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The ASX200 demonstrated its resilience yesterday after managing to eke out a small gain even after the Dow fell over 400-points, we believe the local market will continue to outperform the US over the coming weeks / months. The market peaked at 7399 into the close helped a recovery by the US futures during our day session but by midday the ASX had already confirmed the notable absence of any selling into weakness. The markets now rallied +6.2% from its March low to test 10-week highs, we remain bullish with fresh all-time highs feeling increasingly likely as different sectors of the market take it in turns to drag the index higher.
There was every opportunity for the market to pullback today, the ASX 200 is up ~6% on the most recent drive from the ~7000 handle, US markets were down around 1.3% overnight, Asian markets were mostly lower and while US Futures were up, it wasn’t by a big margin, but still the ASX recovered from the early lows, supported mainly by Energy & Materials to actually finish up on the day – a good effort.
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The ASX200 enjoyed a strong “Hump Day” to close up exactly 0.5% higher registering its highest close since mid-January – it’s now only 3.5% until local stocks challenge their fresh all-time highs. Again we saw the banks perform the heavy lifting with CBA rallying to within 2.6% of its December high, even after trading ex-dividend $2.00 fully franked in February, investors will receive this tasty morsel in the 1st week of May. The IT stocks were the standout over the session rallying 3.5% while the major miners slipped slightly lower, MM believes tech stocks will maintain this outperformance over at least the coming weeks – remember it’s only a bounce for growth stocks after an awful 6-months.
The ASX marched higher today supported by another strong rally in the technology stocks while talk of further buy-backs amongst the banks saw the sector well bid. Overall, the market is net bearish given the confluence of negative headlines and a bunch of traders we talk with are scratching their heads trying to reconcile the moves, however the simple explanation is when the marginal seller has already sold and are positioning for the pullback, stocks often move in the other direction – it’s all about positioning for now.
The ASX200 rallied another +0.86% on Tuesday helping it scale fresh 9-week highs, it might surprise many readers to know it’s now less than 4% below its 2021 all-time high – the markets literally had the kitchen sink thrown at it for the last 7-months but only the staunchest bears could argue it hasn’t performed admirably. We only saw 54% of stocks rally yesterday but when the banks remain firm and resources soar the ASX is going higher e.g. BHP Group (BHP) rallied +5.1%, perhaps some of the $10bn landing in shareholders accounts next Monday has already started filtering itself back into the miner.
While the ASX ended higher, it was the second straight session where stocks finished well off the early highs, yesterday it was ~70pts, today was half that however it all came in the last hour of trade. The Material stocks bounced back fairly hard today, BHP +5.1% had a big influence on the broader market adding +35 points to the ASX 200 alone, while the IT names slipped lower.
The ASX200 surrendered early solid gains yesterday as it took direction from the US futures slow meander lower, we finally ended the day down just 0.2%. Overall when compared to the last few weeks it felt like a pretty quiet session with a +2.5% gain by the Tech Sector the main standout on the day while the banks experienced a rare day in the red, less than 3% of the main index moving by over 5% told the tale of the day. Basically after surging +5.5% over just 9 sessions the market needed a well-earned rest and it took one!
A disappointing session today with early strength fading throughout the day. The index was at one stage up 56pts/+0.77% to 7350, the highest level in a month before falling a total of 72pts and closing on the low of the day. Tech was a surprise star in the with most holding up well throughout the session managing to build on the momentum from last week. The resource sectors were also in the black on a softer day thanks to support in commodity markets.
Last week saw risk assets enjoy their best 5-days since 2020 as ongoing bad news from a number of corners was dismissed as largely irrelevant by equities, especially post the Feds rate hike. The ASX200 closed up an impressive 3.3% and we believe there’s a very good chance that a test of all-time highs is in the offing – it’s now less than 5% away. The only real laggards last week were the resources and if they can just take a rest on the downside the tech / growth sector feels poised to drag the market higher, as we keep saying the path of most pain is up:
