Archives: Reports
Local shares started the week on the back foot following a soft Friday night in the US. Inflation concerns picked up again after the previous PCE figure was revised higher and bond yields rallied as a result.
The anticipated path of central banks continues to dominate the swings by stocks as they react to the continual flow of volatile economic data and accompanying rhetoric from the likes of the Fed & RBA. The correlation is very clear with the ASX rallying strongly when bond yields fell in early 2023 only to reverse when yields reversed higher earlier this month.
The ASX200 slipped another -0.5% last week with a -4.3% drop by heavyweight BHP weighing on both the index and the Materials Sector, however, the market’s pullback has started to lose momentum as company earnings fail to deliver the disasters many had feared/expected. Reporting season remains the dominant factor on the stock level but it’s interesting that things aren’t panning out as would be expected on the sector level:
Overall, the week was a soft one (-0.56%) dominated by company results, a lot of moving parts in the market at the moment however earnings have been okay, not a disaster as many suggested, while the focus at the macro at least remains around the trajectory of interest rates.
The ASX200 continues to face headwinds around the 7300 area but when we take into account what was thrown at the index yesterday the minor -0.4% pullback felt like a solid performance, the broad market actually rallied with nearly 60% of the main board finishing up on the day but when heavyweight BHP Group (BHP) tumbles -3.4% the result is almost inevitable – more on this and related names later.
A softer session for the market, but again there was a lot happening under the hood as you’d expect with reporting season still in full swing – although tapering off from here. 60% of the ASX actually rallied today although when the Materials are down ~1.5% it’s always going to be tough going at the index level.
We are buying AGL Energy (AGL) in the Income Portfolio
The ASX200 put in a brave performance yesterday closing down just -0.3% in the process shrugging off a -2% drop by the US S&P500 plus Commonwealth Bank (CBA) trading ex-dividend $2.10 fully franked. The catalyst for the market’s impressive intra-day recovery was the wage data released at 11.30 am which showed wages are rising far less than expected and importantly well below the current rate of inflation i.e. everyone’s already getting worse off without the help of the RBA!
An interesting session today with the market getting knocked ~60pts early on following a ~700pt fall by the Dow Jones in the US, however wage data that was weaker than expected saw the AUD fall, bond yields fall and equities rally strongly from the morning lows to finish only a lower, particularly when we strip out the impact of dividends with CBA trading Ex-Div for $2.10 + franking today.
A peak Cash Rate close to 4% had been MM’s target for 2023 but after reading the minutes from this month’s RBA Meeting it now feels highly likely that Philip Lowe et al will push the local economy over the proverbial cliff in an attempt to crush inflation – shame it wasn’t more forward-thinking post-COVID as it ignored clear signs that inflation was on the loose i.e. one shop at Woolies would have told the tale!
