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The ASX200 has now advanced +6.5% this month and we’ve still got two trading days remaining for January with Monday set to open back above 7500. The local Tech Sector led the gains last week rallying +2.8% supported by Real Estate +2.5% which was impressive considering that the local inflation data came in far worse than expected suggesting further rate hikes lay ahead but as we’ve alluded to previously news thats “not too bad” is now being embraced by the battered growth stocks. Under the hood the winners and losers circle was made up of 2 very different groups of companies:
After a day off yesterday, the ASX had another day out today, cracking new 9-month highs early on. Despite giving back some of the strength, the market was well supported, if not running into a bit of selling pressure around the 7500 level. Tech and Consumer Discretionary were the standouts, a strange combination of growth and defensive sectors to top the leaderboard.. Energy was the main laggard as coal names were sold off. Overall, the index was up +41pts/+0.56% for the week in its 4th consecutive weekly gain.
The ASX200 slipped 22-points into Australia Day following the fortunes of Microsoft (MSFT US) closely through the US late trading session i.e. MSFT opened up ~5% after its quarterly reports saw a beat on the EPS front however following a muted management presentation the stock reversed to be down -1%, taking the wind out of the sails of a previously strong local Tech Sector which ultimately closed down -1.2% after a promising start. Gold stocks also experienced some noticeable selling with Newcrest (NCM) and Evolution (EVN) both reversing lower after hitting fresh 7-month highs during the morning.
The ASX traded through 7500 for the first time since April 2022 in early trade before CPI data dropped and the market traded lower for the rest of the session. CPI came in much higher than expected, up 1.9% QoQ vs expectations of 1.6%. The index dropped -47pts at the time, however, by the end of the day the impact was pretty muted and the rate-sensitive Aussie 2 year bond yields only moved 10bps higher. Tech saw the biggest swing in performance, however, Energy…
The US S&P500 Value Index is less than 5% below its all-time high while the Growth index continues to languish a painful 28% below its equivalent milestone. We may have seen the likes of Netflix (NFLX US) double in 6 months but they remain significantly below their late 2021 high. As subscribers know with interest rates soaring from their ultra-accommodative levels post Covid to arguably the new norm investors shouldn’t be surprised by the market rerating of the growth stocks.
It was a case of rinse & repeat for the ASX today with early sold-off then seeing support kicking in before midday to take the index to a new 9-month high. Despite the strength in the index, the banks failed to join the rally, certainly surprising to see such a strong move without the Financial sector contributing, likely on the back of a sector-wide downgrade coming through from Macquarie yesterday. It was the Materials sector continuing to see buying that dragged the index to within 2% of all-time highs today while Real Estate and Tech were also key pillars of strength.
The ASX200 edged higher yesterday in quiet trading compounding its gains for 2023 to 6% after just 3 weeks of trading, the index was actually higher earlier in the day but some selling, most notably across iron ore names, was enough to see the index surrender 75% of the early advance. The broad-based market is starting to feel understandably tired after surging well over 1000 points in less than 4 months although the Tech Sector is finally attracting some buying as inflation fears subside.
Bulls & Bears played tug of war today in a whipsawing session to start the week. The index quickly rallied to a new high early on before giving up ~40pts within an hour of hitting the peak. Buyers stepped up from there, helping the ASX200 to stem the losses and trade back into marginally positive territory. With most Asian markets closed for Lunar New Year celebrations, there was little in the way of news flow to control the index. Tech shares…
Australian stocks continue to defy gravity and overall investor sentiment, this morning they look set to open less than 2% below last year’s all-time high even while interest rates soar, housing prices fall and US stocks struggle i.e. the S&P500 closed higher on Friday but still a painful 21% below its last 2021 top. It’s not just the obvious miners that are dragging the ASX higher the banks remain very strong with heavyweight CBA less than 1.5% below its top before we even consider its excellent yield.
The ASX200 has now advanced +5.9% this month and we’ve still got more than a week to go! The buying has been broad-based with only 14% of the main board down so far in 2023 however it has been the strength in the strength in the influential banks, healthcare and resource stocks that’s driven the index higher. The gains in the following 6 stocks illustrate the story of the tape in January:
