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It wasn’t a bad effort really from the ASX today ending the session down 56pts following a sharp sell-off in the US overnight, the Energy & Material stocks providing the backbone as Iron Ore hit a new 6-month high at $US120/tonne.
The ASX200 struggled again yesterday taking the market into negative territory for the week as weakness crept into the previously strong Resources Sector. The market has felt heavy over the last few weeks but at this stage, we’re still only -2.3% below the market’s recent high, very surmountable if we can regain our mojo after recent moves by central banks…
A tough day for local stocks with the ASX200 closing down -0.64% on broad-based selling which saw over 70% of the market close down on the day. Overnight the Fed prepared investors for interest rates above 5% next year but equities are still unsure whether to embrace the comments as the worst is approaching fast or that this is higher than we expected and a recession is looming hence equities could fall further i.e. as we said this morning the next 48-hours are likely to dictate if we enjoy another seasonal Christmas rally.
We are making changes across two key portfolios:
The ASX200 rallied strongly on Wednesday following the positive lead from the better-than-expected US CPI inflation print, we believe bond yields have peaked for now although the Fed have work to do even if the worst of US inflation may have passed. Stocks/sectors are taking some heart from recent Fed comments and Tuesday’s benign CPI read as we see some reversion to the dominant trends of 2022 start to slowly unfold, yesterday fitted into this story under the hood i.e. banks and resources were mixed while the tech stocks gained some traction.
Lower rates likely in the US after a more benign inflation print overnight put some heat under our market today with the rate-sensitive areas doing best. 11.30am saw the low for the day before we ground steadily higher throughout the session.
Stock markets across the region rallied yesterday before last night’s much anticipated US CPI print that confirmed the heat is coming out of US inflation, just like it is in Australia, and the most aggressive tightening of monetary policy in history is working. Overnight, US headline inflation came in at 7.1% for November, down from 7.7% the prior month and below the 7.3% expected by the market. Stripping out the more volatile food and energy, core inflation was 6%, down from 6.3% and below the 6.1% expected. This created some fireworks in bond markets overnight, Treasuries…
The ASX traded higher today although fell away from its best levels seen in early trade – weakness amongst the resource sector the major influence at the index level with BHP & Fortescue alone taking ~20 points off the index.
MM are buying DXS
The ASX200 slipped another -0.45% on Monday on broad-based selling which saw well over 60% of the main board close down for the day with the resources coming off the boil catching our attention after we trimmed our exposure last week. Elsewhere in what felt like a fairly quiet day with central banks sitting poised to dominate the news some buying crept into the tech space but there have been many false dawns on this front through 2022:
