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We are making two changes to the Growth Portfolio today
The ASX 200 enjoyed another solid performance on Wednesday, again reversing higher from early weakness to end the session up +0.6%, at a 2-month high and only a few points below the psychological 9000 level. It was a clear “risk on” session with only the defensive-oriented consumer staples and utilities sectors closing lower, along with the energy sector, which was weighed down by crude’s inability to recover any of its recent ~15% drop over the last five days. From a points perspective, it was the heavyweight financials and miners that performed the heavy lifting, a very encouraging combination for the bulls.
The ASX shook off a weak start to finish firmly higher today, extending its recent recovery as investors continued rotating out of energy and into resources, financials and growth exposures. The market opened lower before steadily improving through the session, with buying increasing into the afternoon as optimism around US-Iran agreements accelerated with a proper framework and further details of the deal expected imminently.
MM is buying HCA US in the International Equities Portfolio
The Reserve Bank of Australia (RBA), as expected, left interest rates at 4.35%, although Michelle Bullock warned that inflation remains too high. The central bank now faces a delicate balancing act, weighing stubbornly high inflation against mounting signs of softness across the labour market, consumer spending and housing sectors.
The ASX200 put on a fighting performance today, gapping down ~80pts on the open but recovering every last point of the deficit to finish mildly higher. The key news for the day was the Reserve Bank leaving the cash rate unchanged at 4.35%, pausing after three consecutive hikes this year.
The ASX 200 rallied another +1.3% on Monday, following reports that the US and Iran have agreed on the terms of a peace deal. The index extended its advance for June to more than +2%, taking it back within ~3% of its February all-time high, ironically just before the US-Iran conflict erupted. Gains were fairly broad-based, with 70% of the main board advancing.
The ASX built on Friday’s strength and rallied again today, with the local bourse embracing news of a US-Iran agreement to reopen the Strait of Hormuz and removing the biggest macro risk hanging over markets in recent months. The rally was broad, but Materials did the heavy lifting.
SpaceX’s (NASDAQ: SPCX) much-heralded IPO hit the boards on Friday, rewarding the lucky initial buyers with a +19% gain, and turning its founder, Elon Musk, into the world’s first trillionaire. At the same time, the record-breaking IPO created a US$2.2 trillion behemoth, making it one of the largest companies in the world despite investors still debating its path to sustainable profitability.
After a shaky start to the week, the ASX200 finished with a flourish, rallying 2% on Friday to end the week up 1.4% as risk appetite returned. Following several sessions dominated by geopolitical headlines, the ASX delivered its strongest weekly gain in two months as markets embraced the prospect of a US-Iran peace deal and the accompanying pullback in oil prices, which reversed more than US$10/barrel from their weekly highs.
The gains were driven primarily by rate-sensitive sectors, with Consumer Staples (+9%), Consumer Discretionary (+8%), Healthcare (+7%) and Real Estate (+5%) leading the charge.
The winners’ enclosure was also dominated by underperformers as investors went bargain hunting into EOFY, while the laggards had a distinctly gold and uranium flavour.
