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MM is selling TWE, buying OZL & adding to IGO
Equities are struggling as free money is withdrawn from the financial system and many stocks appear to be going on sale, recession led market corrections have only occurred roughly every 6-years since WW2 and while a little more downside wouldn’t surprise MM considering how much economic stimulus supported stocks through the GFC and COVID these should be exciting times for the informed investors not a time to panic – remember US stocks have already endured over 75% of their average recession led correction.
Last week saw the ASX200 stabilise and following a strong session on Friday even manage to close up +1.6% over the 5-days, an impressive effort considering the Resources Sector tumbled over -4.5% e.g. over the week we saw OZ Minerals (OZL) -5%, BHP Group (BHP) -5.9% and Santos (STO) -7.3%. MM have been talking about the potential for tech and growth stocks to bounce strongly for a while and Friday finally saw such an aggressive “risk on” move unfold as bond yields edge lower on recession fears although at MM we feel the tail end of tax loss selling probably helped release the cork from this particular bottle. Wherever we looked underperforming high beta stocks rallied strongly:
It was certainly a ‘risk on’ session today with the Small Ordinaries (+3.20%) creaming the large caps (+0.77%) while drilling down into the relative sector performances also highlighted that skew, Technology the standout while other interest rate-sensitive sectors like real-estate did well. A good way to end a reasonable week for the market, while at Market Matters we also went live with a new version of our website, which brings in market data, advanced charting, company financials and broker forecasts, into what we think is a very user-friendly platform.
The ASX200 edged higher on Thursday as the broad market managed to successfully offset pockets of aggressive selling in the Resources Sector courtesy of some very tough commentary from Fed Chair Powell around the potential for a recession in the year ahead. The commodities markets have certainly been paying attention with both crude oil and copper plumbing multi-week lows over recent days:
A fairly muted session today on the ASX with the defensive sectors doing well while those exposed to economic weakness struggled. Energy is at the pointy end of that, a crowded trade that is unwinding however if we see another ~10% downside we’ll likely step back into the sector.
The ASX200 slipped back into its recent bad habits yesterday with investors prepared to chase a few bargains into weakness but unfortunately, there remains a clear absence of buyers into any meaningful degree of strength – it appears we need some improvement on the macro level before some real confidence returns to stocks but this can often occur when least expected. However, through Wednesday’s session, it was a sharp decline by the S&P500 futures that changed the initial positive sentiment for the local market as recession fears intensified dragging down influential commodities like crude oil and copper, both were down well over…
An average day for the ASX with the market giving up an early advance after a solid session in the US overnight, US Futures turning lower during our time zone and weakness throughout Asia didn’t help.
The ASX200 opened strongly on Tuesday as anticipated but it was pleasant change compared to the rest of June that we managed to hold onto these gains although a surging S&P500 Futures market certainly helped the sentiment. The main Australian bourse ended the day up +1.4% with over 70% of the main board closing in positive territory. The Financials & Resources Sectors combined to lead the gains with many energy stocks reversing much of Mondays weakness, although a number of the miners struggled to maintain their gains through the afternoon implying they could experience further downside into July e.g. yesterday saw iron ore experience…
The ASX bounced today with some optimism returning to the screens, particularly the index influences with both banks & the resource /energy stocks finding some form while the defensive areas saw profit-taking.
