Archives: Reports
The ASX200 enjoyed another strong session on Wednesday to close the day up +0.3%, taking it back above the psychological 6800 level. Most of the action on a relatively quiet day unfolded on the stock level with the battery metal stocks bouncing nicely whereas one of MM’s holdings Megaport (MP1) was clobbered after failing to meet growth expectations, more on this later. We continue to feel the path of least resistance for stocks is on the upside as we approach the Fed’s interest rate decision in 2-weeks’ time and of course a potential “Christmas Rally”…
Another positive session for the ASX today with the market edging higher and is now ~400pts/6% up from the recent lows. AGM season is well underway and some hits and misses as always, with a lot of action under the hood. Yesterday a key holding was up 14%, today one is down 20%….Rocks and diamonds and volatility will likely persist.
Earlier this month we saw the RBA hike rates by only 0.25% when most pundits thought they would go 0.5%, over the last 2-weeks slowly but surely the markets are starting to embrace the possibility that bond yields are close to an inflection point and the inversely correlated rate sensitive stocks/sectors a bottom e.g. Tech, Consumer Discretionary and Real Estate. At MM we’ve stuck to our contrarian view that equities will be higher come Christmas, led by the high Beta Tech Sector, and yesterday we saw how easily some of these stocks can pop when sentiment turns, only slightly:
A very solid session for Australian stocks with a buoyant open built on throughout the day as Asian markets + US Futures rallied on growing optimism towards the current pickle in the UK. Risk was back on the table led by strong buying amongst the IT stocks along with Real-Estate, the only segment of the market that fell was Energy as some money rotated into the more beaten-up areas.
The ASX200 surrendered most of Friday’s gains yesterday as the market continues to rotate in the 6500-6800 region, it was the heavyweight resource stocks that weighed on Monday while the banks continued to look solid. Weakness was not too broad-based with 20% of stocks advancing but with BHP Group (BHP) -2.3%, RIO Tinto (RIO) -2.6% and CSL (CSL) -1.3% it’s hard for the index to perform on the day.
The market gave back ~95% of Friday’s gains today however it didn’t feel like an overly bearish session with some green tickers emerging throughout the session, particularly some technology stocks that moved a long way up from their session lows while the Real-Estate sector was the best relative performer. US Futures edged higher, the British Pound also gained ~1% during the Asian session implying that rhetoric coming from the new Chancellor is being taken more favourably.
Last week saw another admirable attempt by stocks to rally quickly fade away as investors remembered the looming Fed rate hike on the 2nd of November. On Thursday night US stocks roared higher even as the CPI Inflation print came in hotter than expected but after a report on Friday showed that inflation expectations over the year ahead had risen for the 1st time in 7-months it was one step too far for the bulls to fight the ingrained downtrend and the Dow proceeded to tumble over 400-points, surrendering almost 50% of the previous day’s rally in the process.
The ASX200 closed out the 2nd week of October with a strong +1.75% rally, even after Thursdays US inflation data came in higher than expected, after struggling for most of the week the local index finally ended down just 4-points and impressively up almost 300-points halfway into the infamous month. MM has been repeating our view over recent weeks but the last 24-hours illustrated the point perfectly as we await the latest Bank of Americas Fund Managers Survey we know that this time last month investors cash levels sat at 6.1%, up from 5.7% in August and well above the long term average of just 4.8%.
Friday delivered a very different story to most of 2021/22 with stocks rallying aggressively following a stronger than expected US inflation print. The risk on theme from Thursday night which saw the Dow surge over 800-points followed through locally with the ASX200 posting a solid triple digit gain with losers very thin on the ground as all 11 sectors rallied by over 1%, it might not feel like it but October is now up around 300-points and were still only mid-month.
The ASX200 tried to rally yesterday but nerves ahead of the pending US CPI crept in after midday and the market surrendered its earlier 40-point advance. There were a couple of fascinating moves within the Resources Sector which could just be the start of some meaningful changes to some entrenched trends of 2022, it smells like “the game is afoot”:
