMG) +11% and Cochlear (COH) +11.9%.
A flat end to a tough week for markets with a lot to digest: Better US data drove bond yields higher, China property concerns as news of defaults linger pushed miners lower, while local reporting underpinned rising volatility across the board. Phew, it’s Friday!
The gold price has struggled since its May high with the a recovery by the $US and firm bond yields weighing on precious metals i.e. when you can get 5% on deposit in the bank, gold and its respective stocks need to advance 5% just to match this risk-free rate of return – a far different story to when rates are at zero! At MM we continue to believe that bond yields are at/close to a pivot high that should deliver an improving tailwind to the Gold Sector over the coming quarters.
The ASX fell again today, although some obvious ‘dip buying’ came to pass as reporting season continued to build, while a higher unemployment rate provided further evidence to support a continued RBA pause.
We are amending the Flagship Growth Portfolio
The US FAANG+ Index has now corrected over -10% from its July high, nothing too sinister in our opinion considering its still up over +65% year to date. The overnight weakness is being attributed to the hawkish Fed minutes but we believe it’s more a case of negative sentiment from China combining with a market that’s rallied very strongly over the last 9 months i.e. its simply being in need of a rest.
