Archives: Reports
A mixed bag today with defensives holding up while anything growth-related fell away – low volume again for the ASX keying off a similar theme in the US (slowest session of the year overnight) ahead of inflation data tonight + earnings season kicking into gear.
The ASX200 fell over 1% yesterday as increasing Covid cases across the globe started to weigh on an already fragile market – it already feels like ages ago that everybody was trying to buy into the re-opening trade! Over 80% of stocks on the main board fell on Monday but although there was broad based weakness it was on relatively low volume suggesting buyers simply took a step backwards as opposed to the sellers returning in force. Rising economic fears weighed on the miners as would be expected with a number of prominent names very close to making fresh 2022 lows e.g. OZ Minerals (OZL), BHP Group (BHP) and South32 (S32).
A very quiet but overall negative session to kick off the new trading week with the positive read-through from SPI Futures on Saturday morning giving way to a slow and steady, meander lower for stocks, weighed by weakness across Asia as Covid numbers tick higher.
The title for Monday’s report over the last fortnight has been “Here comes the bounce – 1 & 2” and the ASX200 has delivered on the index level albeit in a slow and choppy manner with major stock/sector rotation unfolded beneath the hood – investors are swinging their attention between focusing their fears on either rising inflation/bond yields or an imminent recession. On Friday night strong US employment data saw an expected rally in bond yields which initially sent US stocks lower but it was encouraging for the short-term bulls like MM that they ground back to close unchanged setting the stage for a firm open by local stocks this morning.
The ASX200 experienced a choppy week which threatened to unravel on Wednesday only to come good on the home stretch with the local index finally closing up over +2% on broad based buying which saw over 80% of the main board close higher come Friday afternoon. However the real action was in the Resources Sector which ultimately closed mixed, overall this feels like a good result considering the carnage which was witnessed on Wednesday:
While the market closed in the green today, the ASX closed well off its highs today as selling picked up into the close. Resources were strong again today on the back of Chinese stimulus plans with the Asian superpower talking up s $300b+ package to help support manufacturing and construction. The unloved tech sector also got a boost into the weekend despite bond yields tracking higher. Telcos were the worst off as investors preferred the risk-on trade, however, it was the financials that held the index back the index the most
The ASX200 rallied +0.8% yesterday on reasonably broad based buying that saw over 60% of the main index rally while importantly there was an absence of any meaningful aggressive selling across any of the 11 sectors. Its early days but stocks are positive for the month following the carnage experienced by equities through June, the market feels well supported at the moment which coincides with the seasonal strength that usually unfolds through July before things historically go quiet into early October. The stock / sector rotation under the hood of the market looks destined to continue for…
Commodities bounced back today, finding some support after a few weaker sessions, helping the local market rally today. It was a choppy start giving up its initial 30pt rally by 11.30AM, but buyers returned in the afternoon and the index pushed higher into the close. Three of the Big 4 banks were also all in the green adding to the market’s strength today. A number of tech names were hit hard today but the overall sector only gave up a small portion of yesterday’s rally while the industrials fared the worst today.
Bizarrely it felt like a positive day for the ASX200 on Wednesday even though the index ended the choppy day down -0.5%, most stocks managed to rally but the weakness for the index came from one very specific and influential sector of the market i.e. the heavyweight resources which were hammered following steep declines across commodities markets on Tuesday night as fears of a global recession continued to escalate. MM has been looking for a snap back in the dislocation between bond yields and tech stocks for a few weeks and it finally kicked into play with a vengeance yesterday supporting the index in the process:
While the market was only ~0.5% lower today, there were some large shifts from a sector perspective with higher value growth finally popping on the upside buoyed by a fall in bond yields, while recession fears knocked energy and commodities for six. Property & technology stocks were a standout, the pin-up of the tech sector being Xero (XRO) which rallied 6.65% while Healthcare was also strong, CSL finally breaking out of its stubborn trading range and rallying 2.58%. Lots of doom and gloom today…
