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The ASX recovered slightly today, although the best of it was seen before lunchtime, underpinned by a strong move higher in Energy stocks while financials also found some form.
The ASX200 was clobbered over -2.5% yesterday wiping over $60bn from the local index following steep losses on Wall Street after Tuesday’s US CPI demonstrated that inflation remains stubbornly high. Waking up to a 1300-point rout on Wall Street is enough to scare any investor but we should consider the previous few sessions before throwing the baby out with the proverbial bathwater:
A tough session for the ASX following a stronger than expected inflation read in the US overnight, although a 2.6% decline versus 4-5% in the States could be considered a win! Interest rates sensitive sectors of Real-Estate and IT were hardest hit while the defensives provided some inkling of shelter, although when 193 stocks in the ASX 200 finish in the red, there’s clearly not a lot of positivity to hang one’s hat on.
Update Alert with further detail regarding REA Group (REA)
Various portfolio amendments
The last 4 sessions have seen the ASX200 recover strongly from last week’s early sell-off impressively taking the index back into positive territory for September – to be exact it rallied 4.4% from last Wednesday’s low as investors appeared to “square up” ahead of the overnight US inflation data. Tuesday’s advance was again broad-based with over 80% of stocks closing up on the day led by the Real Estate Sector for a change but it was again the lack of meaningful selling which saw the main benchmark close above 7000. This lack of selling came as no surprise to MM although the rally was stronger than we expected courtesy of a positive lead from the US equities:
Another strong day for equities today with the 4th consecutive session in the black taking the index back over 7000. The index has now rallied around 280 points in just 4-days in a swift recovery from Last Wednesday’s rout. Real Estate led the way as bond yields came off, also helping the consumer discretionary sector. Tech couldn’t follow suit, however, that was largely due to stock-specific issues driving the underperformance of the sector. The weakest was healthcare. The focus now turns to US CPI tonight with the market looking at a fall of -0.1% MoM.
The ASX200 has enjoyed a strong start to the week with yesterday’s +1% taking the index back to almost unchanged for September following the major jitters early last week – in today’s market a week is clearly a long time! Buying was broad-based on Monday with well over 70% of stocks advancing led as was expected by the Resources Sector e.g. Sandfire Resources (SFR) +3.6% BHP Group (BHP) +3.5% and Fortescue Metals (FMG) +3.3%. There was some very interesting news out of Ukraine over the last 24 hours which the market seemed to largely ignore probably because it can be interpreted in a number of different ways:
Equities started this week where it left off, with buyers in full control for the Monday session. Supported by strength in commodity markets and a strong US session on Friday night, the ASX managed a 1% rally today. Materials were the standout sector with rumours of Chinese stimulus helping support commodity markets, while four other sectors were also up more than 1%. Healthcare was the only sector in the red to start the week.
Equities managed to rally in the face of adversity last week after a tough 3-weeks, there was no major bullish news around but even as US short-dated yields continued to test 15-year highs the growth stocks enjoyed a sharp recovery post aggressive falls on Monday and Tuesday to end higher for the week:
