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The ASX was higher today as company earnings took over the baton from central banks as the key driver of stocks, and overall, they were positive. The influential sectors of Financials + Materials led the line, a positive combination here rarely leads to a down day at the index level, while Energy stocks bounced back from recent weakness.
MM is switching from CBA into ANZ
Tuesday was all about the RBA and the unexpected hawkish comments delivered by the RBA Governor. Stocks reversed lower in a matter of minutes after the 230pm decision as investors contemplated rates breaking above 4% before Christmas, the ASX200 finished the day down -0.5% on broad-based selling which saw less than 30% of stocks post gains.
The market opened lower in line with overseas indices, however, buyers stepped up mid-morning and things turned positive, for a while at least. That was until Philip Lowe came to the parapet at 2.30pm and raised rates by 0.25%, taking the cash rate to 3.35%.
The ASX200 ended Monday down -0.25% following Friday’s weak session on Wall Street coupled with follow-through selling in the pre-market S&P500 futures. The weakness was broad-based with less than 30% of the main index closing in positive territory with the winner’s circle being dominated by the energy and gold names – more on the precious metal later following Newmont’s (NEM US) bid for Newcrest (NCM).
Some fireworks to kick off the trading week with a bid for Newcrest (NCM) by larger global competitor Newmont (NEM US) while 1H23 reporting season is getting underway.
The AFR proudly announced in “Street Talk” yesterday afternoon that $20bn Newcrest Mining (NCM) might be about to receive a bid with the likely suitors being touted as either Barrick Gold Corp (GOLD US) or Newmont Corp (NEM US), either way, all we can say is bring it on! – we hold 5% of our Flagship Growth Portfolio in NCM.
The ASX200 rallied another +65-points, or +0.9%, last week with most of the gains coming on Friday courtesy of the major banks, as most people know Commonwealth Bank (CBA) is now trading at an all-time high. However, while the index is clearly strong the story beneath the hood remains extremely mixed:
Winners: healthcare, tech, building and property e.g. CSL Ltd (CSL) +11.4%, SEEK (SEK) +9.8%, Xero (XRO) +8.9%, James Hardie (JHX) +9.5% and Goodman Group (GMG) +5.2%.
Losers: energy, insurance, resources e.g. Woodside Energy (WDS) -2.2%, IAG Insurance (IAG) -6.9%, IGO Ltd (IGO) -7.4% and BHP Group (BHP) -3.3%.
A bullish day to end another positive week for equities taking the ASX 200 to within less than 1% of its all-time high. Strength across the tech stocks in the US overnight permeated into the local market again today, however what really caught or eye was CSL finally breaking out on a flow of broker upgrades while the Real-Estate sector is now heating up.
We are trimming MQG & selling SEK.
