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Tuesday saw the ASX200 rally strongly into lunch only to fail badly in the last hour of trade after the Moderna CEO reminded us all that there remains significant unknowns / risks with the Omicron COVID strain – if the ASX can both rally & fall around 100-points in one session I feel like we should all brace ourselves for a volatile run into Christmas. The market has remained in a fairly tight trading range for the last 6-months although it certainly doesn’t feel like it this morning.
The ASX attempted to rally on the final day of the month and was doing well early to be +92pts up at the lunchtime high, however late selling kicked in after the Moderna CEO predicted in an FT report that vaccines will struggle against the Omicron variant. US Futures rolled over, Asian equities erased earlier gains and risk off swept back across the market knocking the ASX 200 ~76pts, almost half of which happened in The Match Out (i.e. between 4 &4.10pm).
The ASX200 felt strong yesterday even though it closed down over 0.5%, the local index managed to recoup half of the days early losses with 35% of stocks finally to closing in positive territory while the IT and Resources Sectors both closed up on the day – only 2 stocks fell by over 5% which illustrated the lack of aggressive selling, unlike Friday! However it’s one thing for the market to find support into weakness but we need a definite 360 about-face in market sentiment to make another assault on new highs, now over 5% away.
There was a degree of anticipation this morning given the weekend news flow, however as currency markets opened and were fairly subdued it quickly became apparent that the market reaction towards the Omicron variant would not be as severe as futures had implied. As is customary on a day like this, the worst of it was seen early as stop losses dinged the market sharply lower on open (-100pts) before buyers quickly emerged pushing…
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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