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The market was hit on open to trade down ~80pts however it ground back from 11am onwards to re-coup half of those declines, most support coming from the influential banking sector which had a strong day.
The S&P/ASX 200 fell -37points / -0.37% to close at 7527.
Financials (+3.10%) & Consumer Staples (+2.22%) lead the line today, while IT (-2.88%) & Materials (-1.52) struggled.
Tech stocks keyed off underperformance in the US overnight, the almost daily rotation continues however they are gaining more support overall as the pace of appreciation in bond yields slows.
Yesterday saw the ASX200 surrender most of the days early gains following the RBA’s interest rate decision and accompanying rhetoric but it still managed to eke out a +0.2% gain as the local index inches ever closer to an all-time high, now only 1.3% away. The Tech Sector followed their US peers higher on Tuesday ending the day up +3.15% with every stock in the main board’s sector closing up on the day – MM is still looking for the growth names to outperform over the coming weeks/months but rotation keeps threatening and failing to follow through.
The market was storming higher this morning to hit a 7573 peak before the RBA implied they had lost patience and would move sooner on rate hikes, another credibility losing exercise from the central bank following their poorly executed attempt at yield curve control. The AUD spiked up through 76c, the first time it’s been there since June 21 and the market sold off, down ~40 odd points from its early peak to close only marginally higher.
We’ve started off the first full week of April with a small +0.3% advance courtesy of broad-based gains offsetting a tired looking Banking Sector although the miners and utilities stocks continued to shine as they have through most of 2022 – if the market remains in sync with our roadmap for the year we see no reason to anticipate a significant change in relative sector performance until we do find an inflection point. This ties in with our recent stance towards the local miners:
A fairly flat session to start the week with little direction at the index level although there were some decent moves under the hood. The fund managers were in focus following a takeover approach while the Utilities, Materials & IT stocks all finished up around 1%.
The ASX200 has commenced a historically strong few weeks less than 2% below its all-time high with a feeling of inevitability in the air – MM has been targeting the 7700-7800 area for months and at this stage, we feel on point. However, there is usually a sting in this tail for equities because both locally and overseas May / June are usually the worst seasonal combined months for stocks e.g. the Average return for the ASX200 over the last 20-year during these 2-months is -1.0% and we should remember that during most of this time stocks have been enjoying a strong bull market hence the regularly quoted phrase “sell in May & go away”.
The ASX200 kicked off April with a very small decline basically ignoring a 550-point drop by the Dow in the process, after another bullish week all-time highs are now less than 2% away! Over the last 10-years the average gain for April, usually the 2nd strongest month of the year, is +2.7% which would take us to a new milestone high – MM’s call since the start of 2022 with the “fun” just about to start in earnest. With one trading day of Q2 behind us let’s re-consider what may be coming over the next 3-months:
It was a directionless finish to the week with the market chopping in and out of positive territory throughout the day, but trading in a tight 40pts range. Resources stocks carried the index, stemming what would otherwise have been a soft finish to the week, or start to the new quarter. Growth was on the nose as tech, healthcare and consumer facing stocks softened.
We are buying PDN using a 73c limit price
Yesterday we waved goodbye to a volatile Q1 which saw the ASX200 initially drop -9.2% in January before slowly but surely recovering all of the losses before managing to end the quarter slightly higher. The highlight of the last 3-months would probably go to the explosive rise in bond yields but there were a few rivals for the mantle including surging commodity prices courtesy of Russia’s invasion of Ukraine and supply chain issues which stubbornly aren’t going away, the net result was a market of 2 halves, excuse the cliché, with value stocks like banks and resources rallying at the expense of growth names such as tech and healthcare.
