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A tough day at the office for the Australian market today with the ASX down over 1% led lower by the IT and healthcare sectors. Financials were also weak however there were some offsets, with Energy strong and Utilities living up to their defensive qualities, while at the corporate level we actually saw some positive updates from stocks, and they rallied! As we’ve written a few times of late, stock picking in 2022 will be very important.
Tuesday saw the Australian market slip just -0.1% after steadily surrendering the mornings gains through the afternoon, this morning we see another example of the ASX’s uncanny knack of picking major moves on overseas bourses. Yesterday saw only the Healthcare Sector move by over 1% and it was on the downside with losses pretty evenly spread throughout most stocks. At 4pm yesterday afternoon it felt like the regularly mentioned 7400 magnet was restraining local stocks but a few hours later as the US tech futures plunged 2% and bond yields surged to fresh 2-year highs the reason lurking beneath the surface became far more apparent.
The Match Out: ASX gives up early gains, Healthcare struggles, JB Hi-Fi (JBH) see strong 2nd Quarter
The local market started on the front foot today, trading as much as +28pts/+0.38% to 7445 around midday before selling off into the afternoon. The slide seemed to coincide with the Bank of Japan (BOJ) talking to inflation risks, increasing their CPI expectations for the next 12 months to 1.1%. Healthcare was weak today, and while the Tech sector finished marginally better, it was the standout earlier in the session and felt the brunt of the afternoon’s weakness.
The ASX200 continues to dance around the 7400 area, it’s now been well over 6-months of passing the performance baton between different stocks & sectors with the only constant being whenever the market looked ready to enter a trend it would reverse. Monday saw relatively broad based gains but an average day for a number of the major miners saw the markets final gain limited to 0.3% on a day which saw China appearing forced to cut rates as Omicron threatens their economic growth. The move by the PBOC…
A positive session for local stocks to kick off the week with a muted start before the market pushed higher into the afternoon session – a bounce back in the retailers after a period of weakness led the market today while Energy was again supportive.
Firstly and very importantly a happy and healthy new year to everyone, COVID may continue to test us all but lets hope our optimism is well founded and it will soon to be in the rear view mirror, definitely some lessons to be learnt here! Aside from the pandemic MM is extremely excited about the coming year on a number of fronts from the ongoing opportunities the markets look set to present to the continued growth and evolution of MM:
The ASX200 remains locked in on the 7400 area but its noticeable how much easier over recent weeks it can endure strong down days although lower volumes play a role as some lucky people enjoy extended holidays, this will probably return to normal next week and beyond. Overall the index finished the week down 60-points with strength in energy, resources and insurance stocks being unable to hold the market in positive territory amidst broad based selling.
Bond yields have dominated 2022 so far as they grind higher exerting pressure on growth names like tech while value stocks, which generally benefit from economic expansion, have commenced the year on the front foot, something the English cricket time feels unable to do. We believe there’s more fuel in this tank but the risk / reward is diminishing fast.
The ASX knocked for 6 today as the 5th Ashes Test gets underway in Hobart, the poms starting well with the ball taking 3 early wickets. On the market, utilities the only sector in the green while the IT stocks ended a tough week down another 3.92%, the tide has certainly turned.
The ASX200 enjoyed a solid Thursday courtesy of ongoing strength in banks and resources with heavyweights BHP Group (BHP) & RIO Tinto (RIO) both gaining around 4%. Losers marginally trumped the winners but when the indexes 2 largest sectors, which make up around 40% of the market rally the index tends to follow suit. Blackstone’s increased bid for Crown Resorts (CWN) also helped market sentiment as it demonstrated that M&A remains alive and well for undervalued assets arguably creating a bid into any decent sell-offs in risk assets.
A positive day for the ASX with another session where material stocks supported the market with the sector enjoying strong showings from Iron Ore, Lithium & Copper, while Blackstone have finally bid up for Crown (CWN) with a deal looking likely at $13.10.
