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We are tweaking the Flagship Growth Portfolio.
The last 2 sessions in the US have seen major volatility with an almost 1000-point drop by the Dow on Friday followed up overnight by an almost 500-point morning dip before stocks reversed higher led by the embattled tech names. With the exception of growth, and especially tech stocks, equities have been holding up extremely well in the face of adversity over the last 6-months but COVID potentially bringing China’s economic growth to a grinding halt is both challenging the macro backdrop and causing weakness across many sectors of the market:
The ASX200 fought hard to rally last week but Fridays -1.6% drop resulted in a small weekly decline for the index although most sectors rallied it was a more than -5% drop by both the Tech and Materials Sectors that led to the small pullback, basically the local index experienced a 4th week of consolidation following the strong gains through March. A couple of major stocks caught our attention and they might be setting the tone for May:
A tough session to end a softer week for the market with 80% of the ASX 200 finishing lower. We penned a note on Thursday titled: What are MM’s favorite defensive stocks? Click here and looking at the weekly performances of ASX sectors it was a timely missive with Healthcare, Industrials, Utilities and Staples the relative performers for the period while Materials & IT lost over 5% a pop. On the market today it was the Material stocks that felt the brunt with BHP down -4.36% taking 33points off the index alone, a huge influence.
The local market continues to knock on the door of new all-time highs which I’m sure amazes many subscribers and even for bulls like MM its impressive when we consider the huge macro headwinds that have been thrown at equities through the early months of 2022:
A solid session for the ASX finishing higher for a 5th straight session and again knocking on the door of new all-time highs. Most love was directed to the Industrial & property sectors while IT stocks led the losses heavily influenced by weakness in BNPL & a 20% decline in Megaport (MP1).
The ASX200 got within 8 points of all-time highs yesterday morning however by 4.10pm the market was 63pts off the milestone that MM has been calling for months. Not even a spectacular $20bn private equity bid for hospital operator Ramsay Healthcare (RHC) was enough to offset the profit-taking that crept into the dominant banks and resources throughout the session. Overall, a weak day with the market feeling a touch tired having already rallied +6.39% in March & is now up ~1% in April.
The local market had a strong rally early in the session, coming to within 8 points of the all-time high before 11AM. Strength in the financials sector early helped carry the index, however, selling in the heavyweight sector weighed on the index as the session went on. Commodity facing sectors took a backwards step on the back of a global growth outlook downgrade. Healthcare was the standout, though stock-specific factors carried the sector. Overall the index gave back 55pts intraday to close just marginally higher.
Today I turn 40, I’m not normally big into birthdays however they say this one is meaningful, a time for reflection, to focus on what comes next. For me, hopefully, more of the same with a few more camping holidays, a bit more time with the kids, and I also feel like I need some adventures, things that offer a challenge both physically and mentally and that’s going to be a priority over the coming years. For Market Matters and our wider investment management business, there are some really exciting developments about to happen. Our vision for Market Matters has always been to create a great digital advice platform…
A solid session for local stocks today, albeit a very quiet one with the market rallying early before treading water late in the day. Minutes from the RBA’s April meeting showed a growing inclination to raise rates sooner than originally thought which underpinned higher bond yields – Healthcare & IT stocks came under pressure as a consequence while Energy & Materials remained firm.
