Archives: Reports
Omicron has been the subject on many people’s minds over the last few days, surely not another ruined Christmas etc. The social impact of lockdowns over the last few years has been simply awful and one comment I’ve heard numerous times over this weekend has been “I’m not sure I can cope with another lockdown” . Europe was already struggling under yet another winter wave of COVID and now we have a new variant thrown into the mix which has already described as “cause for concern”, although at this stage it does appear markets…
Stocks opened slightly higher on Friday and with the US settling into its Thanksgiving long weekend everything was pointing to a low volume quiet day, how things changed over the ensuing hours – we’ve repeatedly said the market will breakout when least expected and that’s one call we certainly got right – just not the direction we were after:
After weeks of being more or less pinned to 7400, the index finally cracked today. Initially it looked to be a pretty subdued end to the week for the ASX given Futures were little changed and the US market closed overnight for the Thanksgiving Holiday, however traders got the jitters and the index was smacked to a new 5 week low. Fears around a new COVID strain appears to be the main thing concerning investors with travel stocks firmly in the firing line.
The ASX200 ground out a small 0.1% gain on Thursday leaving us marginally higher for both the week and month, it’s becoming boring on the index level but my “Gut Feeling” is movement is looming on the horizon. The Banks continue to weigh on the index but a strong 2.4% bounce by the IT Sector managed to keep us in positive territory – its been a long while since both of the value & growth names rose or fell together as sector rotation continues to dominate proceedings. December arrives in less than week and the bullish statistics keep on rolling e.g. over the last 40-years…
Another quiet day on the index level, any strength was sold, weakness bought and overall the market finished flat, however there was a lot more happening under the hood. At a sector level, IT stocks bounced back strongly from recent weakness, materials also rallied and that supported MM’s current positioning, while the Financials & Staples sectors were both weak.
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On Wednesday the ASX200 continued to rotate around the 7400 area, it’s acted like a strong magnet since the last half of October, so far this month the markets remained in a tight 168-point band – with only 4 trading days remaining the local markets delivered a monthly range well under half of the calendar years average, even after soaring bond yields and inflation have shaken the confidence of many investors. If I had known at the start of the month where bond yields were today I would have called the index 5% lower, either I’m too reactive or the stock market remains…
It was one of those days today where the market had little direction – chopped around par with further weakness in technology stocks offset by buying in the Energy sector, hard to get excited one way or another and best we let the market determine where it tracks from here. As we suggested this AM, MM is technically bullish on a close above 7480 and bearish below 7300, ultimately the market will tell us where it wants to head next, however bullish the seasonal factors may be.
The ASX200 sprang back to life yesterday with the Banks and heavyweight iron ore names combining to send the index up 0.8%, finally closing right back in the middle of the last 5-weeks trading range. Complacency can be the enemy of a successful investor and it’s our opinion that after consolidating for a very similar 3-month period to this time last year the likelihood of a breakout has increased dramatically i.e. don’t assume that the current market slumber will continue:
A strong bounce back from early morning weakness today as the late sell-off in Tech shares overnight cast a shadow over the market early, however with commodities strong and strength during the Asian time zone today, the local material sector provided a strong backbone for the ASX to overcome technology weakness and finish nearly 0.8% higher – back up through 7400 in the process.
