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A solid underbelly from the market today to close marginally higher despite US stocks falling more than 1.5% overnight plus our influential banking sector ended the session lower. Energy again the standout with Oil up ~10% in Asia, which is huge while the broader Materials sector was also bullish. The composition of our index, being tilted towards resources helped the local market outperform the US by ~5% in February and continues to have a positive impact, this was a key call for MM this year.
We are reducing our exposure to Oil & Gold across various portfolio’s.
Tuesday saw the ASX200 gain 0.7% but It was significantly higher at lunchtime before US futures started drifting lower reminding local investors that Eastern Europe is in the midst of a very scary war. Gains were still broad based with almost 70% of stocks closing up on the day but a reversal by the big miners reined in the markets gain even as the IT Sector surged well over 5% – with the current Ukraine crisis stock / sector rotation moves are struggling to be sustainable for more than a few days.
A solid morning session for the ASX with the market peaking +110points higher at midday before the afternoon was filled with sell orders, a +47pt gain a disappointment overall. The IT stocks were strong rallying +5.66% as a group to be the clear standout – when this sector rallies, it will rally hard, however it has experienced a few false starts of late. We’re bullish tech in the short term and can see a short, sharp aggressive bounce unfolding from here.
The ASX200 promised so much on Monday but ultimately delivered just a little as Ukraine tensions came back to the fore as Belarus entered the affray and the West continue to gear up sanctions against Russia – before the ASX even opened US stock futures were down over 2%, gold spiked almost $US40/oz higher and brent crude soared 7%, back above $US105/barrel. MM is looking for a few weeks choppy action across financial markets, which is hardly a grandiose call but if yesterday is anything to go by we feel smack on the money.
The ASX closed higher today however by a lesser margin than the futures had implied on Saturday morning (+165pts) following a strong rally on Wall Street, the weekend news flow took some the sheen off Friday’s impressive gains. Still, the ASX finished +0.70% despite US Futures trading -2.7% lower at their worst today while Asian markets also fell into the red. Materials & Energy stocks were well supported while the risk off IT sector led the other side of the ledger.
The year is less than 2-months old but it feels like stocks have walked a path far longer, broad based US stocks have already corrected ~15% while the previously high flying tech sector has endured a painful 22% pullback primarily around fears that rising inflation / bond yields will see a major rerating of the growth sector – interestingly the last time equities experienced similar “bond jitters” was in late 2018 when the NASDAQ fell 23% just 3-months before soaring to fresh all-time highs.
The ASX200 was looking good on Wednesday before the news wires screamed out that Russia had started to invade the Ukraine, we all hoped and prayed it would never happen but Putin obviously has an agenda well beyond the understanding of normal folk. All we know for sure the big loser will be the average person on the street, innocent people are starting to die under the influence of plain stupid power & ego – we’ve seen it before and unfortunately we’ll probably see it again.
Well….no one wanted to go home long this afternoon with the market seeing the best of things very early on this morning following the big turnaround in the US market overnight. The ASX 200 hitting a morning high of 7045 / +55 points although a bunch of stocks traded ex-dividend so that also weighed on the cash market, SPI Futures ended around ~100points below the morning high which is a better reflection of the afternoon weakness. Technology stocks down ~6% yesterday, bounced over 8% today…
The ASX200 was smashed 3% yesterday with sheer panic rolling through equities as Russia invaded the Ukraine, its been 67-years since World War 2 and many commentators have already started drawing comparisons as Vladimir Putin shows total disregard for the majority of people in the Eastern European nation, Joe Biden and NATO all in one resounding move. The rhetoric from Putin has also been very aggressive with the following statement catching many people’s attention – if anyone tries to stop us there will be “consequences as you have never before experienced”. The sea of red across our screens come 4pm…
