Archives: Reports
A bullish morning of trade with local reporting season underpinning strength, it certainly seems corporates are doing well overall, plus we’re seeing many with the confidence to issue guidance which was a concern ahead of results. However, reports that Ukraine was shaping up to Russia skuttled that positive undertone and stocks fell into the close – the ASX 200 down around ~70 points from the intraday high.
The ASX200 enjoyed a strong session on Wednesday although it was struggling into lunch as the “sell the strength” mentality that’s dominated most of 2022 took hold as S&P500 futures wobbled however solid broad based buying from 11am pushed the market higher and the index finally closed up more than 1% with 85% of stocks closing positive for the day. A few weeks ago we targeted some consolidation in the 7200 – 7400 region, in hindsight we underestimated how much it needed a rest and its been an even tighter range but still an encouraging…
A great session for the ASX keying off strong leads from overseas as Russia took a tentative step backwards while strength on the domestic earnings front also buoyed the market, the Healthcare index +6.22% higher the standout thanks to our 3rd largest listed company (CSL) beating expectations and rallying more than 8%.
Tuesday saw the ASX200 drift lower through the afternoon to finally close down 0.5%, again we saw more stocks in the losers corner but it was another sharp decline by iron ore, and its related miners, which overshadowed a recovery by the tech names. BHP Group (BHP) was the best of the bunch only slipping 0.3% after delivering a solid scorecard yesterday as it showcased the fruits of rising commodity prices for miners – if inflation & interest rates have bottomed we could indeed be in the early stages of a “Super cycle” for the Resources Sector.
As Chris on the Insto Desk just over my shoulder said today, it felt like the market was down a hundred with some big moves on the stock level playing out and some decent divergence between sectors. By the close, the market held above 7200, not a bad effort considering that Iron Ore prices melted ~10% in Asia.
The ASX200 put in another solid performance yesterday to start off the week by ignoring Fridays 500-point plunge by the Dow to close up an impressive 0.4%, as we’ve said previously the more time the index can consolidate above 7200 the higher our conviction becomes that it can test 7600 in the coming months. However yesterday’s buying wasn’t broad based with only 42% of the index closing in positive territory but when the banks are extremely strong it usually translates to gains in the index e.g. Westpac (WBC) rallied +4.8%. We feel like the ASX wants to rally but overseas jitters around…
There was some nervousness this morning following a big weekend of negative news around the potential Ukraine invasion, no doubt amplified by many of us forgetting Valentine’s Day, however after a weaker open, stocks were well bid led by Gold & Energy shares while the banks were also well supported. Overall, a solid, somewhat surprising session on a day where the LA Rams won the Super Bowl.
By the end of last week we saw the Ukraine takeover from inflation as the main driver of market sentiment & focus. Local equities managed to finish the week with reasonable gains but US indices succumbed to increasing tensions between Vladimir Putin and most of the developed world with Fridays losses dragging indices into negative territory for the week. The huge swing in investors / traders focus was most noticeable in bond yields:
The ASX200 fell 1% on Friday as concerns around inflation and rising bond yields again came to the fore as the US CPI (inflation) hit a 40-year high providing ammunition for some hawkish economists to forecast a full 1% interest rate increase by the Fed over the next 3-months. As we’ve said repeatedly over the last 18-months interest rates are going higher, the only question is how fast and the markets have now positioned themselves for an aggressive & fast series of hikes. However not everything was bad news for stocks and there are some fascinating scenarios unfolding on the stock / sector level:
The market gave up ground, though still managed to post a +97pt/1.36% gain for the week. A soft lead from the US driven by higher than expected inflation prints caused early weakness. Selling picked up throughout the morning thanks to a more aggressive tone from RBA Governor Lowe who said a rate rise this year was plausible, sending the market back below 7200 before some support kicked in. The ASX eventually closed 26pts off the intraday lows.
